Goldman Sachs is to re-activate its crypto trading desk after detecting huge institutional demand for bitcoin among its client base.
In a podcast, Matt McDermott, Goldman Sachs’ head of digital assets, says that a UK survey of 300 of the firm's clients found that 40% of them have holdings in crypto.
Fully 61 percent expect their digital asset holdings to increase over the next year, with bitcoin leading the way.
“I think it’s pretty fair to say that all of our institutional client discussion is really focused around bitcoin,” he says. “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?”
A recent research primer by JPMorgan suggested that bitcoin could rally as high as $146,000 in the long term as it competes with gold as an 'alternative' currency.
McDermott believes that bitcoin’s current rally is markedly different than the late 2017 bubble, that saw it zoom close to $20,000 a coin, only to sink as low as $3,122 the next year. This is largely because of demand from private banking clients and institutions.
“When we talk about institutional demand, we talk about the whole cross section of the industry sectors,” he says. "And when I talk about the broad spectrum, I’m referring to hedge funds, to asset managers, to macro funds, to banks, to corporate treasurers, insurance, and pension funds.”