Renowned investment bank Goldman Sachs has started offering a new Bitcoin-based investment product.
Bloomberg reports that this derivative would allow Wall Street investors place big bets on the price of BTC.
Yesterday, shortly after the announcement, the price of bitcoin suddenly fell 2.8% in less than an hour, before climbing slightly to settle between $ 55,300 and $ 56,600.
The new ones Goldman Sachs derivatives they are non-deliverable futures contracts paid for in cash and tied to the price of BTC. To hedge against volatility, the bank will buy and sell bitcoin futures contracts on the Chicago Mercantile Exchange (CME), using Cumberland DRW as a trading partner.
Actually, the bank has already been active in the crypto derivatives market for some time with its desk, but not in the spot market yet.
Goldman Sachs brings new capital to Bitcoin
Goldman Sachs' Head of Digital Assets for Asia Pacific, Max minton, He said:
“Institutional demand continues to grow significantly in this space and being able to work with partners like Cumberland will help us expand our capabilities. The new offering is paving the way for us to develop our nascent cash-settled cryptocurrency capabilities. ”
Cumberland DRW's Global Director of Business Development, Justin chowadded:
“Goldman Sachs serves as a benchmark for how sophisticated institutional investors deal with changes in the market. We have seen rapid adoption and interest in cryptocurrencies from more traditional financial firms this year, and Goldman's entry into the space is another sign of how it is maturing. "
Goldman Sachs announced in March that it plans to offer its clients additional vehicles to invest or speculate on cryptocurrency prices.
Many financial institutions are still hesitant to take responsibility for keeping full BTC in their own proprietary wallets, preferring to use regulated derivative products that are much easier for them to use.
These new instruments could bring a large amount of new capital to the cryptocurrency markets, but not necessarily for investment purposes.
For example, in mid-December 2017, when bitcoin futures contracts were launched for the first time in history on a major exchange like Chicago, the speculative bubble that was at the time over the price of BTC burst and the value of bitcoin fell 70% in just over a month and a half.
Yesterday's Goldman Sachs announcement may have spooked some speculators leading them to believe that these new instruments could be used primarily to bet against BTC.