Galaxy Digital, led by Michael Novogratz, facilitated Goldman Sachs’ over-the-counter crypto transaction.
Goldman Sachs has reportedly completed its first over-the-counter (OTC) trade in crypto derivatives, marking the first major U.S. bank to enter the growing market for cryptocurrency options.
The development emerged Monday when the bank executed its first OTC crypto trade involving a cash-settled BTC derivative.
According to a CNBC report, Goldman partnered with Galaxy Digital to successfully carry out a non-deliverable bitcoin option.
Anthony Scaramucci of SkyBridge Capital noted that Galaxy Digital also assisted him with his first OTC crypto deal.
Our first was with @GalaxyDigitalHQ too @novogratz
Goldman announces milestone with first over-the-counter crypto trade with Galaxy @CNBCtoo https://t.co/Fd8uyC1vRs
— Anthony Scaramucci (@Scaramucci) March 21, 2022
Crypto Maturing as an Asset Class
Goldman Sachs already provides its clients access to certain non-deliverable forwards and exchange-traded options. However, this OTC transaction represents a “first major step” that highlights growing institutional demand for crypto investment products. It also reflects a shift in sentiment within traditional finance toward digital assets.
Max Minton, Goldman’s head of digital assets for Asia-Pacific, said the trade signals that cryptocurrencies are maturing as an asset class. He added that the OTC transaction is an important milestone in the bank’s broader digital assets strategy, which centers on the market for crypto options.
Galaxy Digital co-president Damien Vanderwilt described Goldman’s OTC bitcoin deal as the initial sign of a large bank’s deeper involvement, noting that clients can benefit from “more direct, customizable exposures to the crypto market.”
Interest in bitcoin and other digital assets has steadily grown after an earlier period of mainstream investor apathy, including among established financial institutions. Today, a number of major banks, hedge funds, endowments, family offices, and sovereign wealth funds include cryptocurrencies as part of their portfolios.