Goldman Sachs Executes First-Ever Ether-Linked Derivative Trade

Banking giant Goldman Sachs began trading a derivative asset tied to Ether on Monday. The asset is intended to provide investors with indirect exposure to Ether – the second-largest cryptocurrency by market cap.

• As reported by Bloomberg, the counterparty of the trade was Marex Financial – a London-based financial services firm.
• The move comes on a day when the entire crypto market – including Ether – has fallen to lows unseen since December 2020. The total market is now worth less than $1 trillion, with Bitcoin’s market cap below $450 billion.
• The trade arguably indicates a sense of long-term faith in crypto as an asset class, despite recent downturns. In January, the company’s former CEO admitted that crypto is “happening” after being a longtime skeptic.
• In the past, the bulk of Goldman’s crypto trading options has centered around Bitcoin-linked derivatives, after restarting such services in July of 2021. It became the first major US bank to offer a Bitcoin OTC options trade in March.
• Goldman announced that it would soon offer cash-settled Ether trading options in April, and even claimed the crypto could surpass Bitcoin as a store of value in July 2021.
• The bank initially expected Ether to reach $8000 by the end of 2021, but that prediction fell far off target.
• In February of 2020, both Goldman Sachs and Citigroup experimented with a blockchain-based equity swap, similar to those possible with Ethereum.