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Haider Jamal

Mar 25, 2024

Goldman Sachs Clients Look To Get Back Into Crypto This Year

Institutional clients served by the Goldman Sachs Asia Pacific division are demonstrating renewed interest in Bitcoin, Ether, and other cryptocurrency assets. Goldman Sachs clients in Asia Pacific have reportedly reengaged with cryptocurrencies this year, spurred by the endorsement of spot Bitcoin exchange-traded funds.

According to a report on March 24th, Max Minton, the head of digital assets for Goldman Asia Pacific, mentioned that several major clients have recently become active in or are considering involvement in the crypto sector. Minton attributed much of this revived interest to the approval of ten new Bitcoin ETFs in the United States in January, which solidified cryptocurrency assets as a more integrated aspect of traditional markets.

 

A Resurgence

Minton claimed that the recent ETF approval has prompted a resurgence of interest and activities. The majority of the increased demand primarily originates via pre-existing clients utilizing the options and futures offerings of the firm, with hedge funds being the most engaged among them. Goldman Sachs recorded a record $2.8 trillion in assets under management by the end of 2023.

It is also noteworthy that currently, Goldman does not provide any spot crypto products to its clients, despite launching its initial crypto trading desk in 2021. The desk solely deals with exposure to crypto derivatives, such as Bitcoin and Ether options and futures. Minton remarked that it was indeed a quieter year last year, but that there has been a sudden surge in interest by clients in onboarding, pipeline, and volume since the start of 2024.

 

Ethereum Could Be Next

The aforementioned clients primarily utilize derivatives to gain exposure to crypto volatility and to make weighted predictions on mid-term price movements. Bitcoin-related products remain the most favored investment instruments among active clients. Once again, Minton discussed the potential approval of a spot Ether ETF in the United States, which could potentially shift institutional clients towards Ethereum.

However, various ETF analysts have assessed the likelihood of an Ether ETF approval by May at just 35%, with the United States Securities and Exchange Commission choosing to extend their radio silence towards potential fund issuers. Unsurprisingly then, this attitude by the agency is being frowned upon and many are becoming increasingly pessimistic.

Irrespective of an ETF approval, Minton indicated that Goldman aims to expand into a broader universe of clients, including asset management funds, banks, and more specialized crypto asset firms in the future.

 

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