Founded by Mike Novogratz, Galaxy Digital, will serve as Goldman Sachs' liquidity provider for bitcoin (EXANTE: Bitcoin) futures block trades on CME. According to a press release, Galaxy Digital will offer the bank access to deep and diverse liquidity on a principal basis of cryptocurrency exchanges and over-the-counter (OTC) markets.
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Damien Vanderwilt, Co-President and Head of Global Markets at Galaxy Digital, says that Goldman's choice confirms its institutional expertise.
"We are proud to be a strategic partner of Goldman and look forward to working with Max and his team to meet the increasing demand from institutions and pave the way to broader adoption of cryptocurrencies as an asset class," Vanderwilt added.
The partnership with Galaxy as a liquidity provider comes despite Goldman's skepticism regarding bitcoins long-term value. According to the bank's analysts, the argument that bitcoin and cryptocurrencies are a digital version of gold does not confer any value to bitcoin and other cryptocurrencies, because gold itself is not a consistent or reliable store of value.
However, earlier in May, Goldman Sachs expanded its cryptocurrency offering with trading of non-deliverable forwards, a derivative that is pegged to the bitcoin (EXANTE: Bitcoin) price and paid out in cash. As said Max Minton, Head of Digital Assets in Asia-Pacific at Goldman Sachs, says institutional demand for cryptocurrencies continues to grow "significantly."
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