Goldman Sachs' hedge fund clients are also showing renewed interest in cryptocurrency markets.
This follows the recent approval of ETFs, which has led to a resurgence of interest and activity in the crypto space.
“Many of our largest clients are active or exploring becoming active in this space,” Max Minton, Goldman's Asia Pacific head of digital assets, said in an interview.
Goldman Sachs, which launched its crypto trading desk in 2021, currently offers cash-settled Bitcoin options and Ethereum options trading in addition to Bitcoin and Ethereum futures listed on CME. However, it does not trade the underlying cryptocurrencies.
Minton noted that although last year was quieter, there has been an increase in customer interest, new customer acquisitions, transaction flow and volume since the beginning of the year.
The majority of demand comes from Goldman's existing clients, particularly traditional hedge funds, according to Minton. The bank is also expanding to a “broader customer base,” including asset managers, bank customers and select digital asset firms.
Clients use crypto derivatives for a variety of purposes, including directional investments, yield enhancement and hedging. While interest in Ethereum-related products may change depending on whether Ethereum ETFs gain approval in the US, Bitcoin-related products still make up the majority of customers' focus.
In addition to trading, Goldman is also active in tokenizing traditional assets using blockchain. The bank has launched a digital asset platform called GS DAP and recently participated in a pilot test on a blockchain network connecting banks, asset managers and exchanges.
Goldman has also invested in startups that are strategic to its vision and the evolution of the digital asset market structure, particularly blockchain infrastructure companies.
“We have a portfolio and will invest when it makes strategic sense,” Minton concluded.
*This is not investment advice.
