The legalisation of spot Bitcoin BTC $67,443 exchange-traded funds has apparently rekindled the interest of Goldman Sachs clients, who have begun to reenter the cryptocurrency market this year.
TakeAway Points:
- Goldman’s hedge-fund customers become more active in crypto options.
- A significant portion of the surge in interest in cryptocurrencies is due to the US government’s approval of ten new Bitcoin ETFs in January.
- The main purposes of Goldman’s customers’ derivatives were to make weighted mid-term price projections and to get exposure to the volatility of cryptocurrency.
Interest in Crypto Options
As reported by Bloomberg, Max Minton, head of digital assets at Goldman Asia Pacific, stated that a significant number of his company’s biggest clients had recently entered the cryptocurrency space.
“The recent ETF approval has triggered a resurgence of interest and activity from our clients. Many of our largest clients are active or exploring getting active in the space.” Minton said this in an interview.
According to Minton, a significant portion of the surge in interest in cryptocurrencies is due to the US government’s approval of ten new Bitcoin ETFs in January, which solidified the idea that these assets should be included more deeply in traditional markets.
“Our clients are showing renewed interest and activity as a result of the recent adoption of ETFs.”
The majority of new demand for Goldman’s firm’s options and futures offers originates from his current clientele, which is mainly comprised of hedge funds. At the end of 2023, Goldman Sachs reported managing a record $2.8 trillion in assets.
Notably, Goldman created its first crypto trading desk in 2021, but as of right now, it does not provide its clients with any spot crypto products. The desk offers exposure only to cryptocurrency derivatives, such as $3,488 options and futures for EtherTH and Bitcoin.
“It was a quieter year last year, but we’ve seen a pickup in interest from clients in onboarding, pipeline, and volume since the start of the year,” Minton said.
However, Minton highlighted that the main purposes of Goldman’s customers’ derivatives were to make weighted mid-term price projections and to get exposure to the volatility of cryptocurrency. Also, the most well-liked investment vehicles among clients who are actively trading were those tied to bitcoin.
Minton speculated that his company’s institutional clients might start to favour Ether if a spot Ether ETF were to be approved in the US.
Nonetheless, Bloomberg ETF analysts estimate that there is only a 35% probability that an Ether ETF would be approved by May, and they view this as a result of the Securities and Exchange Commission’s protracted “radio silence” towards potential fund issuers.
Furthermore, in the future, Goldman would look to grow into “a wider universe of clients,” which would include asset management companies, banks, and more specialised crypto asset enterprises, regardless of whether an ETF was approved, as per the report.
About Goldman Sachs Group, Inc.
An American international investment bank and financial services provider is called Goldman Sachs Group, Inc. Placed 55th on the Fortune 500 list of the biggest American firms by total revenue, it is the second-largest investment bank globally in terms of revenue. 34th place was held by Goldman Sachs in Forbes Global 2000–2023. The Financial Stability Board classifies it as a systemically important financial institution.
In addition to providing advice on mergers & acquisitions and restructuring, Goldman Sachs provides services in the areas of securities underwriting, prime brokerage, asset management, wealth management, and investment management through Goldman Sachs Personal Financial Management. It offers clearing and custodial bank services in addition to being a market maker for a variety of financial instruments.
