Goldman's Whales Dive Back into Crypto after ETF Approval

Goldman's whales are making a comeback in the crypto market post-ETF approval. After a dive in 2022 due to FTX collapse, these large investors are showing renewed interest in digital assets. The approval of a Bitcoin ETF has reignited their appetite for crypto, with reports confirming a resurgence in activity. Goldman's Digital Assets Head has officially confirmed the return of these influential players to the market.

Goldman's Large Investors Dive Back into Crypto After ETF Approval

Are Goldman Sachs' largest investors regaining their appetite for crypto? It seems so, as reports indicate renewed activity following the approval of a spot Bitcoin exchange-traded fund (ETF). Last year, such clients were largely dormant, a byproduct of the 2022 FTX collapse. However, the recent ETF approval has sparked a resurgence of interest, with many of these large clients returning to the market.

Goldman's Digital Assets Head Confirms Resurgence

Max Minton, head of digital assets for Goldman Asia Pacific, has confirmed the uptick in activity. According to Minton, the ten-spot Bitcoin ETF approvals have triggered this resurgence. Interestingly, Goldman Sachs had previously hinted at this impact in a post published by Crypto News Flash.

McDermott Provides Context to the Situation

In February 2023, Mathew McDermott, Goldman Sachs' global head of digital assets, shed light on the indecision of large investors to re-enter the market. He emphasized the challenges posed by the lack of better-regulated and capitalized entities in crypto adoption. Additionally, the market pullbacks experienced in 2022 following the FTX exchange collapse, which pushed most assets to trade about 90% below their all-time highs, also contributed to the reluctance of large investors.

Existing Clients Renew Interest in Crypto

Goldman's crypto trading desk, launched in 2021, has seen significant growth, offering cash-settled Bitcoin and Ether option trading alongside CME-listed Bitcoin and Ether futures. However, last year remained relatively quiet as the crypto market completed its recovery phase. This year, the broader market has shown signs of impressive gains, with Bitcoin setting a new all-time-high price ahead of the highly anticipated halving event.

As Minton confirms, the majority of the current interest stems from existing clients, primarily traditional hedge funds. He further discloses that the bank is actively expanding into a wider client base, including asset managers, bank clients, and selected digital asset firms.

Goldman's Role Extends Beyond Crypto Trading

Goldman Sachs' involvement in the industry extends beyond crypto trading, encompassing traditional asset tokenization using blockchain. According to McDermott, the bank's focus in crypto revolves around "tokenization, remaking the plumbing of the financial market, and the impact of digital money on markets."

Excitement for the Future of Crypto

McDermott expresses enthusiasm for the potential of crypto technology, stating, "The excitement from our side is ... seeing how this technology can impact many different parts of the financial system and have a real commercial impact." He believes the industry is in its early stages of adoption, with financial institutions increasingly building out their digital asset teams and strategies.