Goldman Sachs Reportedly Exploring Ether Options

Goldman digital assets head said products will be available “in the coming months”

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Mathew McDermott, global head of digital assets, Goldman Sachs; Source: Goldman Sachs

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key takeaways

  • Goldman says it has continued client and institutional interest in the product, and that a market slump is a good time for entry
  • Former CFTC lawyer Braden Perry says unclear guidance from the CFTC might hamper wide availability

Goldman Sachs digital assets head, Mathew McDermott, said in an interview with Bloomberg that the bank is planning on launching an ether futures and options trading platform for clients in the near future. 

The report said that this move is part of the bank’s restart to its crypto services with McDermott at the helm.

McDermott said Goldman is planning on offering exchange-traded notes tracking the price of bitcoin as well as other digital assets derivatives products. Even though the crypto market is in something resembling a bear market, McDermott told Bloomberg that this hasn’t deterred client interest

“We’ve actually seen a lot of interest from clients who are eager to trade as they find these levels as a slightly more palatable entry point,” McDermott told Bloomberg in an interview. “We see it as a cleansing exercise to reduce some of the leverage and the excess in the system, especially from a retail perspective.”

For its part, the Commodity Futures Trading Commission (CFTC) has given the green light to regulated digital assets derivatives trading so far and should in theory have no problem with Ether futures and options as former CFTC chairman Heath Tarbert has said on the record that he believes Ether is a commodity and not a security. 

But former CFTC enforcement attorney Braden Perry, now a partner at Kansas City-based Kennyhertz Perry said that the commission has yet to give clear guidance — calling the CFTC’s regulatory practice a moving target that seems to change with each new technological advance — and is using laws and regulations from yesteryear which might not be compatible in the era of digital assets. 

“These regulations were drafted decades ago and are framed in the so-called ‘traditional’ investing community of high-priced brokers and sophisticated, wealthy investors,” he told Blockworks by email. “The last thing any industry wants is regulation by enforcement, where agencies decide that some practices should have been illegal, and instead of declaring it illegal from now on through rule-making, go back and prosecute the people who were doing it before.”   

Perry believes that the CFTC is moving too slowly and is not allocating a sufficient budget to cover this market. 

“The inherent nature of crypto has presented new problems for regulators, including budgetary challenges. So despite their claim of becoming a leader in the crypto space, there has been a lack of guidance on the issue,” he continued.

Ether is currently trading for approximately $2,500, according to CoinGecko, up 2% on-day.  

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