Goldman Sachs Clients Return to Crypto Amidst Bitcoin Surge

March 25, 2024

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The hedge fund clients of Goldman Sachs are rekindling their interest in cryptocurrencies, propelled by the recent wave of approvals for spot Bitcoin exchange-traded funds (ETFs) and the surge in the price of the leading digital asset.

Max Minton, head of digital assets for Goldman Asia Pacific, revealed that many of the firm’s largest clients have either become active in or are exploring involvement in the crypto sector.

Further, the approval of ten new Bitcoin ETFs in the United States in January has catalyzed this resurgence, affirming crypto assets as an integral part of traditional markets.

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Goldman Sachs Sees a Growing Interest in Crypto

“The recent ETF approval has triggered a resurgence of interest and activities from our clients,” Minton stated.

He attributed the surge in demand primarily to existing Goldman Sachs clients, particularly hedge funds, leveraging the firm’s options and futures offerings.

Despite reporting a record $2.8 trillion in assets under management at the end of 2023, Goldman Sachs currently doesn’t offer spot crypto products to its clients, focusing solely on crypto derivatives through its trading desk launched in 2021.

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Leveraging Crypto Derivatives

Minton highlighted the growing interest among clients in leveraging crypto derivatives to navigate the market’s volatility and make weighted price predictions.

“It was a quieter year last year, but we’ve seen a pickup in interest from clients in onboarding, pipeline, and volume since the start of the year,” Minton said.

Bitcoin-related products emerged as the preferred investment choice among active clients, indicating a sustained appetite for exposure to the pioneering cryptocurrency.

Goldman Sachs Anticipates a Potential Shift to ETH

Looking ahead, Minton anticipates a potential shift towards Ether among Goldman Sachs’ institutional clients, particularly if a spot Ether ETF receives approval in the US.

However, analysts remain cautious about the likelihood of an Ether ETF approval, citing the Securities and Exchange Commission’s prolonged silence on the matter.

Expansion in the Digital Asset Sector

Despite this uncertainty, Minton affirmed Goldman’s commitment to expanding its client base, aiming to cater to a broader spectrum of investors, including asset management funds, banks, and specialized crypto asset firms.

Goldman Sachs’ clients are embracing cryptocurrencies anew, buoyed by the endorsement of Bitcoin ETFs and the promise of broader market integration.

While uncertainties persist regarding the approval of an Ether ETF, Goldman remains poised to capitalize on evolving client demands and expand its foothold in the burgeoning crypto landscape.

Goldman Sachs also seeks expansion in the digital asset sector and is reportedly exploring opportunities in the crypto bankruptcy claims market.