Global investment bank Goldman Sachs is seeing huge institutional demand for bitcoin with no signs of declining. A survey among Goldman’s institutional clients shows that 61% expect to increase their cryptocurrency. Meanwhile, 76% say the price of bitcoin could reach $ 100,000 this year.
Goldman Sachs sees no signs of institutional demand for declining bitcoin
In a podcast published Friday, Mathew McDermott, head of Digital Assets for Goldman Sachs’ Global Markets Division, discusses the cryptocurrency trading environment for institutional investors.
He explained that his team conducted a cryptocurrency survey on the institution’s institutional client base, from ‘hedge funds, to asset managers, to macro funds, to banks, to corporate treasurers, insurance and pension funds.’ He explained that “all of our institutional customer discussions are really focused on bitcoin.”
His team received responses from 280 institutional clients and published the results of the survey this week. ‘What was particularly interesting,’ according to McDermott, was that ‘40% of customers currently have exposure to cryptocurrencies’, which he said could be in any form, from ‘physical to derivatives’, through security products or other offerings in the market. The executive revealed:
As for the institutional question, we have seen no signs that it is declining … We are seeing a large amount of demand institutionally, [and] we also see it 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 sheet’, McDermott explained, saying: ‘the most important drivers from their perspective are negative rates … [and] just the general fears surrounding the devaluation of assets. ”
In addition, he said that they also think ‘should we consider this as a payment mechanism? … especially in the context of Tesla’s announcement. Elon Musk’s electric car company, Telsa, said it had invested $ 1.5 billion in bitcoin in January and would soon adopt the cryptocurrency as a means of payment for its products.
Of the institutional clients who have crypto exposure, the survey shows that 41% own physical or spot crypto. McDermott emphasizes:
61% of customers expect their digital assets to increase over the next year.
What prevents institutions from investing in cryptocurrencies, 34% of respondents believe that ‘regulation, internal investment, mandate authorizations’ is the biggest obstacle to allocating cryptocurrencies. 24% believe that the lack of well-regulated, investable crypto-assets is the biggest obstacle.
Most Goldman Institutional Clients Expect Bitcoin Price to Reach $ 100,000 this Year
Regarding the future prospects of cryptocurrencies, 54% of respondents predict that the price of BTC over 12 months will be between $ 40,000 and $ 100,000, while 22% predict that it will be over $ 100,000. This price level is not far-fetched, as several fund managers predict the same, including Skybridge Capital and Mike Novogratz.
‘As for the price action, I think it’s very difficult to predict bitcoin. It’s not an easy pastime, ”McDermott said, explaining:
The survey was very informative in the sense that 76% agreed that the price would be between $ 40,000 and $ 100,000 by the end of the year … But 22% predicted more than $ 100,000.
“I was recently in a similar survey with a private round table and the results there reflect something similar where 33% predicted more than $ 80,000 by the end of the year,” the Goldman CEO further shared.
The global investment bank recently restarted its bitcoin desk. McDermott has confirmed that the desk will begin handling bitcoin futures and non-deliverable forwards for customers. Goldman’s global head of commodity research, Jeff Currie, recently said the bitcoin market was ‘starting to mature’, calling the cryptocurrency ‘a retail inflation hedge’.
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