Goldman Sachs Sets Eyes on Ethereum: What Changes?
2022.04.06 15:37
Goldman Sachs Sets Eyes on Ethereum: What Changes?
Wall Street giant Goldman Sachs Group (NYSE:GS) is planning to launch an over-the-counter (OTC) Ether option trading “in due course” as the client demand for options tied to the second biggest crypto is rising.
As Goldman’s team shared yesterday, the growing number of investment banks’ clients are shifting to Ether, which becomes “more of an investable asset class” than the leading Bitcoin. The Ethereum dev team plans to accomplish networks migration to the Proof of Stake consensus mechanism this summer.
Help to Predict Price Direction
As financial derivatives, options give traders the right, but not the obligation, to buy or sell assets at a predetermined price within a specific period of time. By buying an option, investors can postpone the purchase or sale of an asset. At the same time, they can make a substantial profit without investing a large amount of money.
Due to their higher accessibility and awareness of features, options have recently become one of the most popular investment forms, also among retail traders. Last year, for instance, the daily options trading amounts increased by 35% compared to the previous years.
The thing is, options data can be used to predict the further direction of the whole market or of a specific asset.
More of Untrackable Movements
As one of the biggest investment banks worldwide, Goldman Sachs accounts for more than 3 million customers in total. Each of them must have at least $10 million in investable assets to open an account.
This suggests, that capital inflows into Ethereum options trades might as well be significant.
However, the OTC trades change a lot in this situation. Over-the-counter trades are executed privately and happen outside of the exchanges. In other words, they act like direct trades between the two parties, without anyone else knowing and tracking.
Given this fact, the chances that volumes of ETH option trades will be reflected on crypto exchanges and data tracking platforms are low. More whales will be moving assets unnoticed.
Goldman Sachs offered its first OTC Bitcoin options trading last month and currently supports access to crypto ETPs on Canadian and European exchanges. The bank still does not support cryptocurrency spot trading.
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