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Goldman Sachs’ Asia Pacific division is observing a revived inclination towards crypto assets. Specifically Institutional clients.
Goldman Sachs has noticed an increasing interest in cryptocurrency among its clients this year. The approval of Bitcoin exchange-traded funds (ETFs) has been a factor in reigniting their enthusiasm for assets.
Max Minton Shared The Reports
According to Max Minton, Head of Assets for Goldman Asia Pacific, many of the firm’s clients have either started getting involved in the crypto industry or are considering entering it. The approval of ten Bitcoin ETFs in the United States in January sparked renewed interest among their clients.
While Goldman Sachs currently doesn’t provide products, its clients have been interacting with the bank through options and future offerings related to cryptocurrencies. Hedge funds have especially shown interest in this field. As of the end of 2023, Goldman Sachs reported a record-breaking $2.8 trillion in assets under management.
Minton highlighted that clients use derivatives to capitalize on crypto volatility and make informed predictions about price movements. Despite introducing a trading desk in 2021, Goldman Sachs services are limited to derivatives, like Bitcoin and Ether options and futures.
Crypto enthusiasm might have dipped a bit in the year. Minton observed an apparent uptick in new participants, market activity, and trade volume since the start of this year. This trend indicates a rising trust in the potential of cryptocurrencies among sectors.
Not Now, But Soon
Goldman Sachs does not offer any immediate cryptocurrency products to its clients, although it launched their first cryptocurrency trading desk in 2021. Currently, the trading desk only gives exposure to cryptocurrency derivatives, such as Bitcoin and Ethereum.
According to the head of digital assets at Goldman Sachs, Mathew McDermott, client interest in onboarding, pipeline, and volume has increased since the start of the year. McDermott stated that clients primarily use derivatives to gain exposure to the volatility of cryptocurrency and make predictions on where prices are headed in the mid-term.
Clients Show Interest in Bitcoin-related products
Active clients have shown a preference for Bitcoin-related products as the most popular investment vehicle, McDermott added. Furthermore, McDermott mentioned the possibility of an Ether ETF approval in the US, potentially shifting institutional clients towards Ether.
However, according to Bloomberg ETF analysts, the chances of an Ether ETF approval by May are only 35%. The extended lack of response from the Securities and Exchange Commission towards potential fund issuers is viewed as more negative. Regardless of the approval of an ETF, Goldman Sachs plans to widen its client base to include banks, asset management funds, and more specialized firms dealing with crypto assets in the future.
Summary
Goldman Sachs has seen increased client interest in cryptocurrency this year. Many clients are using derivatives to capitalize on crypto’s volatility. Although they introduced a trading desk in 2021, their services are limited to Bitcoin and Ether options and futures.
Disclaimer
The views and opinions stated by the author or any people named in this article are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos, or other related indexes comes with a risk of financial loss.
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
