Goldman Sachs to Launch Over-The-Counter Ether Options Trading Soon

The Wall Street investment bank recently traded its first over-the-counter Bitcoin option with Galaxy Digital.

By Shomik Sen Bhattacharjee | Updated: 6 April 2022 18:42 IST

Goldman Sachs to Launch Over-The-Counter Ether Options Trading Soon

Photo Credit: Unsplash/ shutter_speed

OTC transactions usually involve large transactions and are geared towards institutional traders

Highlights

The banking giants' clients already have access to ETH derivatives
Goldman Sachs recently began offering Bitcoin options OTC trading
Ether’s price has improved significantly since mid-March

Goldman Sachs said it is planning to offer over-the-counter (OTC) options trading for Ethereum to its clients. The investment bank cited growing client interest in the token ahead of its widely anticipated shift to a proof-of-stake (PoS) model. The move comes just a few weeks after the bank executed an OTC options trade for Bitcoin, a first for a major Wall Street bank. The transaction was through digital fund manager Galaxy Digital, which is the biggest provider of liquidity for Goldman Sachs' crypto products.

The bank's global head of crypto trading, Andrei Kazantsev, flagged the move during a client webinar, as per a Bloomberg report. He said the investment bank is planning to launch the product “in due course.”

Client interest appeared to be shifting towards the world's second-largest cryptocurrency as it heads to a PoS model. The move would make the token far more approachable from an investment perspective.

OTC transactions usually involve large transactions and are geared towards institutional traders. The bank's foray into OTC crypto options also highlights the growing interest in crypto from big trading houses, which comprise most of Goldman's clientele.

The bank does not offer spot crypto trading but offers access to crypto ETFs and options trade. Institutional traders usually prefer to invest in crypto through a proxy, as opposed to holding tokens directly.

Ether, meanwhile, has seen a large spike in trading ahead of its upgrade to ETH 2.0. The low energy and computational requirements of staking are expected to make the token far more accessible.

The prospect of high returns on staking could also attract debt investors, who otherwise get double-digit yields from much riskier debt instruments. Staking, which involves locking in the token for a set period of time, would also make the token similar to a bond.

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