Goldman Sachs Named the Next Big Thing for the Crypto Market

Andrey Kazantsev, the director of Goldman Sachs’ cryptocurrency division, predicts that as more conventional financial institutions begin to dabble in cryptocurrencies, more liquid options markets will emerge. As part of a panel discussion with Kazantsev, CoinDesk discussed his forecasts.

A large surge in demand for risk insurance via derivatives – options, according to him – is now being seen by the company. Currently, Skew, a Coinbase subsidiary that gathers market data, believes that there is around $12 billion worth of open interest in bitcoin options at any one time. Throughout the first half of 2020, the market’s worth seldom surpassed $2 billion in total value.

In order to hedge their existing risks or to take on more market risk in exchange for higher-priced transactions, Bitcoin options are employed by investors. Moreover, the investment bank thinks that the introduction of more liquid digital asset choices would encourage more institutional-level participants to enter the sector of digital asset trading.

“Corporations would like to hedge over the long term rather than resetting their portfolios on a regular basis, and they are well aware of the dangers involved with such a course of action. According to the authors, there are more flexible approaches to hedge some risks utilizing options than there are with futures alone” – Kazantsev continued by saying more.