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Finance

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.

By Tanzeel Akhtar
AccessTimeIconMay 6, 2021 at 7:38 p.m. UTC
Updated May 9, 2023 at 3:19 a.m. UTC
Goldman Sachs Hands Clients Losses In 'Top Trades'

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

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    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.