Goldman Sachs has observed a resurgence in client interest towards cryptocurrency investments in 2023, driven by the approval of new Bitcoin exchange-traded funds (ETFs). Max Minton, the head of digital assets for Goldman Sachs Asia Pacific, indicates that key clients are reactivating or considering engagement in the crypto market. This trend is partly attributed to the recent acceptance of ten Bitcoin ETF applications in the U.S. in January, integrating cryptocurrency more closely with traditional financial markets.
Surge in Client Activity and Asset Management
The firm has witnessed a notable uptake in demand for cryptocurrencies, primarily through options and futures offerings, with hedge funds standing out as the main investors. Despite a quieter year in 2021, Goldman Sachs has reported a significant increase in client activity and interest since the beginning of the year, with a recorded $2.8 trillion in assets under management by the end of 2023. Their services are currently limited to crypto derivatives, not including spot crypto products.
Goldman’s Strategy and Market Predictions
Minton explains that Goldman’s clients are leveraging derivatives to capitalize on crypto volatility and make strategic price predictions for the medium term, with Bitcoin-related products being highly favored. The firm is also closely monitoring the potential for a U.S. Ethereum ETF approval, which could further sway institutional clients towards Ethereum. However, the approval odds are considered low by Bloomberg ETF analysts, due to a lack of regulatory feedback.
Goldman Sachs is planning to expand its client base in the future to include asset management funds, banks, and specialized crypto firms, irrespective of the outcome regarding the ETF approvals. This expansion is part of their broader strategy to embrace the growing interest in cryptocurrency from a diverse range of investors.