Goldman Sachs' Asia-Pacific institutional clients are seeing a resurgence of interest in Bitcoin, Ether and other crypto assets, Bloomberg reports. This trend represents a significant evolution in the investment environment for traditional financial institutions.
Max Minton, head of digital assets at Goldman Asia Pacific, says a significant number of his firm's top clients have recently become involved in or are considering opportunities in the cryptocurrency space.
Bitcoin remains the most popular
This resurgence of interest follows the approval of the Spot Bitcoin Exchange Traded Fund (ETF), a move that legitimizes the crypto asset in the eyes of traditional investors.
Minton highlighted the impact of the approval of 10 new Bitcoin ETFs in the US in January, explaining that this triggered renewed interest and activity among clients. “Recent ETF approvals have seen renewed interest and activity among our clients,” Minton said.
Goldman Sachs has seen a surge in demand for its derivatives products, particularly from hedge funds and other institutional clients. Minton noted that clients are primarily exposed to the volatility of cryptocurrencies and use derivatives to predict medium-term price movements.
Minton said Bitcoin remains the most popular investment vehicle among active clients. But expectations are rising over the potential approval of a Spot Ethereum ETF in the U.S., which could further diversify Goldman's institutional client portfolios.
Notably, despite establishing its first crypto trading desk in 2021, Goldman has yet to introduce spot crypto products to clients. Instead, the desk exclusively facilitates exposure to crypto derivatives, including assets such as Bitcoin and Ethereum.
Analysts warn that Ethereum ETF approval is unlikely
However, analysts are cautious about the chances of an Ethereum ETF being approved by May, estimating the chance to be 35%. The Securities and Exchange Commission's extended silence on the issue has dampened optimism among market participants.
Bloomberg ETF analyst Eric Balciunas acknowledged that the chances of an Ether ETF being approved have diminished, but remained optimistic about its eventual implementation, saying, “Note: 35 % is not 0%, it's still a possibility, and I think it will happen in the long run.” It’s going to happen,” Balciunas said.
In the future, Goldman Sachs aims to expand its customer base to include asset management funds, banks, and crypto asset specialist firms. Despite the uncertainty surrounding ETF approval, the company remains committed to providing innovative solutions and meeting the evolving needs of institutional investors in the crypto space.
