Goldman Sachs completes first over-the-counter cryptocurrency transaction

Goldman Sachs has just completed an over-the-counter trade in a crypto-asset derivative. This world first was carried out in partnership with Galaxy Digital, the leading trading platform on the market. It represents a new illustration of the galloping democratisation of the crypto-asset market.

FACTS

• Galaxy Digital bills itself as the leading global provider of blockchain and crypto-currency financial services for institutions.

• This status will be further enhanced by the fact that the platform facilitated the execution of the first unregulated, OTC crypto-trading transaction with Goldman Sachs in the form of a Bitcoin non-deliverable option (NDO).

• Goldman Sachs, facilitated by Galaxy Digital, thus purchased an OTC option contract to be settled in cash but linked to the price of Bitcoin.

• Galaxy's trading platform provides liquidity in over 100 digital assets. It works with over 690 institutional trading counterparties.

CHALLENGES

• Signing a world first: Goldman Sachs is pushing further into the nascent digital asset derivatives market. The deal between Goldman Sachs and Galaxy Digital is billed as the first crypto-backed OTC transaction by a major bank. A significant step in the development of crypto markets for institutional investors.

• Consolidating an existing partnership: Goldman Sachs had already worked with Galaxy Digital on the topic of crypto-assets, as part of the execution of the bank's first Bitcoin futures trade. The two partners are now strengthening the historic investment bank's strategy in familiar territory.

• Delivering on its predictions: Goldman Sachs has always expressed optimism and confidence in the future of the cryptoasset market. The investment bank recently predicted that Bitcoin would surpass the symbolic value of $100,000 within five years. The next big step is the development of the options market.

MARKET PERSPECTIVE

• The strengthening of the partnership between Goldman Sachs and Galaxy Digital, and the involvement of institutional investors, is a positive signal for the development of the nascent crypto-asset derivatives market. It illustrates a strong trend in the democratisation of this topic, driven by the commitment of traditional players.

• In addition to the new joint project between Goldman Sachs and Galaxy Digital, other recent initiatives demonstrate this trend. Visa, for example, is working on recruiting crypto talent to strengthen its own skills and catch up with MasterCard, which is already defending its status as an expert on the subject. Stripe, for its part, intends to reintegrate crypto-currencies, while eBay is choosing to accept crypto-currency payments.