Goldman Sachs has reported an increased interest in cryptocurrency derivatives among its hedge fund clients as a result of the resurgence of the crypto market. The bank launched its crypto trading desk in 2021 and has since facilitated various Bitcoin-linked trades, including Bitcoin non-deliverable futures and CME BTC futures. Goldman currently offers cash-settled Bitcoin and Ether option trading, as well as CME-listed Bitcoin and Ether futures, but does not directly trade the actual underlying crypto tokens themselves. The recent approval of ETFs has reignited interest and activity among the bank’s clients.
Max Minton, Goldman’s Asia Pacific head of digital assets, stated that there has been a noticeable increase in client interest, onboarding, pipeline, and trading volume since the beginning of the year. The majority of this demand comes from traditional hedge funds that are already clients of Goldman, but the bank is also expanding its client base to include asset managers, banking clients, and specific digital asset firms. Clients are using crypto derivatives for a variety of purposes, including directional bets, yield enhancement, and hedging.
The surge in Bitcoin’s price to a record high above $72,000 has been attributed to the launch of a Bitcoin ETF and anticipation around the upcoming halving event. Despite Bitcoin retracing to around $67,075 as of Monday, the outlook for crypto derivatives remains bullish. A report from Genesis Trading last year predicted significant growth in the sector due to a decrease in spot market liquidity and a growing trend towards the use of derivative instruments. Most of Goldman’s clients are currently focused on Bitcoin-related products, but there is potential for a shift towards Ether-related products if Ether ETFs receive approval in the US.
Mathew McDermott, Goldman’s head of digital assets, expressed optimism about the approval of Ether ETFs back in January. The SEC is expected to make its initial ruling on a spot Ethereum ETF by May 23. The approval of Ether ETFs could lead to a shift in client interest towards Ether-related products within the crypto derivatives market. Goldman Sachs seems to be anticipating and positioning itself to capitalize on this potential shift in the market as they continue to engage with their clients and offer a range of crypto derivative products to meet their diverse needs. The recent developments in the cryptocurrency market signal growing acceptance and integration of digital assets within traditional financial institutions like Goldman Sachs.
