TL;DR Breakdown
- Goldman Sachs plan to introduce Ethereum OTC options trading
- This is due to the growing interest of their clients in Ethereum
Goldman Sachs, one of America’s biggest investment banks, has stated intentions to introduce over-the-counter (OTC) options trading for Ethereum to its customers. This was made known by the bank’s global head of crypto trading, Andrei Kazantsev during an online client seminar. He stated this decision was reached due to the increasing interest of clients in Ethereum and the bank plans to set up the system ” in due course”.
This development came just over two weeks ago when Goldman Sachs introduced OTC options trading for the premier cryptocurrency, Bitcoin. They are the first major bank in the U.S to implement such a system and it was executed in conjunction with Galaxy Digital, a crypto investment management firm and Goldman Sachs’s largest liquidator for crypto products.
Goldman Sachs’ new adventure into OTC options trading for crypto-asset only indicates an interest in cryptocurrency by major trading houses, which make up a majority of the bank’s client list. Also, while the bank does not conduct spot crypto trading, its customers have access to trading crypto exchange-traded funds( ETF).
Goldman Sachs’ clientele anticipates Ethereum Shift to a Proof-of-Stake model
Currently, Ethereum is the 2nd most valuable cryptocurrency in the world. In November 2021, the token hit its all-time high of $4,891.70, and it currently trades at $3,352.91, which is just 28 percent less than the ATH value.
The dramatic rise in Ethereum’s price over the last few years is a result of its blockchain’s technological application in the crypto world. This includes smart contracts, Non-Fungible Tokens (NFTs), Decentralized Applications(dApps), and so on. NFTs are the most popular application of the Ethereum blockchain and while other blockchains can develop NFTs, Ethereum supports a large percentage of NFTs in the crypto world.
However, the recent surge in interest in Ethereum among Goldman Sachs clients – and the rest of the world – is due to the cryptocurrency’s expected transition from a proof-of-work (PoW) to a proof-of-stake (PoS) model. This will allow Ether holders to stake their tokens, which will be used to verify blockchain transactions while earning interest in the double digits.
Moreover, this new method eliminates the high transaction fees present with the current model. From an investment point of view, this makes the crypto asset attractive. As of March 2022, there are over 10 million Ether tokens already staked in anticipation of the upgrade (ETH 2.0) per data from Dune Analytics.
