One Wall Street titan just opened the crypto floodgates

In a single, history-making move, one Wall Street behemoth has opened the floodgates for billions in capital to flow into crypto.

Goldman Sachs (GS) just completed an over-the-counter (OTC) crypto transaction—in the form of a Bitcoin non-deliverable option (NDO). 

One of our Crypto Intelligence holdings, Galaxy Digital (BRPHF), provides financial solutions across the crypto ecosystem. It facilitated and executed the trade with Goldman. (Galaxy Digital founder and CEO Mike Novogratz is a former Goldman partner.) 

The Bitcoin NDO trade marks the first of its kind for any major Wall Street bank—and indicates Wall Street is starting to get on board with crypto.

An NDO is a transaction that settles in cash at the option contract’s maturity—instead of settling in the underlying asset (in this case, Bitcoin).

Meanwhile, the OTC market—also called the microcap market—hosts companies with smaller assets and low stock prices. It’s regulated by the Securities & Exchange Commission (SEC), but it has fewer requirements than major exchanges, like the New York Stock Exchange (NYSE).

In contrast to stocks on the major exchanges, companies that trade on the OTC market don’t have to apply for a listing or achieve any minimum financial requirements. In short, it’s riskier to invest OTC… and harder to find public information on the companies. Goldman’s willingness to take on this transaction shows its conviction in the trade.

Damien Vanderwilt, co-president and head of global markets at Galaxy Digital, explained: “We are pleased to continue to strengthen our relationship with Goldman, and expect the transaction to open the door for other banks considering OTC as a conduit for trading digital assets.”

Wall Street is a competitive and ruthless environment… So it’s not a stretch that other banks and competitors—such as JPMorgan, Bank of America, and others—will follow suit.

In other words, we could soon see billions of institutional dollars move into crypto.

And there are more signs that individual investors are ready to move off the sidelines…

BNY Mellon Wealth Management conducted a survey across 200 participants, including over 50 single-family offices and over 140 multi-family offices. These are offices managing over $150 million each.

Over 75% of family offices are interested in or already involved in crypto. And over 60% of those already involved plan to increase their exposure.

Individual investors can participate in a number of ways—including through the assets mentioned above: Goldman Sachs (GS), Galaxy Digital (BRPHF), and Bitcoin.

Note: I personally own shares of Galaxy Digital (BRPHF) and Bitcoin (BTC).

Daniel Creech is a Curzio Research analyst with over a decade of experience. He writes on macro trends, large- and small-cap stocks, and digital securities. He’s a regular contributor to Wall Street Unplugged, Curzio Crypto, Curzio Research Advisory, and The Dollar Stock Club.