US Bank Facilitates First Over-The-Counter Bitcoin Transaction

Goldman Sachs (GS) has become the first financial institution to make an over-the-counter (OTC) crypto options trade as it expands its digital assets team. GS has partnered with Galaxy Digital, a New-York based cryptocurrency investment firm, on the bank’s Bitcoin futures trading desk, which facilitated the transaction.

The digital asset trading unit at GS made its OTC crypto transaction in the form of a bitcoin non-deliverable option (NDO). An OTC Bitcoin NDO means that GS has essentially bought a contract betting on the future price of Bitcoin, rather than buying the digital asset itself. GS also added another digital assets VP to its team.

The company describes the move as a sign of maturity of the asset class in the eyes of institutional players. According to Damien Vanderwilt, co-president and head of global markets at Galaxy Digital:

We are pleased to continue to strengthen our relationship with Goldman and expect the transaction to open the door for other banks considering OTC as a conduit for trading digital assets.

Advertisement

Damien Vanderwilt, co-president and head of global markets, Galaxy Digital

Options Trading On the Rise

The move also follows the investment banking giant becoming more involved in the crypto space after restarting its bitcoin trading desk in March last year. Options trading has become an increasingly popular way of investing in crypto. Instead of traders buying and selling digital assets, they buy and sell contracts that bet on the prices of the assets.

Goldman Sachs Gets Bullish on Bitcoin

After the exciting news of the OTC NDO was announced, we see GS becoming ever more bullish on Bitcoin. Earlier this year, it released a note to its investors saying that a US$100,000 price tag for bitcoin is possible this year if it continues to erode gold’s utility as a store of value.