Crypto investments surge among Goldman Sachs hedge fund clients in 2021

Goldman Sachs’ clientele has reportedly shown renewed interest in cryptocurrency this year, driven by the approval of spot Bitcoin exchange-traded funds (ETFs). Max Minton, the head of digital assets for Goldman Asia Pacific, revealed that many of the firm’s largest clients have recently become active or are considering entering the crypto sector. Minton attributed this increased appetite to the approval of ten new Bitcoin ETFs in the United States, which solidified crypto assets as an integral part of traditional markets. The majority of this new demand stems from Goldman’s existing clients, particularly hedge funds, utilizing the firm’s options and futures offerings. Despite launching its first crypto trading desk in 2021, Goldman does not currently offer any spot crypto products to its clients. However, Minton noted a surge in interest from clients since the beginning of the year, particularly in onboarding, pipeline, and volume. Goldman’s clients primarily use derivatives to gain exposure to crypto volatility and make predictions on future prices. Bitcoin-related products remain the most popular investment vehicles among active clients. Minton also mentioned the potential shift towards Ether if a spot Ether ETF is approved in the US. However, Bloomberg ETF analysts predict a low chance of approval by May, as the Securities and Exchange Commission’s lack of communication with fund issuers is seen as bearish. Regardless of ETF approval, Goldman intends to expand its clientele to include asset management funds, banks, and specialized crypto asset firms in the future.