Investment bank Goldman Sachs (GS) has become the first major U.S. bank to trade cryptocurrencies over the counter.
Goldman Sachs is now trading a Bitcoin-linked (BTC) instrument called a “non-deliverable option” with cryptocurrency merchant bank Galaxy Digital, the firms announced in a news release.
The move is seen as a notable step in the development of cryptocurrency markets for institutional investors.
Compared with the exchange-based CME Group Bitcoin products Goldman Sachs began trading last year, the bank is taking on greater risk by acting as a principal in the transactions.
That Goldman, a top player in global markets for traditional assets, is involved in cryptocurrency trading is seen as a sign of the increased maturity of the asset class for institutional players such as hedge funds.
Hedge funds have been seeking derivative exposure to Bitcoin, either to make wagers on its price without directly owning it, or to hedge existing exposure to it, according to Goldman Sachs.
