American bank: Goldman Sachs becomes the first American bank to offer over-the-counter crypto trading

Goldman Sachs, a major US bank, is set to announce and become the first bank to trade an over-the-counter crypto transaction. Pushing its development of digital assets further in the market, Goldman with Galaxy Digital sold a new undeliverable option, a bitcoin-linked instrument.

The move is seen as an unprecedented step in the growth of the crypto market for investors due to OTC transactions. This step also represents the bank’s first direct exposure to the Bitcoin trading and crypto market instead of its customers.

Institutional players like Hedge Funds have been looking for ways to integrate bitcoin into their operating system. Since Goldman is involved in increasing the maturity of Hedge assets, this will force them to bet on the price without directly owning it.

Goldman, however, took a significant risk by becoming principal in all of these deals when put into perspective with its CME Group exchange-based bitcoin products.

Words from Galaxy Co-Chair Vanderwilt

Vanderwilt believes this is a much more systematic and relevant shift due to the upcoming future of exchange-based markets and products. He also says that while this looks like a big risk, it only reinforces banks’ faith and confidence in the maturity of crypto.

What is OTC crypto trading?

Over-the-counter crypto trading is a private transaction, i.e. the buying or selling of crypto and bitcoins. These agreements occur between two parties without the intervention of an intermediary. Parties can exchange one type of cryptocurrency for another type of cryptocurrency.

How will Goldman Sachs’ new move in crypto trading affect the market?

Due to OTC crypto trading, there will be a noticeable development in the market. There are many ways this crypto trading will affect the market. Some of them are listed below.

  • Although risky, this move will surely open up more choices in the cryptocurrency trading system.
  • This will provide direct and customizable exposures to the crypto market.
  • This will pave the way for other financial institutions to get into bitcoin trading.
  • In addition, this decision will eliminate the traditionally slow negotiation process. Goldman’s crypto trading is fast and the transactions available to investors are limited.

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