Goldman Sachs completes first OTC crypto options trade with Galaxy

March 21, 2022 Coin Telegraph

Galaxy Digital previously facilitated the launch of Goldman Sachs’ Bitcoin futures trading product for CME Group in June 2021.

American investment bank Goldman Sachs continues to expand its cryptocurrency trading expertise by executing its first-ever over-the-counter (OTC) crypto options trade.

Goldman Sachs executed its first OTC crypto transaction in collaboration with the trading unit of Michael Novogratz’s cryptocurrency investment management firm Galaxy Digital.

According to a joint announcement on Monday, the OTC transaction was in the form of a Bitcoin (BTC) non-deliverable option, representing one of the first OTC crypto transactions by a major bank in the United States.

“We are pleased to have executed our first cash-settled cryptocurrency options trade with Galaxy,” said Max Minton, Asia Pacific head of digital assets at Goldman Sachs. He noted that the development marks an important milestone in Goldman Sachs’ digital assets capabilities as well as for the “broader evolution of the asset class.”

The latest collaboration between Goldman Sachs and Galaxy Digital also represents a continuation of the bank’s partnership with Galaxy to improve its crypto capabilities.

As previously reported, Galaxy facilitated the launch of Goldman Sachs’ Bitcoin futures trading product for CME Group in June 2021. According to data from the U.S. Securities and Exchange Commission, Goldman Sachs also offers its clients exposure to the Ether cryptocurrency (ETH) through Galaxy Digital’s Ethereum Fund.

“We are pleased to continue to strengthen our relationship with Goldman and expect the transaction to open the door for other banks considering OTC as a conduit for trading digital assets,” Galaxy Digital co-president Damien Vanderwilt said.

Goldman Sachs is one of the biggest traditional financial institutions in the United States to be involved in the cryptocurrency industry. The financial giant is known for backing Circle, the blockchain technology firm operating the USD Coin (USDC), the second-largest stablecoin by market capitalization. Last year, Goldman Sachs made a historic move into the crypto industry, launching its first trading services for BTC derivatives and Ether derivatives.

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Andreessen Horowitz

The megabank is offering investors access to Galaxy Digital's ETH fund, while a16z just splurged $70 million on an Ether staking protocol.

Wall Street’s embrace of digital assets is showing no signs of slowing down. In fact, they don’t even need to tell us about it as the proof is in the fine print. This week, a United States Securities and Exchange Commission (SEC) filing revealed that multinational investment bank Goldman Sachs has been quietly offering clients exposure to Ether (ETH) through Galaxy Digital, a crypto-focused financial services provider headed by billionaire Mike Novogratz.

Of course, this isn’t the first time Goldman has worked with Galaxy Digital to offer clients a gateway to digital assets. In June 2021, the investment giant began trading a Bitcoin (BTC) futures project in collaboration with Galaxy Digital. Like other financial services giants, Goldman Sachs sees the writing on the wall and realizes that crypto is an emerging asset class with long-term potential. Either that or its clients really want to invest in crypto.

This week’s Crypto Biz newsletter features classic storylines about a major Wall Street bank expanding its crypto offerings and venture capital continuing to pour hundreds of millions of dollars into blockchain startups. We also take a deeper dive into Binance’s new crypto-to-fiat gateway.

Goldman Sachs is hooking clients up with Galaxy Digital’s ETH fund

According to regulatory documents filed with the SEC, Goldman Sachs has already begun offering ETH investments to its clients through Galaxy Digital, possibly opening the door to wider institutional adoption of digital assets. The Form D filing, which was submitted by Galaxy Digital, listed Goldman Sachs as a recipient of introduction fees for referring clients to the Galaxy ETH Fund. As per the filing, Goldman is accepting a “minimum investment” of $250,000 per client for exposure to the investment product. Interestingly, the filing appeared on the SEC’s website just two days after Lloyd Blankfein, Goldman’s senior chairman, tweeted that he’s “Keeping an open mind about crypto.”

Keeping an open mind about crypto, but given the inflating US dollar and the stark reminder that governments can and will under certain circumstances freeze accounts and block payments, wouldn’t you think crypto would be having a moment now? Not seeing it in the price, so far….
— Lloyd Blankfein (@lloydblankfein) March 7, 2022

Bain Capital Ventures sets up a half-billion-dollar fund for crypto projects

The crypto economy has received renewed interest from the venture capital community after Bain Capital Ventures, a Massachusetts-based asset management firm, announced the creation of a $560 million fund dedicated to blockchain startups. According to Bloomberg, the firm has already invested $100 million in 12 undisclosed projects. Cointelegraph managed to get ahold of a Bain Capital Ventures representative, who informed us that the crypto fund is focused on supporting open internet infrastructure — that probably means Web3. I’ve spent the last six months screaming from the rooftop that venture capital funding is changing the composition of the crypto industry. Not accounting for price appreciation for crypto assets, the influx of VC capital is one of the most bullish indicators we have for the industry right now.

Binance to focus on crypto payments with new subsidiary Bifinity

As the world’s largest cryptocurrency exchange by trading volume, Binance has a lot of resources to address the ever-growing needs of the digital asset community. This week, the Changpeng Zhao-led company unveiled Bifinity, a new fiat-to-crypto payment onramp that allows merchants to provide crypto services to their customers. Bifinity has already secured partnerships with crypto-focused platforms such as Safepal and Zilliqa, as well as payment solutions Paysafe and Checkout.com. Binance has been exploring fiat gateways since at least 2020 and only recently finalized its acquisition of Swipe, a leading crypto Visa card provider. (I’ll be honest, though, the partnership with Zilliqa — a blockchain sharding developer — was a bit surprising.)

Andreessen Horowitz invests $70M in Ethereum staking protocol Lido

Silicon Valley venture firm Andreessen Horowitz has made another big splash in the cryptocurrency market by investing $70 million in Ethereum staking solution Lido Finance. The cash injection will be used by Lido’s developers to further support the adoption of staking solutions on Ethereum 2.0, which has been renamed as the consensus layer. Andreessen likes Lido because the protocol makes it easier for users to stake Ether without having to meet the 32 ETH threshold to become a network validator. Although 32 ETH didn’t amount to much a few years ago, it now sets you back almost $90,000 at current prices.

Excited to share that @a16z has invested $70M in @LidoFinance, one of the easiest ways to stake ETH and other PoS assets, and we used Lido to stake a portion of our ETH holdings on the Beacon chain. More from @DarenMatsuoka & @_PorterSmith: https://t.co/vc2tzDJ3mS
— cdixon.eth (@cdixon) March 3, 2022

Before you go…

The Terra ecosystem continues to generate a lot of buzz in the cryptocurrency community. This week, the network’s native token Terra (LUNA) reached new all-time highs after a 30% rally in just three days. The latest edition of The Market Report took a deep dive into up-and-coming Terra ecosystem projects. You can watch the replay to learn more about exciting projects such as StarTerra, Loop Finance and Mirror Protocol.

Crypto Biz is your weekly pulse of the business behind blockchain and crypto delivered directly to your inbox every Thursday.

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February 25, 2022 Coin Telegraph

Business

Roger Bartlett is the latest in a line of Wall Street executives who have moved into the blockchain and crypto space.

Roger Bartlett, a Goldman Sachs veteran who has held various positions at the firm since 2005, announced he would be moving to Coinbase.

In a Friday announcement on LinkedIn, Bartlett said he would be running global financial operations at Coinbase after 16 years at the investment banking giant. The now-former global co-head of operations for global markets at Goldman Sachs said he would be working with Coinbase chief financial officer Alesia Haas, president and chief operating officer Emilie Choi, vice president of institutional products Greg Tusar, and head of institutional sales Brett Tejpaul to help users “embrace opportunities offered by digital assets and its ecosystem.”

“It’s time to embrace the crypto economy,” said Bartlett. “It’s time to [...] follow my passion to help enable the next generation crypto economy. The inspiring purpose-led mission to create economic freedom in the world, in a customer first, automation first approach is a once-in-a-lifetime opportunity to be part of building the next stage of the digital evolution.”

Bartlett was the latest in a line of Wall Street executives who have moved into the crypto space. Gaurav Budhrani, a 10-year veteran at Goldman Sachs, joined crypto mining firm PrimeBlock in November 2021 as CEO along with former managing director Alan Konevsky as its chief legal officer. Later that month, former Citi executive Matt Zhang also launched Hivemind, a venture fund aimed at crypto and blockchain startups.

Coinbase has posted record Q4 earnings with 91% of its net revenue, or more than $2.2 billion, from transaction fees alone https://t.co/DW9rXrJYLX
— Cointelegraph (@Cointelegraph) February 25, 2022

The announcement came shortly after Coinbase released its financial report for the fourth quarter of 2021, in which the company said it planned to hire 6,000 employees in 2022 with a focus on customer support and reliability. According to a letter to shareholders released on Thursday, the crypto exchange had 3,730 full-time employees as of Dec. 31, roughly three times that in 2020.

Can Bitcoin break out vs. tech stocks again? Nasdaq decoupling paints $100K target

February 20, 2022 Coin Telegraph

Bitcoin

Bitcoin's growth has quickly outpaced Nasdaq's in the past ten years.

A potential decoupling scenario between Bitcoin (BTC) and the Nasdaq Composite can push BTC price to reach $100,000 within 24 months, according to Tuur Demeester, founder of Adamant Capital.

Bitcoin outperforms tech stocks

Demeester depicted Bitcoin's growing market valuation against the tech-heavy U.S. stock market index, highlighting its ability to break out every time after a period of strong consolidation.

"It may do so again within the coming 24 months," he wrote, citing the attached chart below.

*BTC/USD vs. Nasdaq Composite weekly price chart. Source: Tuur Demeester, StockCharts.com*

BTC's price has grown from a mere $0.06 to as high as $69,000 more than a decade after its introduction to the market, as per data tracked by the BraveNewCoin Liquid Index for Bitcoin (BLX).

*BTC/USD versus Nasdaq Composite monthly price chart. Source: TradingView*

That amounted to around a 64.50 million percent increase in Bitcoin's price since 2010. In comparison, Nasdaq's returns in the same period come to be nearly 650% — from 20.99 points on June 22, 2020, to 171.54 as of Feb. 18, 2022. As a result, Bitcoin's market cap has grown to $755 billion compared to Nasdaq's $28.68 billion.

Will Bitcoin decouple from tech stocks again?

Bitcoin's history so far has witnessed multiple periods of its strong correlation with U.S. tech stocks. For instance, earlier this month, the cryptocurrency's correlation efficiency with Nasdaq reached 0.73, almost near its five-year high of 0.74 in 2020, as per data from Bloomberg.

*Bitcoin and tech stocks price performance since. September 2017. Source: Bloomberg*

BTC's price per token dropped from its record high of $69,000 to below $33,000 last month amid a selloff across broader risk-on markets. The decline was accompanied by the Federal Reserve's decision to aggressively raise benchmark rates against rising consumer prices, which reached their four-decade high in January 2022.

Matthew Sigel, head of digital assets research at VanEck Associates, anticipated Bitcoin to fall alongside Nasdaq and other U.S. stock indexes, albeit more severe. However, he notes that Bitcoin's volatility has been in a downtrend in recent years. In comparison, Nasdaq 100 has been exhibiting more standard deviation moves than its five-year average.

The outlook portrays that Bitcoin has been gradually improving to become a dependable safe-haven asset against rising inflation. As a result, its correlation with risk-on assets, such as tech stocks could decline.

"It's correlated for now," said James Butterfill, head of research at data analytics firm CoinShares, told Bloomberg, adding that the cryptocurrency is "quite sensitive to rising interest rates" fears. He noted:

"But what happens in a situation where you have a policy mistake, i.e. the Fed hikes too aggressively, for instance, or they don't hike aggressively enough, and there's an inflation problem. That would actually probably be much more supportive of Bitcoin and less supportive for equities."

Additionally, Joey Krug, CEO of Pantera Capital — a crypto-focused hedge fund, anticipates the decoupling to happen in the "next number of weeks," noting that "crypto will begin to trade on its own."

That $100K BTC price target

Demeester cited Bitcoin's ability to consolidate around $50,000 despite reeling under the pressure of its correlation with Nasdaq as one of the primary reasons why it could embark on a run-up toward $100,000.

Related: https://t.co/0qBrwPQCLe
— Tuur Demeester (@TuurDemeester) February 19, 2022

The price target came in line with what Goldman Sachs anticipated at the beginning of 2022. The investment giant, which manages $1.2 trillion worth of assets globally, noted that Bitcoin could reach $100,000 if it takes some part of the market share of gold, a traditional safe-haven asset. Today, Bitcoin's market cap is just under 6% of gold's.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Goldman Sachs