The crypto market is abuzz with anticipation as influential figures continue to provide insights. Goldman Sachs’ Head of Crypto Assets, Mathew McDermott, predicts that the approval of spot Bitcoin and Ethereum exchange-traded funds (ETFs) will boost institutional interest in the crypto market. He believes these ETFs will expand and deepen market liquidity by creating institutional products that can be traded without the need for entities to directly engage with the underlying assets, potentially opening the market to pension funds and insurers.
Despite the potential for ETF approvals, McDermott does not expect an immediate transformation but foresees a gradual change in the crypto sector over the next year if the U.S. Securities and Exchange Commission (SEC) grants approval. Over a dozen firms, including financial giants BlackRock and Fidelity, have applied to provide spot Bitcoin ETF services and are awaiting the SEC’s green light. There is growing optimism in the market that the regulatory body will finally approve ETF funds that invest directly in Bitcoin.
McDermott also highlights the blockchain sector’s increasing financial applications and the traditional financial institutions’ growing involvement over the past 12 to 18 months. He anticipates growth in the crypto market next year, particularly in the area of tokenization, expecting a surge in scale adoption on the buying side as secondary liquidity emerges within the ecosystem.
Earlier this year, Goldman Sachs launched its tokenization platform, GS DAP, which operates on a private blockchain network. Hong Kong utilized this platform to sell $102 million worth of tokenized bonds, reducing the payment period from five days to just one. McDermott has suggested that GS DAP could also be used for other assets, including alternatives, fund units, futures, and private equity.
Goldman’s crypto asset team, which consisted of only four members when McDermott took charge in 2020, has grown to 70 members at the beginning of this year. McDermott has expressed openness to further expansion of the team when appropriate.