Goldman Sachs Evolution: In 2020, it declared Bitcoin as a non-asset class, and today announced the launch of Non-Deliverable Forwards (NDF) contracts.

Wall Street investment bank Goldman Sachs has been actively expanding its presence in the cryptocurrency field this year. In addition to submitting documents to the SEC in March to apply for an ETF linked to Bitcoin, there are also reports that they will relaunch Bitcoin futures. Today, on 5/7, it was revealed that Goldman Sachs will launch Bitcoin non-deliverable forward (NDF) trading.

Bitcoin Non-Delivery Forward Trading

Non-Delivery Forward, NDF, refers to an agreement where both parties do not need to deliver the principal amount. Instead, they settle the difference between the "NDF rate" and the "spot rate" at the contract's expiration based on the agreed-upon principal.

According to a report by Bloomberg, Goldman Sachs' NDF contract products will be settled in cash and have chosen the crypto trading firm Cumberland DRW as a strategic partner. Justin Chow, Global Business Development Lead at Cumberland DRW, stated:

"This year, we have seen increasing interest and accelerated adoption of crypto technology by more traditional financial companies. Goldman Sachs' entry represents another sign of maturity in the crypto space."

Max Minton, Head of Digital Assets for Asia Pacific at Goldman Sachs, also noted:

"Institutions' demand in the crypto space continues to grow significantly. This new product has driven Goldman Sachs' development of related products such as cash-settled instruments."

Goldman Sachs Investment Group

Reported in early March, Goldman Sachs is said to be involved in digital asset-related businesses, including:

• Stablecoins pegged to the US dollar or other fiat currencies
• Bitcoin ETFs
• Bitcoin futures
• Digital asset custodianship
• Bitcoin Non-Delivery Forward Trading (NDF)

As of now, the NDF has been realized, and in March, Goldman Sachs submitted documents to the SEC to apply for ETF-linked notes that will track the "ARK Innovation ETF" fund under Ark Investment Management. In April, they announced plans to offer Bitcoin-related products to high net worth clients, likely referring to the newly introduced Bitcoin NDF.

In a shareholder call held in May last year, Goldman Sachs criticized Bitcoin, stating that it did not even qualify as an asset class and deeming it as a commodity dependent on someone willing to pay a higher price, which was not suitable for Goldman's clients. However, they have now taken a different approach by actively engaging in the cryptocurrency space.