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Goldman Sachs sees surge in cryptocurrency options exposure among hedge funds

This trend suggests that financial institutions are increasingly accepting cryptocurrencies as an integral part of global financial markets.

Date: 2024-03-25 Author: Łukasz Michałek
Goldman Sachs sees surge in cryptocurrency options exposure among hedge funds

The resurgence of the cryptocurrency market has led to increased interest from Goldman Sachs hedge fund clients in cryptocurrency derivatives.

In 2021, the bank officially launched its cryptocurrency trading division. After years of consideration, it began facilitating various Bitcoin-related transactions from 2017, including Bitcoin futures and CME BTC futures.

Goldman now offers both cash-settled options trading on Bitcoin and Ether, and CME-listed Bitcoin and Ether futures contracts. However, it does not trade in the actual tokens themselves.

In a recent interview, Max Minton, head of digital assets for Asia-Pacific at Goldman Sachs, told Bloomberg that interest from the bank’s clients has recently increased as a result of the approval of ETFs. Minton noted that many clients are either currently active in the cryptocurrency space or are considering entering it.

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Goldman Sachs clients take advantage of cryptocurrency derivatives

According to Minton, there has been a noticeable increase in client interest, new hires and trading volume since the beginning of the year.

Most of this demand is coming from Goldman’s existing clients, particularly traditional hedge funds. However, the bank is also expanding its client base with asset managers, banking clients and certain digital asset firms.

The head of digital assets added that clients are using cryptocurrency derivatives for a variety of purposes, such as directional betting, profit enhancement and hedging.

Bitcoin ETF launch sparks optimism in the market

The development follows Bitcoin’s recent surge to a record high above $72,000, triggered by the launch of the Bitcoin ET F and anticipation of the upcoming halving.

Despite the fact that Bitcoin recovered to around $67,075 on Monday, the outlook for cryptocurrency derivatives remains bullish. Genesis Trading ‘s quarterly report last year predicted a significant expansion in the sector, driven by a significant drop in spot market liquidity and a growing trend toward derivatives.

Currently, it seems that most Goldman clients are mainly focused on Bitcoin-related products. However, there is a possibility of a shift in interest toward ether-related products if ETFs receive approval in the US.

Mathew McDermott, director of digital assets at Goldman, expressed optimism about the approval of Ether ETFs. The SEC is expected to make a preliminary decision on the Ethereum ETF by May 23.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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