Cryptocurrencies and digital assets are going to be a permanent feature of banks and asset managers’ investment portfolios for the foreseeable future, Goldman Sachs’ top authority on the sector has said.
Mathew McDermott, the bank’s global head of digital assets, said cryptocurrencies have now passed a point of no return in terms of adoption as a store of value and as a hedge against currency debasement fears.
“We’ve crossed the line now,” he told Financial News in a phone interview. “The focus will become broader and so there’ll just be different reasons for why you’d want to be involved with different cryptocurrencies, because of the underlying technology that’s coming.”
Bitcoin, the world’s largest cryptocurrency, rose above $60,000 in value on 14 March to reach a high of $61,627, according to data from crypto exchange Bitstamp. Its total market value exceeded $1tn last month.
A survey conducted by Goldman Sachs in March showed that around 40% of the bank’s London clients have crypto holdings.
McDermott said between 95% and 99% of the bank’s discussions with clients regarding digital assets have focused on bitcoin to date, but that ethereum and decentralised finance were rising in popularity.
“Bitcoin may not continue to always have its dominant position… but I think the