Goldman Sachs to Offer Bitcoin Derivatives to Large Investors

Goldman Sachs has decided to enter the crypto market by offering Bitcoin (BTC) derivatives to Wall Street investors. According to a recent report released by Bloomberg, the bank is now allowing investors to trade with non-deliverable forwards. This product is tied to Bitcoin and pays in cash to those that invest in it. 

Goldman Sachs Enters the Crypto Market

The number of traditional companies offering Bitcoin solutions has been growing over the last few years. In order for this new product to work, the bank will buy and sell Bitcoin futures in block trades through the CME Group Inc. The firm is ready to use Cumberland DRW as a trading partner. 

According to Max Minton, Goldman’s Asia-Pacific head of digital assets, there is a large institutional demand for digital assets that continues growing. 

On the matter, he said:

“Institutional demand continues to grow significantly in this space, and being able to work with partners like Cumberland will help us expand our capabilities.”

Bitcoin has been growing in 2020 and 2021 and we are now close to its all-time highs above $63,000. The digital asset has a market valuation of $1.05 trillion and it has also helped other virtual currencies move higher. 

Due to the current bull market in the crypto space, John Waldron, the chief operating officer of Goldman Sachs, explained that the pandemic has accelerated crypto adoption around the world. Furthermore, he stated that there was going to be more digital commerce using digital money. 

The new product and solution offered by Goldman Sachs allow institutional investors to approach the market. 

“We’ve seen rapid adoption and interest in crypto from more traditional financial firms this year, and Goldman’s entrance into the space is yet another sign of how it’s maturing,” mentioned Justin Chow. 

Over the last months, we have seen how different companies purchased Bitcoin or started offering solutions related to the digital asset. For example, the e-commerce giant MercadoLibre purchased $7.8 million in Bitcoin. Additionally, other companies such as MassMutual, Square or Tesla have also invested millions of dollars in the largest digital asset in the market. 

Although Bitcoin is the largest cryptocurrency, other projects such as Ethereum, Binance Coin (BNB), XRP, Cardano (ADA) or Litecoin (LTC) continue to attract the attention of investors as well. 

In the coming months, we could see new companies entering the market and gaining exposure to this fast-growing industry.