The bilateral OTC options are still being discussed.
Goldman Sachs has already made a bid. Bitcoin futures, options, and futures on Ether
Goldman Sachs Group Inc. is considering issuing over-the-counter bilateral crypto options, indicating the bank’s growing interest in assisting institutions with the trading of digital-currency futures.
According to people familiar with the topic who asked not to be identified because they were talking confidential information, the behemoth is one of a few Wall Street banks in the early stages of testing such products. The so-called bilateral options allow crypto holders such as hedge funds and Bitcoin miners to customize trades in order to mitigate risks or improve yields.
Crypto-native enterprises like Genesis Global Trading Inc., Galaxy Digital Holdings Ltd., and GSR have dominated the market for these options, which is still in its infancy. DRW Holdings LLC, a traditional trading behemoth, has also jumped in as a liquidity provider.
Regulatory uncertainties, internal compliance procedures, and “know your customer” standards have kept large Wall Street banks from participating in the crypto spot market. Goldman Sachs now offers Bitcoin and Ether options and futures trading. It began trading non-deliverable futures, a Bitcoin-linked derivative that pays out in cash, last year.
In a December event hosted by CoinDesk, Andrei Kazantsev, Goldman’s global head of crypto trading, said that the firm has observed demand for derivative-type hedging, and that the emergence of an options market will be the next significant step. To facilitate larger deals, Goldman offers liquidity and takes risk on behalf of clients, he said.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.