In a move which could well set the roadmap of the capital-heavy financial institutions in the United States to enter the ‘hot’ cryptocurrency market, Goldman Sachs announced a unique product to match the needs of their demanding clients called the Non-Derivative Funds (NDF). However, there is industry-wide speculation that there is actually no client-side demand for such products and is only a strategy which the big bank is exploring to get a major foot into the industry-driving bitcoin-based market systems.
The speculation that there is no client-cry for these instruments appears to be triggered from latest statements by Asset Management guru, Larry Fink, the CEO of the $6 trillion BlackRock Fund. The industry leader had stated that there had been no such inquiries, even “zero inquiries” coming for bitcoin products from customers.
Fink is believed to have said in July last that,
“I don’t believe any client has sought out crypto exposure. I’ve not heard from one client who says; I need to be in this.’”
The most attractive feature of this fresh move by the latest bank is that the NDF would be based on Bitcoin. There is no possibility of an Ether-based similar contract either, according to industry insiders refuting speculation that the Ether, the second largest coin was also being considered by the bank.
The other view of analysts is that Goldman Sachs is attempting to ride the crypto craze and is pushing forward with a focused agenda to create and pump for a market which would eventually allow it
Meanwhile, Goldman Sachs offer has been tailored to ensure the customer is placed at minimum risk. Therefore, the product will be a short-term position product which will be based on Bitcoin. The easy method out is that investors can use the foreign currency of their choice to buy bitcoin, but the profit or loss has to be monetized via bitcoin. The use of foreign currencies is expected to allow these banking institutions to gain backdoor entry into these markets. the method to use specific to bitcoin is that the dollar is not used in these transactions, but it is the bitcoin.
Additionally, there has been speculation that the bank may consider the use of Ether, the all promising coin which is expected to catch the fancy of every investor. The coins low pricing is attractive enough, and the technology platform is also highly appreciated.
However, the latest industry news spools indicate Ether is not in the consideration at all for an NDF, but only the holy grail of the cryptoworld – ‘bitcoin.’
Hence, the offer by the big players to introduce coin-based NDF is not only interesting and offering bigger opportunities for investors but also building the necessary ecosystem for such adaption by worldwide investors.
The bank’s role is to ensure that their customer gains an exposure to these instruments using minimum risks.