Goldman Sachs has noticed a revival in client enthusiasm for investing in cryptocurrencies during 2023, driven by the green light given to new Bitcoin exchange-traded funds (ETFs). Max Minton, who leads digital assets at Goldman Sachs Asia Pacific, has pointed out that important clients are either returning to or contemplating involvement in the crypto market. This shift is partly linked to the recent approval of ten Bitcoin ETF applications in the U.S. in January, which has brought cryptocurrency closer to traditional financial markets.

Increased Client Engagement and Asset Management

The company has experienced a significant increase in demand for cryptocurrencies, particularly through options and futures offerings, with hedge funds emerging as the primary investors. Despite a relatively subdued 2021, Goldman Sachs has seen a notable rise in client activity and interest since the start of the year, culminating in $2.8 trillion in assets under management by the close of 2023. Presently, their offerings are focused on crypto derivatives, excluding spot crypto products.

Goldman’s Approach and Market Projections

Minton elaborates that Goldman’s clients are using derivatives to leverage crypto market volatility and make informed price forecasts for the medium term, with a preference for Bitcoin-related products. The company is also keeping a close eye on the possibility of a U.S.

Ethereum ETF approval, which could sway institutional clients towards Ethereum. However, Bloomberg ETF analysts view the chances of approval as slim due to a lack of regulatory feedback.

Goldman Sachs intends to broaden its client base in the future to encompass asset management funds, banks, and specialized crypto firms, regardless of the outcome of ETF approvals. This expansion forms part of their overarching strategy to embrace the increasing interest in cryptocurrency from a diverse array of investors.