Goldman Sachs begins trading the first-ever Ethereum-linked derivative product

    14 Jun 2022

    Goldman Sachs has expanded its client-facing crypto offering with a derivatives product linked to Ether (ETH), according to Marex Financial statement.

    The investment bank restarted its crypto operations in 2021 as a flood of institutional money entered the market, the core of its offerings has centered around derivatives tied to cryptocurrencies like Bitcoin.

    Today, amid a market tumult, Goldman has commenced a derivatives product linked to the price of Ether – the possibility of an ETH-linked derivative product was first mooted by the bank in June 2021.

    According to Monday’s statement, this was the first over-the-counter (OTC) non-deliverable forward (NDF) crypto trade on Ether by Goldman, with London-based Marex acting as the counterparty. Marex’s hedging and investment solutions arm, Marex Solutions, organized the trade.

    An NDF is a derivative product that allows the holder to have exposure to an asset without having to hold it. This pays out in cash based on the price of Ether at the time of settlement.

    Back in April, Goldman Sachs started to offer its first-ever lending facility backed by Bitcoin, a significant step for a traditional financial institution. It allows crypto owners to receive fiat by using their crypto assets as collateral, which is the first case for Wall Street banks.

    Coinbase, a major crypto exchange, has become the first who take out a loan from Goldman Sachs using its Bitcoin assets as collateral. The amount of the historic transaction has not been disclosed, but the collateral for it was based on a portion of Coinbase’s Bitcoin Holdings.

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