Global investment bank Goldman Sachs is seeing huge institutional demand for bitcoin with no signs of abating. A survey of Goldmanâ€™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 Abating
He explained that his team conducted a cryptocurrency survey across the firmâ€™s institutional client base, from â€œhedge funds, to asset managers, to macro funds, to banks, to corporate treasurers, insurance, and pension funds.â€ He clarified that â€œall of our institutional client discussion is really focused around bitcoin.â€
His team received responses from 280 institutional clients and published the results of the survey this week. â€œWhatâ€™s been particularly interesting,â€ according to McDermott, was that â€œ40% of the clients currently have exposure to cryptocurrencies,â€ which he explained could be in any forms, from â€œphysical through derivatives, through securities products, or other offerings in the market.â€ The executive revealed:
He further described that â€œcorporate treasurers, for example, theyâ€™re interested in two different aspects.â€ The first is whether they should be â€œinvesting in bitcoin on their balance sheet,â€ McDermott detailed, citing that â€œthe key drivers from their perspective are negative rates â€¦ [and] just the general fears around asset devaluation.â€
In addition, he said that they are also thinking â€œshould we consider it as a payment mechanism? â€¦ particularly in the context of Teslaâ€™s announcement.â€ Elon Muskâ€™s electric car company, Telsa, said that it invested $1.5 billion in bitcoin in January and will soon be accepting the cryptocurrency as a means of payments for its products.
Out of the institutional clients that have crypto exposure, the survey shows that 41% own physical or spot crypto. McDermott emphasized:
As for whatâ€™s stopping institutions from investing in cryptocurrencies, 34% of respondents believe that â€œregulation, internal investment, mandate permissionsâ€ are the greatest hurdles to start allocating to crypto assets. 24% believe that a lack of well-regulated, investable crypto assets is the greatest hurdle.
Most Goldmanâ€™s Clients Expect Bitcoin Price Could Reach $100K This Year
As for the future outlook of cryptocurrencies, 54% of respondents predict the price of BTC will be between $40,000 and $100,000 in 12 months while 22% predict it will be more than $100,000. This price level is not far-fetched as several fund managers are predicting the same, including Skybridge Capital and Mike Novogratz.
â€œIn terms of the price action, I think itâ€™s very difficult to predict bitcoin. Itâ€™s not an easy pastime,â€ McDermott opined, elaborating:
â€œI was on a similar survey with a private roundtable recently and the results there echoed something quite similar where 33% were predicting over $80,000 by the end of the year,â€ the Goldman executive further shared.
The global investment bank recently restarted its bitcoin trading desk. McDermott confirmed that the desk will begin handling bitcoin futures and non-deliverable forwards for clients. Goldmanâ€™s global head of commodities research, Jeff Currie, recently said that the bitcoin market â€œis beginning to become more mature,â€ calling the cryptocurrency â€œa retail inflation hedge.â€
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