Goldman Sachs’ hedge fund clients are re-entering the cryptocurrency market this year, encouraged by the recent approval of spot Bitcoin exchange-traded funds (ETFs). According to Max Minton, head of digital assets for Goldman Asia Pacific, many of the firm’s largest clients have become active in or are considering entering the crypto sector.
The approval of ten new Bitcoin ETFs in the United States in January has sparked renewed interest and activity among clients, signalling that cryptocurrencies are becoming a more established part of traditional markets.
The increased demand primarily comes from Goldman’s existing clients, particularly hedge funds, who utilize the firm’s options and future offerings. Despite not offering spot crypto products, Goldman launched its first crypto trading desk in 2021, focusing on derivatives like Bitcoin and Ether options and futures.
While last year was relatively quiet, there has been a notable uptick in client interest and engagement since the beginning of this year. Clients use derivatives to capitalize on crypto volatility and make informed predictions about future price movements.
Bitcoin-related products remain the most popular investment choice among active clients, but there is also anticipation surrounding the potential approval of a spot Ether ETF in the U.S. However, analysts are cautious about the likelihood of approval, citing the Securities and Exchange Commission’s prolonged silence.
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Source: Eric Balchunas
Regardless of an ETF approval, Minton added that Goldman would seek to expand into “a wider universe of clients,” including asset management funds, banks, and more specialized crypto asset firms in the future.