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Goldman Sachs Sees More Institutions Diving Into Crypto — Says Bitcoin ETFs Prompt A ‘Psychological Shift’ - CRYPTOS BRIEFING

MARCH 20, 2024

Goldman Sachs is seeing more institutions diving into crypto, the global investment bank’s head of digital assets has revealed, noting that until now the bitcoin price action has been driven primarily by retail investors. “But it’s the institutions that we’ve started to see come in,” he stressed, adding that the appetite has “transformed.”

Bitcoin ETFs Prompted a ‘Psychological Shift’

Goldman Sachs’ head of digital assets, Mathew McDermott, spoke about crypto at the Digital Asset Summit (DAS) conference in London on Tuesday. The investment bank launched a crypto trading desk in 2021 and continues to build on it.

Bitcoin surged to a record high last week but has since undergone a correction, dipping below $63,000 on Tuesday. Commenting on bitcoin’s recent price surge, McDermott stressed:

The price action … has still been driven by retails primarily. But it’s the institutions that we’ve started to see come in … You really see now the appetite has transformed.

“Last year was tough but just coming through to this year we’ve seen a big sea-change not only in terms of the types of clients but also in terms of volumes,” the Goldman analyst noted, adding that spot bitcoin exchange-traded funds (ETFs) that were launched in early January prompted a “psychological shift.”

Major banks, including Goldman Sachs, are eyeing the potential of blockchain technology beyond cryptocurrencies, believing that the technology could revolutionize asset trading, enabling the issuance of digital versions of traditional assets like bonds. While pilot projects have shown promise, routine issuance and a flourishing secondary market for these digital assets haven’t yet materialized.

McDermott opined:

I do think over time we’ll start to see more asset classes get tokenised and actually get some scale – but maybe that’s one or two years down the line.

Recently, Goldman Sachs, CBOE, Standard Chartered, and a number of other financial institutions participated in the pilot of the Canton Network, a protocol aiming to achieve interoperability in apps using resources from various blockchains.


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