Key Points
- Goldman Sachs’ hedge fund clients are showing increased interest in cryptocurrency options.
- The bank is also engaged in the tokenization of traditional assets through blockchain technology.
Goldman Sachs’ hedge fund clients are showing a renewed interest in the cryptocurrency markets. This resurgence in activity is largely due to the recent approval of ETFs, according to Max Minton, the bank’s Asia Pacific head of digital assets.
Minton revealed in an interview, “Many of our largest clients are active or considering becoming active in the cryptocurrency space.” Goldman Sachs, which launched its cryptocurrency trading desk in 2021, offers cash-settled Bitcoin and Ether option trading, as well as Bitcoin and Ether futures listed on CME. However, the bank does not trade the underlying cryptocurrency tokens.
Increased Interest and Diversification
Minton noted a pick up in client interest since the start of the year, after a quieter period in the previous year. The primary demand comes from the bank’s current clients, predominantly traditional hedge funds. However, Goldman Sachs is also expanding to include a wider client base, such as asset managers, bank clients, and specific digital asset firms.
These clients are using cryptocurrency derivatives for different purposes, including directional bets, yield enhancement, and hedging strategies. While Bitcoin-related products continue to attract most clients, interest in Ether-related products might grow, particularly if Ether ETFs get approved in the United States.
Tokenization of Assets
Apart from trading activities, Goldman Sachs is also involved in tokenizing traditional assets using blockchain technology. The bank has launched a digital asset platform named GS DAP and recently participated in a pilot program on a blockchain network connecting banks, asset managers, and exchanges.
Goldman Sachs is not alone in exploring asset tokenization. Last week, asset management giant BlackRock launched its tokenized fund BUIDL on the Ethereum blockchain. The BlackRock USD Institutional Digital Liquidity Fund (BUIDL) is designed to offer investors a secure, transparent, and efficient investment opportunity.
In addition, Goldman Sachs has been investing in startups that align with its vision and contribute to the development of the digital asset market structure, with a particular focus on blockchain infrastructure companies. “We maintain a portfolio and will invest opportunistically when it aligns with our strategic objectives,” Minton confirmed.
