Hedge-fund clients at Goldman Sachs are more involved in crypto markets as Bitcoin remains their top investment choice.
As per a Bloomberg report, institutional clients of Goldman Sachs’ Asia Pacific division are displaying revitalized interest in Bitcoin, Ether, and other crypto assets. This trend indicates a notable evolution in the investment landscape for traditional financial institutions.
According to Max Minton, the head of digital assets at Goldman Asia Pacific, a significant number of the firm’s top clients have recently engaged or are considering opportunities in the crypto industry.
Bitcoin Remains the Most Popular
This resurgence in interest follows the approval of spot Bitcoin exchange-traded funds (ETFs), a move that has legitimized crypto assets in the eyes of traditional investors.
Minton highlighted the impact of the approval of ten new Bitcoin ETFs in the United States in January, which he described as a catalyst for the renewed interest and activity among clients. “The recent ETF approval has triggered a resurgence of interest and activities from our clients,” Minton stated.
Goldman Sachs has seen a surge in demand for its derivatives offerings, particularly from hedge funds and other institutional clients. Minton noted that clients primarily use derivatives to gain exposure to crypto volatility and make predictions on price movements in the mid-term.
According to Minton, Bitcoin remains the most popular investment vehicle among active clients. However, there is growing anticipation surrounding the potential approval of a spot Ethereum ETF in the U.S., which could further diversify Goldman’s institutional clients’ portfolios.
It is noteworthy that despite establishing its inaugural crypto trading desk in 2021, Goldman has yet to introduce spot crypto products to its clientele. Instead, the desk exclusively facilitates exposure to crypto derivatives, including assets such as Bitcoin and Ethereum.
Ethereum ETF Approval by May Unlikely, Analysts Warn
However, analysts express caution regarding the probability of an Ethereum ETF approval by May, estimating the likelihood at 35%. Market participants’ optimism has been reduced by the Securities and Exchange Commission’s extended silence on the matter.
Eric Balchunas, an ETF analyst at Bloomberg, acknowledged the diminished probability of an Ether ETF approval but maintained optimism about its eventual introduction, stating, “Note: 35% isn’t 0%, still possible, and long-term we think it will happen,” Balchunas remarked.
Looking ahead, Goldman Sachs aims to expand its client base to include asset management funds, banks, and specialized crypto asset firms. Despite the uncertainty surrounding ETF approvals, the firm remains committed to providing innovative solutions and catering to the evolving needs of institutional investors in the crypto space.