With the growth in institutional adoption and mainstream interest increasing, investors prevail to be bullish regarding crypto. The latest Goldman Sachs Crypto survey portrays that 60 percent of those polled anticipate increasing their digital asset holdings in the next one to two year.
Goldman Sachs Crypto Survey: Recent Trends
The latest Goldman Sachs Crypto survey, which polled the clients of the firm on their outlook and activities related to digital currency, found that 32 percent of the respondents said they try to prominently increase their holdings of crypto, while 28 percent stated that they will “somewhat” raise their holdings.
The latest Goldman Sachs Crypto survey comes on the heels of the execution of the investment banks of the first OTC (over the counter) digital currency transaction with Galaxy Digital on March 21 2022 which is an industry first portraying the continued expansion of the crypto offerings of the banks. The deal also portrays the prevailed adoption and maturation of crypto assets by the financial institutions.
Ben Nadareski, vice president of global trading at Galaxy Digital, said that,
“We are seeing a substantial shift in participation, where early movers and risk takers are now being joined by a much broader group of market participants.”
He further added that,
“With core institutional players like Goldman Sachs enabling crypto offerings to their clients, we are starting to see traditional asset managers, funds, pensions, family offices, and ultra-high net worth investors enter into crypto markets through a much wider range of institutional-grade products.”
He further said that the broad trend of crypto adoption is a function of both market maturity and client demand. Banks, for instance, are seeing unexpected demand for crypto exposure from their users. However, said banks could not initially cater to this demand because of the regulatory uncertainty around the crypto space, he explained, adding that the scenario is changing. He on Goldman Sachs crypto prediction said,
“Banks are finding solutions to meet this demand, such as in the OTC market as we’ve seen with our recent trade with Goldman Sachs. Galaxy is helping institutions answer that demand. We executed the first OTC crypto trade with a major bank, Goldman Sachs, earlier this month, and we expect other institutions to follow. Galaxy is the bridge into crypto for banks and other institutions. And now that the bridge has been built, we’re expecting to see a lot more traffic,”
While stating that, he further said that,
“Institutions have a responsibility to provide access to a diversified portfolio, and that now includes crypto.”
Crypto Investors Interested in More Coins As Per The Goldman Sachs Crypto Survey
While Ether and Bitcoin take the lion’s share of crypto interest of the investors, the Goldman Sachs Crypto survey notes that the asset space of interest for potential exposure broadens outside of these two offerings. Indeed, 22 percent of those polled state that they favor BTC as well as ETH, 15 percent state that they are interested in altcoins, 14 percent in DeFi (Decentralized Finance) tokens, and 13 percent in stablecoins, and 9 percent in NFTs (Non fungible tokens).
Nadareski further asserted that as ETH and BTC together portray over half of the approximate $2 trillion crypto market, that is where the institutional liquidity is presently, and it helps illustrate why investors, mainly institutions, are most love trading them as the entry point into crypto space. He said,
“As volumes continue to increase among some of the crypto ‘majors,’ such as Solana, terra, and others, that will help to boost liquidity and market access for a broader set of coins, which in turn is likely to attract more interest from institutional investors. We expect more diversification at the institutional level to play out over the next 3-6 months.
Larry Felix, who is the co-founder and also the CEO of Noteworthy, noted that altcoins are not far behind ETH or BTC in the Goldman Sachs Crypto survey and that this outcome, in terms of interest, “is a very good sign.” He said in an interview,
“A diversified industry is a strong industry, and investments in ethereum and altcoins like solana or terra are a big reason that crypto can weather the volatile leaps in bitcoin price in a way that it could not in the past. Bitcoin is always going to be the king of crypto, but I am glad that it’s no longer the only one relevant in the eyes of traditional finance.”
Another primary finding of the Goldman Sachs Crypto survey is that an amazing 83 percent of those polled see a CBDC (central bank digital currency) playing a somewhat or very prominent role in the future of the financial industry. Felix stated,
“Up to this point the Biden administration, while researching a CBDC, hasn’t shown a strong interest in creating one, and there is strong opposition to it from some members of Congress. But if we do get a digital dollar on the blockchain it would be the biggest shakeup to the crypto ecosystem since the launch of ethereum.”
Lastly, the Goldman Sachs cryptocurrency report points out that the top drivers for investing in digital currency are the high potential return, low correlation, and institutional adoption of traditional assets. According to Fabrice Cheng, CEO & co-founder of Quadrata told GOBankingRates,
“Ultimately, crypto is going to need to take over some of traditional finance’s investors and market share in order to keep growing. Given investors cited institutional adoption and high potential return as reasons they invested, I expected the holdouts to keep converting and putting their money into crypto because both institutional adoption and prices should keep increasing over the next few years.”
Recently, financial giant Goldman Sachs conducted a survey to find out at what rate institutions and people are interested in adopting cryptocurrency. As per the Goldman Sachs Crypto survey, 15 percent of family offices and also financial institutions that do business have already made their investment in digital currency. They have found out that closely half of the families of their office clients are interested in cryptos.