Goldman Sachs Group (NYSE: GS) is set to offer Over the Counter (OTC) crypto options after a landmark trade with Galaxy Digital Holdings (OTC: BRPHF).
The Monday transaction was the first significant cryptocurrency trade by a major U.S. bank, reflecting greater interest in the maturing market by Wall Street. Galaxy Digital provided the bank with a non-deliverable option, an OTC contract tied to the worth of a crypto asset that pays in cash once it matures. According to Galaxy Digital's release, the swap and future OTC trades through Goldman Sachs come as part of the growing partnership between itself and the titanic investment bank.
"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," Galaxy Digital Head of Global Markets Damien Vanderwilt said. "Goldman's continuing trust in us is a testament to Galaxy's expertise and ability to meet the evolving demands by institutions as crypto solidifies itself as the fifth asset class."
Wall Street's growing acceptance of the burgeoning cryptocurrency market has investors looking for less-risky options to test the waters of digital asset trading. Goldman Sach's move to offer OTC trades places quite a bit of risk on the bank but opens the door for reluctant traders to become involved through established banks. Moreover, the trade could prompt other banks to begin offering similar crypto-asset options.
The opening of a broader crypto-option market comes as cryptocurrency finds increasing worldwide integration in the public and private sectors.
Amid Russia's stalled invasion of Ukraine, the besieged Eastern European state has received $120 million in crypto-based donations from traders worldwide. The influx of donations prompted Ukraine to adopt cryptocurrency as a legal tender. Crypto adoption by a government had been precedent by El Salvador's 2021 recognition of Bitcoin as legal tender.