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Goldman Sachs Offering Bitcoin Derivatives to Investors
The bank will protect itself from the cryptocurrency’s volatility by buying and selling bitcoin futures in block trades.
Updated May 9, 2023, 3:19 a.m. Published May 6, 2021, 7:38 p.m.
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Goldman Sachs is offering investors access to non-deliverable forwards (NDFs), a derivative tied to bitcoin’s price that pays out in cash, according to a Bloomberg report. When reached by CoinDesk, the investment bank confirmed the news.
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- The bank will then protect itself from volatility by buying and selling bitcoin futures in block trades through CME Group, using Cumberland DRW as its trading partner.
- NDFs are futures contracts in which counterparties settle the difference between the negotiated NDF price or rate and the spot price or rate on a notional agreed sum.
- In January, CME took the prime spot on the list of the biggest bitcoin futures trading platforms, indicating a continued rise in institutional participation.
- In March, Goldman Sachs relaunched its cryptocurrency trading desk after a three-year hiatus, with plans to once again support bitcoin futures trading.
- A source with knowledge told CoinDesk that Goldman quietly began offering bitcoin derivatives contracts to clients last month to test its hedging methods.
Read more: Goldman Sachs to Offer Bitcoin to Wealth Management Clients
UPDATE (May 6, 19:40 UTC): Adds confirmation from Goldman Sachs.
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