Goldman Sachs plans to offer OTC Crypto options trading for Ether ahead of Ethereum 2.0 upgrade

  • Goldman Sachs says that its clients see Ethereum as an “investable asset class” and have a growing demand for Ethereum OTC options.
  • All eyes are currently on the Ethereum 2.0 – The Merge – event which will push ETH burning while introducing more efficiency and scalability.

Last month, Wall Street banking giant Goldman Sachs started offering over-the-counter (OTC) Bitcoin options trading in partnership with Galaxy Digital. Now, the banking giant is planning to introduce the same services for OTC Ether options.

Andrei Kazantsev, Goldman’s global head of crypto trading said that there’s been a growing interest from the bank’s clients for the world’s second-largest digital asset. Goldman will launch its cash-settled Ether options “in due course,” he said.

Crypto investors use options trading either to hedge risks or boost yields. And these OTC transactions are typically larger trades negotiated privately. Client conversations at Goldman Sachs are growing around Ether (ETH) who see it as “more of an investable asset class”. The Wall Street giant has yet to offer spot trading services for crypto. But Kazantsev added that the firm still offers its clients access to European and Canadian exchange-traded products.

Ever since the crypto market bull following the March 2020 crash, Ethereum (ETH) has been outperforming Bitcoin. Since March 15, Ether (ETH) has once again outperformed Bitcoin (BTC) by 32 percent. As of press time, Ethereum (ETH) is trading at a price of $3,357 with a market cap of $403 million.

Ethereum 2.0 The Merge

The Ethereum blockchain platform is all set for ‘The Merge’ which is one of the most awaited updates. The Merge of the Ethereum execution and the consensus layer will help Ethereum reduce its carbon footprint while simultaneously improving its efficiency and scalability.

Furthermore, The Merge will slow down Ethereum’s new supply thereby sending token prices higher. Explaining this, crypto market analyst Lark Davis wrote:

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At -2.8% supply growth a year post Merge, #ethereum will see about 3.3 million ETH a year burned. By the end of the decade total ETH supply will drop under 100 million. Or put another way, we will burn the equivalent of ALL ETH currently sitting on exchanges!!!!

Since the implementation of the EIP-1559 protocol, nearly $7 billion in ETH has been burnt. This continuous burning process will create further deflationary pressure providing fuel to ETH price.

On the other hand, Ethereum (ETH) has been establishing a strong correlation with the S&P 500. On-chain data provider Santiment reported: “Ethereum, not Bitcoin, is the top asset staying tightly correlated to the #SP500‘s performance. And since the #FOMC announcement 3 weeks ago, this has been good news for $ETH. Watch if #fed news causes any downswings for the May #FOMC update”. 

On the other hand, the Ethereum gas fee has turned much more affordable. while the ETH gas fee was above $60 in November 2021, it has now dropped by a staggering 90 percent and is now under $6.0 with much relief to users.

About Author

Bhushan is a FinTech enthusiast and holds a good flair for understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his free time, he reads thriller fictions novels and sometimes explores his culinary skills.

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