US investment banking giant Goldman Sachs sees rising demand for bitcoin (BTC) not only among institutional investors, but also in the private wealth management industry. (Updated at 13:26 UTC with a tweet and additional comments on corporate investments.)
“I think it’s pretty fair to say that all of our institutional client discussion is really focused around bitcoin. Where the questions are not really, ‘What is it,’ thankfully. It’s more about how can we get exposure, what are the instruments we can transact, and what is Goldman offering today,” Mathew McDermott, Head of Digital Assets for Goldman Sachs’ Global Markets Division, said in a recent podcast released by the bank.
Also, he added:
“I think it would be a little remiss of me also not to mention, I guess, the demand that we see across our wealth management client base. You know, we see continued appetite both internally and externally through the private banks. So, yes, we see a huge amount of demand institutionally, but we’re also seeing that reflected in the private wealth management space as well.”
which means that 40% of their clients are doing their business elsewhere.
— Robert Sharratt (@robertesharratt)
As reported, Goldman Sachs is restarting its cryptocurrency trading desk and begins dealing BTC futures and non-deliverable forwards for their clients.
However, a recent report by Reuters pointed out that a rising number of private wealth managers in the US are frustrated by the fact they are unable to own bitcoin for their clients until they can hold it in an exchange-traded fund (ETF) or mutual fund, as this clears the resulting legal woes.
“Not allowing the purchase of crypto is something that’s frustrating to many advisors, but it’s such a volatile asset that many investors end up doing it on their own,” Jimmy Lee, CEO of the Wealth Consulting Group, was quoted as saying in the report.
However, as reported last week, Bitcoin ETF ball is decidedly in the regulators’ court in the United States, where the Securities and Exchange Commission is now “on the clock” – with the crypto world eagerly awaiting its response as the Chicago Board Options Exchange filed an application to list a BTC ETF from the New York-based investment management firm VanEck and its Bitcoin Trust.
Meanwhile, commenting on a survey of 300 institutional clients of Goldman Sachs, McDermott said that 40% of them currently have exposure to cryptocurrencies, and 61% of the respondents expected their digital asset holdings to increase over the next year.
“We’ve definitely seen a lot more activity across that industry sector over the last three to four months. And then when you look at the macro funds in the asset managers, it’s broadly the same, that they’ve really started to think through all the different investment theses,” he added.
Meanwhile, not everyone is optimistic when it comes to corporate investments in BTC.
“It will take more than a small handful of disruptive companies investing in bitcoin to impact the narrative in boardrooms,” Raul Fernandez, an entrepreneur and investor who sits on the audit committee of the board of chipmaker Broadcom Inc as well as other companies, told Reuters. “Larger global companies, I can’t see those conversations happening right now.”
According to Jack McCullough, President of the CFO Leadership Council and a former Chief Financial Officer (CFO), CFOs are likely to be very conservative in managing corporate treasuries.
“They’re happy sinking money into very safe places with low interest. Their job is to help grow the company through its operations, and the treasury needs to be safe and secure,” he was quoted as saying by Reuters.
Meanwhile, Goldman Sachs’ clients are also bullish in their BTC price forecasts.
“The survey was quite insightful in the sense that 76% agreed that the price by the end of the year would be between [USD 40,000] and [USD] 100,000,” McDermott said. “But 22% were predicting over 100,000 dollars.”
At the time of writing (11:40 UTC), BTC trades at USD 50,293 and is down by 1% in a day, trimming its weekly gains to less than 12%. The price rallied by 32% in a month and 464% in a year.
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