The Bitcoin (BTC) trade executed by Goldman is a non-deliverable option (NDO), also known as a cash-settled option. This means that when the. Balaji Srinivasan, CEO of 21 Inc., and board partner at Andreessen Horowitz, along with Jerry Brito, executive director of Coin Center, which focuses on. Goldman's Bullish Dollar Forecast Could Spell More Bad News for Bitcoin. The cryptocurrency has fallen as the U.S. dollar index has gone up. By. COMMUNICATION MAKES A BETTER PLACE TO WORK
However, the problem of how to regulate such a system will be a big stumbling block, according to Monaghan. Policymakers around the world are scrambling to fill the crypto market regulatory vacuum, and regulatory risk may well be the barrier to entry for any meaningful participation of institutional investors in the crypto industry.
Regulatory clarity is critical for building a business, according to Caroline Malcolm, head of international policy at crypto consultancy Chainalysis. It is important to note that the loan deal between Goldman and Coinbase is structured so that the Bitcoin collateral is held by a third party, according to reports.
This means in the case of a default on the loan, Goldman would not have any direct dealings with the Bitcoin collateral and therefore carry no regulatory risk. Given its unique structure and hour risk management, the loan is of particular interest to the banking giant. These loans can be riskier than regular asset-backed loans, given Bitcoin's volatility. If the BTC price drops too low, the borrower may have to increase the collateral to avoid getting liquidated. Last month, Cowen launched its own digital assets unit.
BlackRock is also readying itself to launch its blockchain-focused ETF. Crypto-backed loans have already become ubiquitous in DeFi, but traditional institutions see crypto-backed loans as an alternative method to access increased capital. The writer is the founder at yMedia.
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