Goldman Sachs launches NDF with Bitcoin as its underlying asset
American investment bank Goldman Sachs Group started trading Bitcoin related derivatives to take advantage of the profit opportunities with $ 1 trillion Market Bitcoin, enabling institutional investors to make big bets, reports Bloomberg.
NDF settled in cash
Start trading with non-deliveryable forward (NDF) after Goldman Sachs created a trading department this year to help its clients trade Bitcoin futures. In March, Goldman suggested that he was preparing to offer his private wealthy clients additional vehicles related to the crypto markets and introduce Bitcoin-related NDF, more than was provided.
As NDFs settle in cash, Goldman Sachs, who is not allowed by regulation to hold Bitcoins directly, found a way around this by working with Cumberland DRW trading company to buy and sell Bitcoin futures in block trades at CME Group on the go. which radically expands the bank's capabilities to facilitate position taking by large investors.
“Goldman Sachs serves as a helper to show how sophisticated institutional investors are approaching market changes. This year we have seen rapid adoption and interest in cryptocurrencies from more traditional financial firms, and Goldman's entry into this space is another sign of how he is maturing. "
Justin Chow, Global Head of Business Development, Cumberland DRW
According to celebrities who prefer to remain anonymous, the partnership between Goldman Sachs and Cumberland demonstrates the investment bank's willingness to work with third parties to help meet these needs of institutional investors.
“Institutional demand in this space is growing steadily and being able to work with partners such as Cumberland helps us expand our capabilities. The new offering "paves the way for us to evolve our emerging cash-settled cryptocurrency opportunities."
Max Minton, Head of Digital Assets, Asia-Pacific, Goldman Sachs
Banks are changing their stance on Bitcoin
The cash-settled NDF offered by Goldman Sachs does not require the bank to deal with physical Bitcoin, as do similar vehicles introduced by Morgan Stanley and JPMorgan that track Bitcoin price movements and use third parties to buy and hold the underlying digital asset.
For more than a decade, Bitcoin has been considered a tender for criminals, drug dealers, and money laundering persons through the banking world, with one director of an investment bank, JP Morgan Chase co-president Jamie Dimon, threatening to fire any of their traders who deal with buying or sale of digital currency.
However, the huge spikes in Bitcoin prices have changed the banking world as, in addition to Goldman Sachs, Morgan Stanley and JPMorgan are also working on a trust product linked to Digital Asset, although rumors have it that Goldman Sachs' next step will be to offer listed hedge funds for Bitcoin or access to Greyscale Bitcoin Trust.