Galaxy Digital, headquartered in New York, will become a liquidity source for Goldman Sachs’ Bitcoin futures trading desk, which was reopened last month after being put on hold in 2018 owing to regulatory uncertainties. The story was originally reported by CNBC on Friday.
CNBC has learned exclusively that the bank has started trading bitcoin futures with Galaxy Digital, the crypto investment company established by Mike Novogratz. According to Galaxy Digital co-president Damien Vanderwilt, as more banks enable customers to trade bitcoin, the depth, and breadth of the market increase, lowering bitcoin’s notorious volatility.
Goldman’s Entry into Bitcoin Futures
According to CNBC, the bank has started trading bitcoin futures alongside Galaxy Digital, the crypto merchant bank established by Mike Novogratz.
According to Galaxy co-president Damien Vanderwilt, the transactions are the first time Goldman has utilized a digital assets company as a counterparty since the investment bank launched its bitcoin desk last month.
The actions by Goldman Sachs, the world’s largest investment bank, may have repercussions on Wall Street and beyond, as banks increasingly face pressure from customers who seek bitcoin exposure. Goldman is effectively providing other banks permission to begin trading cryptocurrencies by becoming the first big U.S. bank to do so, according to Vanderwilt, a former Goldman partner who joined Galaxy last year.
Nothing, however, prohibits banks from engaging in financial bets based on the price of the underlying coins, which is where Wall Street is beginning its crypto trip. He compared it to the commodities market, where banks exchange exposure to pigs or grain without owning the actual commodity.
What is Galaxy Digital?
Galaxy Digital, whose management team includes ex-Goldman Sachs executives with experience operating regulated firms, presents itself as a link between financial institutions and crypto exchanges. The company, whose stock is traded on the Toronto Stock Exchange, is expected to sell shares in the United States this year.
For diverse financial services and wealth management, Galaxy Digital is a pioneer in the digital asset, cryptocurrency, and blockchain application industries.
Galaxy Digital, the crypto merchant bank led by renowned crypto enthusiast Mike Novogratz, reported net revenue of $44.3 million in the third quarter of 2020, compared to a loss of $68.2 million the previous year.
Michael Edward Novogratz is a former hedge fund manager of Fortress Investment Group. One of the few cryptocurrency businesses anticipated to submit financial statements is Galaxy Digital Holdings Ltd. The firm lost $136 million in bitcoin trading in the first nine months of 2018.