Goldman Sachs’ hedge fund clients are once again showing interest in the cryptocurrency market this year. The Asia Pacific division of Goldman Sachs has observed a resurgence in activity surrounding Bitcoin, Ether, and other digital assets among its institutional clientele. The renewed enthusiasm for crypto assets has been fueled in part by the approval of spot Bitcoin exchange-traded funds (ETFs).
Max Minton, who heads digital assets at Goldman Sachs Asia Pacific, noted that many of the firm’s largest clients have either become active in or are exploring opportunities within the crypto sector. This trend, reported by Bloomberg on March 24, underscores a growing acceptance of crypto assets within traditional markets, particularly following the approval of ten new Bitcoin ETFs in the United States in January.
The majority of this increased demand originates from Goldman’s existing clients, particularly hedge funds, leveraging the firm’s options and futures offerings. Despite not offering spot crypto products, Goldman Sachs, with its record $2.8 trillion in assets under management as of 2023, launched its first crypto trading desk in 2021, focusing solely on crypto derivatives such as Bitcoin and Ether options and futures.
While 2023 saw relatively subdued activity, Minton highlighted a significant uptick in client interest, onboarding, and trading volume since the beginning of the year. Clients primarily utilize derivatives to navigate crypto market volatility and make informed predictions about future price movements, with Bitcoin-related products emerging as the preferred investment choice among active clients.
Looking ahead, Minton anticipates the potential approval of a spot Ether ETF in the U.S. to further shape Goldman’s institutional clients’ investment strategies, although Bloomberg ETF analysts remain cautious, assigning a mere 35% probability of approval by May. Despite regulatory uncertainties, Goldman aims to expand its clientele to include asset management funds, banks, and specialized crypto asset firms, demonstrating a broader commitment to the evolving crypto landscape.
