July 25, 2024

Goldman Sachs Clients Reenter Crypto Market with Focus on Bitcoin

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Clients of Goldman Sachs have rekindled their interest in the cryptocurrency market this year, spurred by the approval of spot Bitcoin exchange traded products. While Goldman Sachs does not currently offer any spot crypto products to its clients, the resurgence in appetite comes despite the fact that the investment banking giant launched its first crypto trading desk back in 2021. This desk, however, only deals with crypto derivatives, such as Bitcoin and Ether options and futures.

According to reports, Goldman’s clients have been primarily utilizing these derivatives to gain exposure to the volatility of crypto assets and to make informed predictions about price movements in the mid-term. Among these derivatives, Bitcoin-related products have emerged as the most popular investment vehicles among active clients.

In contrast, BlackRock, another industry heavyweight, has noted a slightly lesser interest in Ethereum compared to Bitcoin among its clients. Robert Mitchnick, the head of digital assets at BlackRock, emphasized during a fireside chat at the Friday Bitcoin Investor Day conference in New York that Bitcoin remains overwhelmingly the number one focus for their client base, with Ethereum following closely behind.

However, Mitchnick also pointed out that demand for every other crypto asset besides Bitcoin and Ethereum is “very, very little” among BlackRock’s clients. When questioned about the possibility of launching an exchange-traded fund (ETF) related to memecoin dogwifhat (WIF), Mitchnick expressed uncertainty, indicating that there is a misconception within the crypto industry regarding the breadth of services that BlackRock intends to offer.

Despite previous reservations about Bitcoin, BlackRock surprised the market in January by obtaining approval to offer the Bitcoin Bitcoin Fund (IBIT) to investors. This fund quickly gained traction, becoming one of the top five ETFs overall within just two months of trading. With a staggering $15 billion in assets, the Bitcoin Bitcoin Fund has outpaced its competitors by a significant margin.

The decision to launch a Bitcoin ETF was driven, in part, by the consistent and enduring interest expressed by BlackRock’s clients in Bitcoin, even during both bullish and bearish market conditions. This move signals a shift in sentiment among traditional financial institutions towards embracing digital assets as a legitimate investment class.

Digital Assets Desk

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