Goldman Sachs forecasts a significant growth of the cryptocurrency market in 2024 as traditional institutions begin to adopt and regulate blockchain technology. According to the bank’s head of digital assets, Matthew McDermott, companies have begun to recognize the efficiency of blockchain technology, and are now scaling their operations to fully utilize the commercial potential of digital assets, with the market expected to see a Bitcoin exchange-traded fund (ETF) soon.

McDermott further elaborates that the true benefits of blockchain technology for businesses are realized with large scale usage. This growing interest from traditional banking institutions, he adds, will improve liquidity in markets dealing with tokenized assets.

Assessing the future trajectory of digital assets, McDermott says, “When you consider the amount of untapped potential in outdated systems, you can understand the opportunity blockchain technology presents for the future. But this isn’t a future prospect only – the benefits are visible today.” He predicts traditional assets will be tokenized before their less common counterparts, boosting liquidity, transparency, and pricing visibility in the process.

In relation to Bitcoin ETFs, McDermott believes that their approval will attract investment from pension funds and insurers, thereby enhancing Bitcoin’s overall liquidity. However, he does not think Bitcoin ETFs will experience immediate growth post-approval, rather they will gradually gain traction throughout the year.

With a deadline for amending S-1 filings with the US Securities and Exchange Commission (SEC) by Dec. 29, 2023, Bloomberg ETF analyst, Eric Balchunas, predicts many firms will only list authorized institutions that can create and redeem ETF shares as the deadline approaches.