Goldman Sachs Expands Ethereum Trading Options With First-Ever ETH-Linked Derivative Trade

Table of Contents

• Trade Indicates Long-Term Faith 
• Diversifying From Bitcoin-Linked Derivatives 
• Bullish On Ethereum 

Goldman Sachs successfully completed the first-ever Ether-linked derivative trade on Monday. The derivative asset will indirectly expose investors to ETH, the second-largest cryptocurrency by market capitalization. 

Marex Financial, a London-based financial firm, was the trade counterparty. 

Trade Indicates Long-Term Faith 

Goldman Sachs executed its first-ever ETH-linked derivative trade against the backdrop of a bearish crypto market, with the entire crypto market, including ETH, tumbling to record lows not seen since the end of 2020. In fact, such has been the drop that the crypto market cap has slipped below $1 trillion, with Bitcoin’s market cap falling below $450 billion as well. 

The trade could highlight a long-term faith in the crypto markets and crypto as an asset class, despite the recent bearish turn. Back in January, the former CEO of Goldman Sachs had admitted that crypto is “happening” despite being a long-term skeptic, indicating a change in perception. The former CEO had stated in an interview, 

“It’s lost a lot of value, but at a point where it’s trillions of dollars of value contributing to it and whole ecosystems are growing around it. Of course, we have the benefits of instantaneous transfer and reduction of credit risk and all the benefits of blockchain. “I can’t predict the future, but I think it’s a big thing to be able to predict the present, like, ‘What is happening?’ And I look at the crypto, and it is happening.”

Diversifying From Bitcoin-Linked Derivatives 

While Goldman Sachs has provided crypto trading options in the past, most of it has centered around Bitcoin and Bitcoin-linked derivatives. The bank became the first major bank in the United States of America to offer a bitcoin OTC trade in March and has now launched its first-ever ETH-linked derivative trade. 

Bullish On Ethereum 

Back in 2021, Goldman Sachs was hugely bullish on Ethereum, predicting that rising inflation could push the price of ETH to $8000 by the end of 2021. However, it is plain to see that prediction has fallen way off the mark. Goldman had also announced back in April that it would soon be offering cash-settled Ether-trading options and had also claimed that ETH could surpass BTC as a store of value at some point. It is important to point out that Goldman Sachs was one of the most vocal critics of cryptocurrencies. However, it has, along with leading Wall Street giants, changed their viewpoint of crypto in recent months. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.