Global investment bank Goldman Sachs is seeing huge institutional demand for bitcoin, with no signs of abating. A survey of Goldman’s institutional clients shows that 61% expect to increase their cryptocurrency holdings. Meanwhile, 76% say the price of bitcoin could reach $ 100,000 this year.
Goldman Sachs sees no signs of institutional demand for bitcoin reduction
In a podcast published on Friday, Mathew McDermott, head of Digital Assets at Goldman Sachs’ Global Markets Division, discusses the cryptocurrency trading environment for institutional investors.
He explained that his team conducted a cryptocurrency survey across the company’s institutional customer base, from “hedge funds to asset managers, to macro funds, to banks, corporate treasurers, insurance and pension funds”. He clarified that “the entire discussion of our institutional client is really focused on bitcoin”.
His team received responses from 280 institutional clients and published the survey results this week. “What has been particularly interesting,” according to McDermott, is that “40% of customers currently have exposure to cryptocurrencies”, which he explained could be in any form, from “physical to derivatives, through securities of securities securities or other offers on the market. “The executive revealed:
In terms of institutional demand, we did not see any signs of reduction … We see a great institutional demand, [and] we are also seeing this reflected in the private wealth management space.
He further described that “corporate treasurers, for example, are interested in two different aspects”. The first is whether they should “invest in bitcoin on their balance sheets”, detailed McDermott, citing that “the main factors in their perspective are the negative rates … [and] only the general fears surrounding the devaluation of assets. “
In addition, he said that they are also thinking “should we consider it as a payment mechanism? … Particularly in the context of Tesla’s announcement. ”Elon Musk’s electric car company, Telsa, said it invested $ 1.5 billion in bitcoin in January and will soon be accepting cryptocurrency as a means of payment for its products.
Of institutional customers who have exposure to cryptography, the survey shows that 41% have physical or spot encryption. McDermott emphasized:
61% of customers expect their digital assets to increase next year.
As for what prevents institutions from investing in cryptocurrencies, 34% of respondents believe that “regulation, internal investment, mandatory permissions” are the biggest obstacles to start allocating in crypto assets. 24% believe that the lack of well-regulated and investable cryptographic assets is the biggest obstacle.
Most of Goldman’s institutional customers expect Bitcoin’s price to reach $ 100,000 this year
As for the future prospects for cryptocurrencies, 54% of respondents predict that the price of BTC will be between $ 40,000 and $ 100,000 in 12 months, while 22% predict it will be over $ 100,000. This price level is not far-fetched, as several fund managers are predicting the same, including Skybridge Capital and Mike Novogratz.
“In terms of price action, I think it is very difficult to predict bitcoin. It is not an easy pastime ”, said McDermott, elaborating:
The survey was very insightful in the sense that 76% agreed that the price at the end of the year would be between $ 40,000 and $ 100,000 … But, 22% predicted more than $ 100,000.
“I recently participated in a similar survey with a private roundtable and the results there echoed something very similar, where 33% predicted more than $ 80,000 by the end of the year,” shared the Goldman executive.
The global investment bank recently restarted its bitcoin trading desk. McDermott confirmed that the bureau will begin dealing with bitcoin futures and forward contracts for undelivered items to customers. Goldman’s global head of commodities research, Jeff Currie, said recently that the bitcoin market “is starting to become more mature”, calling the cryptocurrency “a protection against retail inflation”.
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