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Goldman Sachs Offering Bitcoin Derivatives to Investors

The bank will protect itself from the cryptocurrency’s volatility by buying and selling bitcoin futures in block trades.

May 6, 2021 at 7:38 p.m. UTC
Updated Sep 14, 2021 at 12:51 p.m. UTC

Goldman Sachs is offering investors access to non-deliverable forwards (NDFs), a derivative tied to bitcoin’s price that pays out in cash, according to a Bloomberg report. When reached by CoinDesk, the investment bank confirmed the news.

  • The bank will then protect itself from volatility by buying and selling bitcoin futures in block trades through CME Group, using Cumberland DRW as its trading partner.
  • NDFs are futures contracts in which counterparties settle the difference between the negotiated NDF price or rate and the spot price or rate on a notional agreed sum.
  • In January, CME took the prime spot on the list of the biggest bitcoin futures trading platforms, indicating a continued rise in institutional participation. 
  • In March, Goldman Sachs relaunched its cryptocurrency trading desk after a three-year hiatus, with plans to once again support bitcoin futures trading.
  • A source with knowledge told CoinDesk that Goldman quietly began offering bitcoin derivatives contracts to clients last month to test its hedging methods.

UPDATE (May 6, 19:40 UTC): Adds confirmation from Goldman Sachs.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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