Goldman Sachs yesterday announced that it is to offer its first investment vehicles for bitcoin and other digital assets to clients of its private wealth management group in the second quarter of this year. The bank has joined other leading investment banks JP Morgan, Morgan Stanley in offering Bitcoin investment services for clients, with significant implications for the adoption of cryptocurrencies by institutional investors globally.
With that in mind, I’m reaching out to share some insights on the news from a thought leader in the crypto industry. Let me know if you’d like to be connected with Andrew for further insights on this topic or the institutional adoption of cryptocurrencies at large.
Last year was a bumper year for hedge fund launches. According to a Hedge Fund Research report released towards the end of March, 614 new funds hit the market in 2021. That was the highest number of launches since 2017, when a record 735 new hedge funds were rolled out to investors. What’s interesting about Read More
Goldman Sachs' Decision To Place Bitcoin Under Its Wealth Management Arm
Andrew Kessler, CTO and Co-founder of Zenotta commented:
“Goldman Sachs has had a love hate relationship with crypto going back many years. Having walked away from the R3 consortium it has struggled to place crypto into a good fit within its operations. Its decision to place Bitcoin and digital assets under its wealth management arm indicates that banks now see crypto squarely as digital gold meaning futures, options and derivatives are all on the cards.
Adoption of generation one and two cryptocurrencies (for example Bitcoin and Ethereum) as digital currencies now seems to be abandoned. Financial institutions will most likely adopt these crypto as assets, develop custody offerings and build financial instruments around them. It is likely that adoption under this model will accelerate dramatically over the next 12 to 18 months.
The launch of multiple Central Bank Digital Currencies is likely to be the next major validation for adoption of cryptocurrencies, although this move will be a double edged sword. While CBDCs will validate blockchain technology in a significant way, it does so at the cost of putting crypto on the wrong path regarding future development. Many mainstream adopters have not understood the technology and are largely driven by a fear of missing out, driving a misguided crypto world that has very little to do with a new economy, transaction level control, nor building out collaboration and consensus.”