Goldman Sachs is offering bitcoin derivatives to investors as it expands its offerings in the $1 trillion market

• Goldman Sachs on Thursday has started trading with non-deliverable forwards, $4 reported.
• An NDF will essentially allow investors to speculate on bitcoin's future price
• The bank will be hedging with CME futures.

Goldman Sachs on Thursday began trading non-deliverable forwards, a derivative product tied to $4's price, $4 reported.

An NDF essentially allows investors to speculate on bitcoin's future price. It is settled with cash and is usually a short-term, forward contract.

Goldman can protect its clients from the volatility of bitcoin's price by buying and selling bitcoin futures in block trades on CME Group, using Cumberland DRW as its trading partner, $4 reported.

The bank first announced its intention of dealing with $4

Goldman also in the same month $4 amid a booming cryptocurrency market. It first set up a cryptocurrency desk in 2018.

Bitcoin, since its inception in 2009, has long been shunned by Wall Street firms until recently.

In March, Morgan Stanley became the first major American bank to $4, allowing clients ownership of the cryptocurrency.

JPMorgan followed in April when it announced that its plans to offer $4 to wealth clients for the first time.

Banks are still moving cautiously when it comes to holding bitcoin outright due to regulatory intricacies. This is why some have resorted to derivatives.

Bitcoin has seen a 91% gain year-to-date. It briefly $4 ahead of cryptocurrency exchange Coinbase's direct listing, then plummeted by around 36% to $47,000 around 10 days later.

It is trading lower by 1.07% to $55,905 as of 4:15 p.m. ET.