Goldman Sachs Group Inc is seeing substantial demand for digital assets from institutions as it works to restart its cryptocurrency trading desk.
In a survey of nearly 300 clients by the firm, 40 percent have exposure to crypto, said Matt McDermott, global head of digital assets for Goldman Sachs Global Markets Division, speaking on a podcast.
The situation is different now compared with the 2017 bitcoin bubble, due to “huge” institutional demand across different industry types and from private banking clients, he said.
Photo: Michael Nagle, Bloomberg
McDermott confirmed plans reported last week for Goldman to restart its crypto trading desk, which he said would be “quite narrow initially,” with a focus on areas such as CME Group Inc futures.
He said that US banks need to cope with regulations that bar them from trading physical cryptocurrencies.
Cryptocurrency enthusiasts argue that digital tokens and the underlying blockchain technology are gaining acceptance among more mainstream institutions.
The derivatives market and new investment products have made digital assets more easily accessible. Some strategists posit that the asset class is a potential diversifier for portfolios, while others are more skeptical and blame speculators for inflating a possible bubble in bitcoin and other cryptos.
Bitcoin yesterday rose as much as 3.4 percent in Asia, while ether gained as much as 5.3 percent to the highest since Feb. 23.
Blockchain technology offers “a real diverse set of opportunities for the financial industry,” McDermott said.
As for prices, 76 percent of those surveyed see bitcoin ending this year between US$40,000 and US$100,000, McDermott said.
However, 22 percent expect it to end the year above US$100,000.
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