Goldman Sachs predicts the next big event for the crypto market

The U.S. investment bank believes that the emergence of more liquid options will attract more institutional-level players to the field of digital assets

The U.S. investment bank believes that the emergence of more liquid options will attract more institutional-level players to the field of digital assets

The next big thing for the crypto market will be the emergence of more liquid options, according to investment bank Goldman Sachs. Andrey Kazantsev, global head of cryptocurrency trading, explained during a panel discussion hosted by CoinDesk that the company is seeing strong demand for hedging with derivatives.

“The next big step we foresee is the development of options markets”, Kazantsev said.

He believes cryptocurrency derivatives are in their “infancy” compared to more traditional markets such as stocks or foreign exchange. That said, interest in bitcoin options has been growing strongly in recent years.

Open interest in options stands at $12 billion, according to the latest data from analyst firm Skew. In the first half of 2020, that value was barely more than $2 billion.

“There are more versatile ways to hedge risk with options than with futures alone”, Kazantsev explained.

Over the summer, Goldman Sachs partnered with Galaxy Digital to trade bitcoin futures more actively. This was the first time Goldman Sachs used the services of a counterparty to work with cryptocurrency.

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