Key Takeaways:
- Goldman Sachs Asia Pacific reports a resurgence in institutional interest in cryptocurrencies, notably Bitcoin and Ether, driven by the approval of new Bitcoin ETFs.
- The interest is primarily through derivatives offerings, with hedge funds being notably active, despite Goldman not offering direct cryptocurrency investments.
- Max Minton anticipates further institutional movement towards Ether, especially if an Ether ETF gets approved in the U.S., despite current regulatory uncertainties.
Goldman Sachs’ Asia Pacific branch is witnessing a strong resurgence in interest towards Bitcoin, Ether, and other cryptocurrencies among its institutional clients.
Clients of Goldman Sachs are demonstrating a keen resurgence in their engagement with cryptocurrencies this year, driven by enthusiasm for newly approved Bitcoin exchange-traded funds (ETFs).
Goldman Sachs says clients such as hedge funds are showing renewed interest in crypto options trading this year amid the digital-asset market boom https://t.co/l13a8kGa8i
— Bloomberg (@business) March 24, 2024
Max Minton, who leads Goldman Asia Pacific’s digital assets division, reported a significant uptick in activity among some of the firm’s largest clients, either re-engaging with or considering entry into the crypto market.
This interest was notably sparked by the U.S. greenlighting ten new Bitcoin ETFs in January, marking a milestone in integrating digital assets with traditional financial systems.
“The recent ETF approval has triggered a resurgence of interest and activities from our clients.” Minton commented, highlighting the pivotal role of these approvals in attracting investment.
He observed that a majority of this newfound interest is from longstanding clients through Goldman’s derivatives offerings, with hedge funds being particularly active participants.
Despite its pioneering move in establishing a cryptocurrency trading desk in 2021, Goldman Sachs currently doesn’t offer direct cryptocurrency investments but rather focuses on providing access to crypto derivatives, such as Bitcoin and Ether options and futures.
According to Minton, there was a dip in crypto-related activities last year, but the commencement of 2024 has seen a revival in client onboarding, investment pipeline, and transaction volumes.
He pointed out that Goldman’s clientele mainly utilizes derivatives to navigate the volatility of the crypto market and to speculate on future price movements.
Bitcoin remains the dominant focus among Goldman’s actively investing clients, Minton noted, also expressing anticipation for the potential impact of an Ether ETF’s approval in the U.S. on shifting institutional interest towards Ether.
However, Bloomberg ETF analysts estimate only a 35% chance of an Ether ETF passing by May, with the SEC’s extended lack of communication with prospective fund creators casting a shadow over the prospects.
Yeah our odds of eth ETF approval by May deadline are down to 35%. I get all the reasons they SHOULD approve it (and we personally believe they should) but all the signs/sources that were making us bullish 2.5mo out for btc spot are not there this time. Note: 35% isn’t 0%, still… https://t.co/QWQOGZjDC5
— Eric Balchunas (@EricBalchunas) March 11, 2024
Minton concluded by stating Goldman’s ambition to broaden its client base to include asset managers, banks, and specialized crypto firms, irrespective of the immediate future of ETF approvals.
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