Goldman Sachs has become the first U.S. bank to conduct an over-the-counter (OTC) Bitcoin transaction.
The OTC trade of a Bitcoin-linked instrument called a non-deliverable option (NDO) is facilitated by the bank’s BTC futures desk and its partner, Galaxy Digital, a New York-based cryptocurrency investment firm. Independent analyst Willy Woo has said that institutional trading in BTC futures has put downward price pressure on BTC.
The OTC Bitcoin NDO deal essentially means that the Wall Street bank has purchased a contract betting on the future price of the premier cryptocurrency rather than actually buying the digital asset itself. It’s an indirect way of gaining exposure to Bitcoin without holding it, saving the bank from regulatory and reporting obligations.
Goldman first announced its plan to open a crypto trading desk back in 2018 but later dropped the idea due to the poor performance of the crypto market. However, the remarkable run of Bitcoin and the broader crypto industry since then has reignited interest in the initiative.
In March 2022, DeFiance Capital founder Arthur Cheong, known as Arthur_0x, lost more than $1.6 million in NFTs and cryptocurrency due to a hack of one of his hot wallets.
Cheong was unable to determine how he had been hacked. The theft included 78 unique NFTs, 68 wrapped Ether (wETH), 1,578 LooksRare (LOOKS) tokens, and 4,349 staked DYDX. Many popular platforms have come to his aid by blacklisting the hacker’s wallet.
Ethereum, the second-biggest crypto network by market cap, has destroyed more than 2 million ETH tokens worth nearly $6 billion since implementing EIP-1559 in August 2021, reports WatchtheBurn, a platform that keeps track of destroyed coins.
EIP-1559 is a protocol enhancement implemented in Ethereum’s London hard fork update. The new protocol was introduced to make significant changes to Ethereum’s fee structure. It burns a portion of the fees generated during a network transaction. This burning of cryptocurrencies puts deflationary pressure on the remaining coins by steadily reducing the supply.
Ethereum co-founder Joe Lubin said he believed the next update called “Consensus Layer” to be even more revolutionary. The upgrade, which is expected to be completed in August, will transform the Ethereum blockchain from the energy intensive proof-of-work consensus mechanism to the more efficient proof of stake. It is hoped that it will also slow down the issuance of new ether into the market.