Goldman Sachs is the first major U.S. bank to make this kind of transaction
It is reported that the Goldman Sachs Group Inc. (GS) conducted its first ever over-the-counter (OTC) cryptocurrency trade with the trading partners of Galaxy Digital Holdings Ltd. (GLXY), Bitcoin pr news distribution service .1 This is the first transaction of this kind by the largest U.S. bank.
Bitcoin (BTC) trade executed by Goldman Bitcoin ( BTC) trade that Goldman executes Goldman has the status of a non-deliverable choice (NDO) that is also known as an settled option that is cash-based. This means that , when it is time to settle the options rather than receiving Bitcoin the option holder gets the value of the option in cash. The Goldman transaction is a change from its previous digital transactions for CME Group, the derivatives marketplace CME Group and signifies its willingness to accept the additional risk associated with the OTC deal. 2 An OTC trade is conducted directly between counterparties, without the use of an central exchange.
- Goldman conducted its inaugural Bitcoin OTC trade, marking an institutionalization of cryptocurrency.
- The non-deliverable option is offered to Goldman Trading Partner Galaxy is due to settle with cash upon the time of maturity.
- Bitcoin has been viewed as a hedge against inflation; Bitcoin press news distribution service ,The Goldman’s debut BTC OTC trade comes as inflation has been rising across the globe.
Goldman Sachs’ Partnership With Galaxy Digital
Goldman has utilized Galaxy as its service provider for cryptocurrency in markets for spot, forwards and digital asset exchanges and for transactions that involve fiat banking organizations.3 The company announced in June of 2021 that Goldman requested Galaxy to introduce their Bitcoin futures trading product to CME Group. CME Group. Goldman has also begun providing its investors with access to the digital currency Ethereum ( Ethereum) via Galaxy’s Ethereum Fund. 4
In May 2021, Goldman launched its Bitcoin trading desk, and it began to offer Bitcoin non-deliverable forwards Its price is linked to Bitcoin’s. 5
Galaxy provides over 100 digital assets, and supports transactions on central exchanges and on OTC markets, Bitcoin press release distribution service .
The Bottom Line
The first OTC cryptocurrency execution in the context of rising inflation poses the question of whether Bitcoin is a reliable hedge against rising inflation. It is often referred to by the term “digital gold,” Bitcoin’s absolute limit of 21 million is designed to counter the depreciation of fiat currency. Through the execution of an OTC trade, and making use of Galaxy as the source of liquidity for its crypto-options transaction, Goldman is making direct customizing crypto trading for investors for the very first time. However as this trading is executed as cash-settled alternatives that could counter Bitcoin’s claimed ability to safeguard against the loss of fiat currencies, Bitcoin press release distribution .
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