Mathew McDermott, head of digital assets at Goldman Sachs’ global markets division, says the New York-based investment bank is witnessing huge institutional demand for Bitcoin (BTC) and the crypto markets.
In a Goldman Sachs Markets Update, McDermott reveals that institutional interest in digital assets at the Wall Street firm is accelerating among a wide array of large investors.
“In terms of institutional demand, we have seen no signs of that abating. And when we talk about institutional demand we talk about the whole cross-section of the industry sectors… I’m referring to hedge funds, to asset managers, to macro funds, to banks, to corporate treasurers, insurance and pension funds. I think it’s pretty fair to say that all of that institutional client discussion is really focused around Bitcoin.”
According to McDermott, more than a third of Goldman Sachs’ institutional clients who responded to a survey by the Wall Street giant reported that they are currently holding digital assets.
“40% of the clients currently have exposure to cryptocurrencies. And that could be through a variety of different mediums, through physical, through derivatives, through securities products or other offerings in the market. And so that seemed actually a little high to me but I felt that was kind of very reflective of the demand we’ve seen over the last 3-6 months.”
The Goldman Sachs executive also reveals that more than half of the survey respondents intend to expand their digital asset portfolios in the coming months.
“I thought another interesting stat which really corroborates what we’ve really mentioned earlier was that 61% of the clients expect their digital asset holdings to increase over the next year.”
The Goldman Sachs executive adds that loose monetary policies are what’s driving the institutional demand for digital assets.
“Let’s take corporate treasurers for example. They are interested in two different aspects – firstly, should they be invested in Bitcoin on their balance sheets. And as they think through that, the key drivers from their perspective are negative rates – if they’ve got cash deposits where negative rates are being applied. And then just the general fears around asset devaluation.”