Goldman Sachs and Ethereum Are Teaming Up to Launch an ETH NDF
A new report online suggests that Goldman Sachs is teaming up with Ethereum to launch a Non-Deliverable Forward (NDF) investment product based on ETH futures.
The report comes from TheICOJournal, which has developed a habit for writing inventive stories filled with unnamed sources. If you take the report at face value, however, then it seems that “several sources” have confirmed the news that Ethereum and Goldman Sachs are teaming up to launch an NDF.
A non-deliverable forward is an outright forward or futures contract where counterparties settle the difference between the contracted NDF price or rate and the prevailing spot price or rate on an agreed notional amount. It’s used in various markets, including foreign exchange and commodities markets.
The ICO Journal claims that Goldman Sachs is already offering a bitcoin NDF to clients. As far as we can tell, that’s not public knowledge, and there’s no evidence of Goldman Sachs offering a bitcoin NDF or any bitcoin investment product to clients. We’ve heard rumors that Goldman Sachs is working on a crypto trading desk and certain crypto investment products, but they have not publicly released a crypto-related product or platform as of September 2018.
Nevertheless, The ICO Journal insists, based on its mysterious sources, that Goldman Sachs and the Ethereum Foundation are teaming up to launch a non-deliverable forward product based on ETH futures.
The ICO Journal cites three inside sources as proof that Goldman Sachs and the Ethereum Foundation are teaming up to launch an ETH NDF.
Here’s what the first source said:
“Goldman has been known to push the envelope and develop products that benefit both the firm and their clients. In this case that is clear. Very clear. The clamoring for crypto assets amongst the UHNW class of investors is loud and continual, causing Goldman to respond. They’ve been quietly assuring subsets of clients that an Ethereum NDF is on tap no later than early in 2019. The purpose of announcing timing to certain clients is to cause them to ‘hold their powder’ with respect to crypto asset allocations so as to make sure they come to Goldman. The team working crypto at Goldman has been charged with controlling as much of their client bases crypto dollars as possible – with an emphasis on custody and regulatory safety. That is the message.”
The second source cited in the report claims that Goldman Sachs isn’t even looking at other crypto NDFs: they’re exclusively looking to launch an ETH NDF. Goldman Sachs does not want to launch a bitcoin NDF or an NDF for any other cryptocurrency.
Here’s what the second source had to say on that topic:
“In terms of what products could possibly be on tap – I wouldn’t call it products, as in plural. Your focus should be on Ethereum. It is the only other cryptocurrency that has been dubbed a commodity, thus making it a natural choice for us (Goldman). And the focus is an NDF designation. That covers the bases from a regulatory standpoint and gives clients that access they want. Expect an early 2019 release.”
Finally, The ICO Journal cites a third source. They claim this third source is an employee at Goldman Sachs who has access to insider trading knowledge. That source claims that an Ethereum NDF “will happen” and that it’s not a question of if but when.
“Clients believe that Bitcoin and Ethereum, on balance, are the investable digital assets and have been asking about solutions since late 2017. Obvious reasons why that would be the case. The noise around Ethereum has only increased as the price has pushed lower. Clients look at these assets like internet names after the dot-com crash. We are simply filling a need based on significant client requests. I will add, I doubt that we include any other cryptos for a significant amount of time once Ethereum is added. Hard to make that case that any other asset holds intrinsic value.”
As we’ve said before, we’re growing increasingly skeptical of The ICO Journal and its sources. The online publication claims to have dozens of sources at major banks, financial institutions, regulatory institutions, and governmental organizations. The website always seems to have the perfect source available at the perfect time. All sources cited by The ICO Journal also seem to write in an identical way with similar grammar and punctuation. Take anything you read on The ICO Journal with a huge grain of salt.
Is Goldman Sachs Preparing to Release a Crypto Investment Product?
Goldman Sachs has been making headlines across the crypto community for the past six months. Earlier this year, it was reported that Goldman Sachs was developing its own crypto trading desk.
Then, earlier this month, crypto markets were shook when it was revealed that Goldman Sachs had ended its crypto trading desk development. Those reports later turned out to be a hoax, and it was later revealed that Goldman Sachs was continuing to actively develop crypto products.
To this day, it’s not totally clear what type of crypto products Goldman Sachs is making. The ICO Journal claims that Goldman Sachs is preparing to release either a bitcoin non-deliverable forward (NDF) investment product or an Ethereum NDF. This latest report claims that an Ethereum NDF is inevitable. We’ll have to wait until early 2019, however, to see if The ICO Journal’s report is true.