Crypto sees renewed interest from clients of Goldman Sachs hedge fund in 2021

Goldman Sachs’ clients are reportedly reentering the crypto market this year, driven by the approval of spot Bitcoin exchange-traded funds (ETFs). Max Minton, head of digital assets for Goldman Asia Pacific, stated that many of the firm’s largest clients are either already active or considering entering the crypto sector. This surge in interest can be attributed to the approval of ten new Bitcoin ETFs in the United States, which solidified the position of crypto assets in traditional markets. The majority of this increased demand comes from Goldman’s existing clients, particularly hedge funds, through the firm’s options and futures offerings. Despite not currently offering spot crypto products, Goldman Sachs launched its first crypto trading desk in 2021, which focuses on providing exposure to crypto derivatives such as Bitcoin and Ether options and futures. Minton noted a rise in client interest in onboarding, pipeline, and volume since the beginning of the year. Clients are primarily using derivatives to benefit from crypto volatility and make predictions on future price movements. Bitcoin-related products remain the most popular investment vehicles amongst active clients. Minton also mentioned the potential shift towards Ether if a spot Ether ETF is approved in the U.S. However, analysts from Bloomberg ETF estimate the chances of an Ether ETF approval by May to be only 35%, with the Securities and Exchange Commission’s lack of communication being seen as discouraging. Minton stated that regardless of ETF approval, Goldman Sachs plans to expand its client base to include asset management funds, banks, and specialized crypto asset firms in the future.