Goldman Sachs has completed its first over-the-counter cryptocurrency deal with Galaxy Digital. Goldman’s trust in crypto as an asset class is reflected in this trade. Goldman Sachs is making progress toward full-scale crypto adoption. According to a Monday CNBC story, the American investment bank has become the first major U.S. bank to perform an over-the-counter bitcoin trade. According to Goldman officials, the bank traded a Bitcoin-linked non-deliverable option with Galaxy Digital, Mike Novogratz’s crypto-native investment banking firm.
Goldman has made it obvious that it believes in the future of cryptocurrency technology, opening a dedicated trading desk, announcing its first Bitcoin-related products, and offering in-depth insights on the possibility of an Ethereum-powered Web3 during the last year. But the over-the-counter trade is notable because it is a first for the investment firm. While Goldman has traded Bitcoin futures on the CME Group in the past, it has never given clients direct access to the market. According to Galaxy Digital, acting as a primary in over-the-counter trades carries a larger risk than trading on the CME.
While Goldman Sachs has been one of Wall Street’s most vocal proponents of digital assets in recent months, it isn’t the only firm with an interest in the field. As the market has risen, investment banks, hedge funds, and even insurance firms have hurried to join the crypto bandwagon, often with the belief that crypto is a multi-decade bet. Morgan Stanley, BNY Mellon, and State Street have all entered the field as the market has evolved, from gaining exposure to the asset class through investments to developing Bitcoin-related products and providing custody services.
Last month, JPMorgan, one of Goldman’s main competitors, built a lounge in the Ethereum-based virtual world of Decentraland. It also predicted that the Metaverse might become a $1 trillion annual market, a notion that appears to be at odds with Jamie Dimon, the bank’s CEO and resident crypto sceptic.