- McDermott tempers expectations that the approval of these ETFs will immediately bring a radical change to the crypto landscape.
- McDermott foresees significant growth in the crypto market in 2024 as part of the future outlook.
- McDermott hints at potential applications in various asset classes, including derivatives and private equity, for the platform.
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Mathew McDermott, the head of digital assets at Goldman Sachs, shared predictions regarding Bitcoin
Goldman Sachs’ Predictions for ETFs
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Mathew McDermott, the head of digital assets at Goldman Sachs, highlighted the potential impact of the approval of spot Bitcoin and Ether exchange-traded funds (ETFs) on the cryptocurrency market. McDermott noted that this step could significantly increase institutional interest in digital assets.
He claims that this approval will increase market liquidity and diversify it. The primary reason for this increase in liquidity is the creation of institutional-grade products that allow major financial players, such as pension funds and insurance companies, to invest in cryptocurrencies without directly handling the assets.
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McDermott tempers expectations that the approval of these ETFs will immediately bring a radical change to the crypto landscape. Instead, he envisions a more gradual evolution over the next year depending on regulatory approvals.
The expectation of major players in the financial sector, such as BlackRock and Fidelity, waiting for the decision of the U.S. Securities and Exchange Commission on spot Bitcoin ETF applications, is increasing anticipation in the financial sector. The general sentiment is hopeful for a positive outcome that could open new doors for institutional investments in bitcoin.
Looking ahead to 2024, McDermott anticipates significant growth in the crypto market. This optimism is reinforced by the increasing integration of blockchain technology into commercial applications and the participation of traditional financial institutions in the crypto space.
Another area of interest for McDermott is the development of tokenization markets. He predicts that these platforms will gain significant traction, particularly as an enabler for the emergence of secondary liquidity among investors, defining it as a critical driver for market expansion.
Goldman Sachs’ Leap into Tokenization
Earlier this year, Goldman Sachs launched a tokenization platform called GS DAP. This private blockchain played a prominent role in the sale of $102 million worth of tokenized green bonds in Hong Kong, significantly reducing settlement times.
McDermott hinted at potential applications in various asset classes, including derivatives and private equity, for the platform. Goldman’s digital asset team has grown from a modest four-member team in 2020 to a robust unit of 70, driven by plans for further growth based on market demand.