Goldman Sachs Clients Eye Crypto Market Amid Institutional Surge

Bitcoin (BTC) and other cryptocurrencies, including Ethereum (ETH) and XRP (XRP), have experienced a surge in value following a positive prediction by a renowned stock market analyst. The bitcoin price has reached over $70,000, approaching its previous all-time high, while other cryptocurrencies have also witnessed significant gains, contributing to a $300 billion increase in the crypto market's overall value.

Goldman Sachs Clients Eye Crypto Market as Institutional Interest Surges

By Billy Bambrough

November 23, 2023

The cryptocurrency market has experienced a significant surge in value, with Bitcoin (BTC) topping $70,000 per coin and Ethereum (ETH), XRP (XRP), and other major coins following suit. This upswing comes amidst a resurgence of interest from institutional investors, particularly hedge funds managed by Goldman Sachs.

Goldman Sachs' Asia Pacific head of digital assets, Max Minton, revealed that the recent approval of U.S. spot Bitcoin exchange-traded funds (ETFs) has sparked renewed enthusiasm among the bank's clients. "Many of our largest clients are active or exploring getting active in the space," Minton told Bloomberg.

The majority of this interest is directed towards Bitcoin, according to Minton, but this could shift if Ethereum secures a spot ETF of its own. However, recent reports indicate that Ethereum's May deadline for spot ETF approval is increasingly unlikely due to a lack of engagement from the U.S. Securities and Exchange Commission (SEC).

Goldman Sachs established a crypto trading desk in 2021 and currently offers cash-settled Bitcoin and Ethereum option trading. The bank's clients are showing a keen interest in cryptocurrencies, particularly Bitcoin, as evidenced by the strong performance of the BlackRock spot Bitcoin ETF launched in January.

Meanwhile, Goldman Sachs' head of digital assets, Mathew McDermott, emphasized the growing institutional appetite for cryptocurrencies at a London crypto conference last week. "The price action ... has still been driven by retails primarily," McDermott said. "But it's the institutions that we’ve started to see come in. You really see now the appetite is transformed."

However, inflows into the 11 new Wall Street spot Bitcoin ETFs have reversed course in recent days, losing a combined $850 million. This decline suggests that the recent rally may be nearing its peak.

"People have looked at how much the price of Bitcoin has fallen and they’ve decided to hold off, nobody wants to catch a falling knife," said James Butterfill, head of research at crypto investment group CoinShares.

Despite this temporary setback, the resurgence of institutional interest in cryptocurrencies signals a growing recognition of their potential as an asset class. As the regulatory landscape evolves and more institutions embrace digital assets, the crypto market is poised for further growth and innovation.