Goldman Sachs Clients in Asia Pacific Hedge Fund Renew Interest in Crypto
In a recent announcement, Goldman Sachs admitted that institutional clients for its Asia Pacific arm are portraying renewed interest and uptake for crypto. The investment bank acknowledged that the hedge fund clients are leaning towards the uptake of Bitcoin and Ether amid the ongoing crypto rally.
The global investment bank doubling in securities and investment management illustrated that the clients are jumping back into digital assets. Goldman Sachs attributes the appetite for crypto to the spot Bitcoin exchange-traded funds (ETFs) approval by the US Securities and Exchange Commission (SEC).
The Goldman Asia Pacific executive for digital assets, Max Minton, indicated that many of the firm’s leading clients are actively engaged in the crypto sector. The admission captured in Bloomberg Sunday, March 24 publication illustrates that others are exploring getting active in the crypto industry.
Goldman Sachs’ Clients Portraying Increased Appetite for Crypto
Minton demonstrated that the increased appetite is fueled by the availability of spot Bitcoin ETFs in the US since their January 10 approval by the Gary Gensler-led Commission. The approval rubber-stamped the crypto assets as an integral component of the traditional markets.
Minton’s confession of a resurgence in the clients’ interest in the crypto sector coincides with other jurisdictions led by Hong Kong exploring the viability of spot crypto ETFs.
Minton indicated that the bulk of the fresh demand for crypto emerges from its existing clients. Such issues arise through Goldman Sachs’ options and future offerings, with the hedge funds overly involved with the clients.
The clients’ crypto uptake occurred when Goldman Sachs realized $2.8 trillion in assets under management (AUM) by the conclusion of 2023. The appetite for the clients creates an exciting twist, given that Goldman has yet to offer spot crypto products to the clients. Nonetheless, Goldman Sachs had in 2021 unveiled the crypto trading desk with a restricted offering to crypto derivatives, primarily Ether and Bitcoin options and futures.
Minton noted that 2023 portrayed a quieter year, with the clients showing little interest in crypto. He attributes the mild involvement in digital assets to the prolonged crypto winter that gripped the sector since 2023.
Minton observed that 2024 has featured a flurry of activity as clients onboard, explore, and increase crypto volume. The clients gradually expand from crypto derivatives to undertake individual crypto tokens and spot crypto ETFs.
Goldman Sachs to Pursue Broad Universe of Clients
Minton confirmed that Golman Sachs’ clients primarily leveraged the derivatives offered to gain exposure to the crypto volatility. Besides, the client made weighted predictions on the mid-term movement of prices.
Minton revealed that Bitcoin-related products were the popular investment vehicles active clients prefer. However, he indicated that could change in the emergence of more rewarding investment options.
Minton examined the potential approval of spot Ether ETF by the US SEC as harboring the potential to shift Goldman Sachs’ institutional clients to embrace Ether. The approval odds are uncertain, with Bloomberg ETF analyst Eric Balchunas pegging the chances at 35% by May this year.
Minton illustrated that regardless of the decision by the SEC, Goldman Sachs will pursue a diverse universe of clients. As such, it targets engaging banks, asset management funds, and specialized service providers in crypto assets.
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