According to Reuters: Goldman Sachs' Global Head of Digital Assets, Mathew McDermott, anticipates a "significant uptick" in trading volumes of blockchain-based assets within the coming one or two years, according to a recent report. This rise in trading volume would follow the Wall Street giant's substantial client interest in crypto derivatives trading.
With expectations that the US securities regulator will soon approve an application for a spot bitcoin ETF (exchange-traded fund), Bitcoin has increased in value by over 50% this quarter, drawing in institutional clients, including hedge funds and asset managers, to explore potential opportunities.
However, McDermott continues to concentrate on the development of digital assets beyond cryptocurrency, such as issuing blockchain-based tokens which represent traditional assets like bonds. His observation of a "huge appetite" for digital assets, significantly amplified over the last year, is noteworthy.
Along with other banking institutions, Goldman Sachs has shown a keen interest in employing blockchain technology for trading non-crypto assets. Executing such trades on a massive scale would necessitate significant transformation in the technology infrastructure of today's financial markets.
McDermott points out that blockchain technology could streamline operations and settlements and mitigate risk in financial markets. He anticipates that in one to two years, there will be a considerable increase in on-chain trading volume, with marketplaces reaching scale in about three to five years.
Notwithstanding, McDermott believes that the total replication of financial markets exclusively on blockchain is still a distant reality.
In a Goldman Sachs survey conducted in September, 16% of the respondents anticipated over 10% of the financial market would be "tokenised" in the coming three to five years.
Goldman Sachs currently manages a team trading cryptocurrency derivatives under its FX desk for institutional clients, confirmed McDermott. While the market remains relatively small, the heightened anticipation for a possible Bitcoin ETF has amplified interest.
