Goldman Sachs moves to let investors bet on bitcoin's price with new derivatives: report

Goldman Sachs has moved to offer derivatives products tied to the price of bitcoin to its clients, according to Bloomberg.

The derivatives in question are non-deliverable forwards, which are contracts between two parties that agree to settle at a certain date the difference between the spot price and the contracted price. In essence, these NDFs allow Goldman clients to speculate on the price of bitcoin.

THE SCOOP

Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

The contracts pay in cash, and on Goldman's side, the firm "protects itself from the digital currency's famous volatility by buying Bitcoin futures in block trades on CME Group Inc. using Cumberland DRW as its trading partner," per Bloomberg.

According to the report, Goldman quietly began offering these derivatives to its clients last month. In 2018, the New York Times reported that Goldman was planning to create non-deliverable forwards tied to bitcoin.

That Goldman has moved in this direction is unsurprising, given reports in late March that the Wall Street megabank was looking to offer bitcoin-centric investment vehicles to its wealth management clients. The scope of those offerings includes derivatives, as reported at the time.