Goldman Sachs Begins Trading Ethereum Derivatives

Amidst a declining cryptocurrency market, investment bank Goldman Sachs began trading a derivative asset linked to the second-largest cryptocurrency, Ether (ETH). The move marks the first time the bank has traded in crypto, signifying faith in the market, which has fallen to six-month lows recently.

In addition to its first trade of Ethereum non-deliverable forwards, Goldman will offer over-the-counter (OTC) Ether options trading. The derivative contract pays out in cash, which will give investors indirect exposure to Ether. Users also benefit from enhanced counterparty risk management and increased capital efficiency. Marex Financial was the counterparty in the transaction, Bloomberg reported.

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Previously, Goldman’s crypto trading options revolved around Bitcoin-linked derivatives. In March, it became the first major U.S. bank to offer a Bitcoin OTC options trade.

For four years, the bank has been clearing CBOE and CME Bitcoin futures contracts and has been offering clients liquidity for them. It has been examining the possibility of tokenization and stablecoins as part of updating its legacy payment system, according to Chief Executive Officer David Solomon.

Solomon said he might also consider launching a Goldman Sachs cryptocurrency after JPMorgan Chase became the first U.S. bank to launch its own digital token, JPM Coin, in October 2020.

The total crypto market is now worth less than $1 trillion, down from a high of over $3 trillion in November 2021. The largest cryptocurrency, Bitcoin, now has a market cap below $450 million, down from a high of roughly $1.27 trillion last November.