Bloomberg: Goldman Sachs to expand its range of cryptocurrency derivatives

The investment bank Goldman Sachs is considering offering over-the-counter bilateral cryptocurrency options. Bloomberg reports this.

According to sources, the firm — among a small group of Wall Street banks — is at an early stage of examining such products.

The bilateral options allow structuring trades so that holders of cryptocurrencies, such as funds or Bitcoin miners, can hedge risks or boost returns.

The market for such derivatives remains embryonic, dominated by crypto firms such as Genesis Global Trading, Galaxy Digital Holdings, and GSR. Among traditional market players, the trading giant DRW Holdings is notably present as a liquidity provider.

In 2021 Goldman Sachs offered clients trading futures and options on Bitcoin and Ethereum. The bank also launched non-deliverable forwards on Bitcoin with fiat settlement.

Earlier, Andrey Kazantsev, head of crypto-trading development at Goldman Sachs, noted that the bank had seen demand for hedging via derivatives, and that developing the options market would be the next major step. He said the firm provides liquidity and assumes client risks, aiding large transactions.

In January, Goldman Sachs is exploring the possibility of creating its own stablecoin, though it does not intend to issue it in the near future.