Global investment bank Goldman Sachs has advised investors against anticipating a sudden and immediate surge in the price of bitcoin upon the approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). Nonetheless, Goldman Sachs highlighted that the “ability to actually transact a product that people are familiar with and can provide scale” is “very positive.”
Goldman on Spot Bitcoin ETF Hype
Global investment bank Goldman Sachs does not anticipate an immediate surge in BTC prices following the approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC), Mathew McDermott, head of the digital asset unit at Goldman Sachs, told Reuters this week.
While emphasizing that he does not expect the approval of the ETF to trigger a “sudden immediate spike in liquidity and price,” the Goldman head of digital assets said it could attract new institutional investors to the asset class. He opined:
This ability to actually transact a product that people are familiar with and can provide scale, I think is very positive.
Goldman Sachs offers cryptocurrency derivatives trading for institutional clients within the bank’s FX desk, McDermott explained, adding that the team does not trade the underlying asset itself.
According to McDermott, the investment bank has also observed growing client interest in crypto derivatives trading, driven by market expectations for the imminent approval of spot bitcoin ETF applications by the SEC. While noting that crypto is “still a very, very, very small market,” he stated:
Definitely as the market’s getting more excited about the potential of a bitcoin ETF, there’s definitely been more interest.
McDermott further shared that he is focused on developing digital assets beyond cryptocurrency. This includes exploring the issuance of blockchain-based tokens representing traditional assets like bonds. He highlighted a “huge appetite” for digital assets, emphasizing that it has “grown significantly” in the last 12 months. Moreover, he noted that leveraging blockchain technology could enhance operational and settlement efficiencies, as well as contribute to the “de-risking” of financial markets.
The Goldman head of digital assets opined: “Probably within the next one to two years you’ll see a big significant uptick in the quantum trading on-chain, probably three to five years to really see these marketplaces at scale.” However, he believes that fully replicating the majority of financial markets exclusively on blockchain is a distant prospect.
Do you agree with Goldman Sachs’ head of digital assets? Do you anticipate a significant increase in BTC prices upon SEC approval of spot bitcoin ETFs? Let us know in the comments section below.