Goldman Sachs hedge fund clients are heavily investing in cryptocurrency this year.

Institutional clients of Goldman Sachs’ Asia Pacific division are becoming more interested in cryptocurrencies like Ether and Bitcoin. According to reports, Goldman Sachs’ clients started investing in cryptocurrencies this year. their enthusiasm sparked by the approval of spot Bitcoin exchange-traded funds.

According to a Bloomberg story dated March 24, Max Minton, head of digital assets for Goldman Asia Pacific, stated that several of his company’s biggest clients had lately started participating in the cryptocurrency market or were “exploring getting active.”

In line with Minton, an important part of the rise in interest in cryptocurrencies is due to the US government’s approval of ten new Bitcoin ETFs in January, which solidified the idea that these assets should include more deeply in traditional markets.

“The recent ETF approval has triggered a resurgence of interest and activities from our clients.”

Insights from Minton about Goldman Sachs and Cryptocurrency

As Minton explained, the majority of new demand comes from Goldman Sachs current client base through his company’s options and futures offers; the most active of these clients are hedge funds. At the end of 2023, Goldman Sachs reported managing a record $2.8 trillion in assets.

Unexpectedly, Goldman created its first crypto trading desk in 2021, but as of right now, it does not provide its clients with any spot crypto products. The desk only exposes cryptocurrency derivatives, such as Bitcoin and Ether futures and options.

Although last year was quieter, Minton noted that since the beginning of the year, clients’ interest in onboarding, pipeline, and volume has increased. In the words of Minton, the main purposes of Goldman Sachs customers’ futures were to make weighted mid-term price projections and to get exposure to the volatility of cryptocurrency.

According to Minton, the most well-liked investment vehicles among clients who are actively trading are those tied to Bitcoin. Minton suggested that his company’s institutional clients might start to favor Ether if a spot Ether ETF approved in the US.

However, Bloomberg ETF analysts believe that there is only a 35% probability that an Ether ETF can be approved by May, and they view this as a result of the Securities and Exchange Commission‘s protracted “radio silence” toward potential fund issuers.

Despite the acceptance of an ETF, Minton continued, Goldman Sachs will eventually aim to reach out to “a wider universe of clients,” which includes banks, asset management companies, and more specialist organizations dealing in cryptocurrency assets.