Goldman Sachs executive: Digital asset market will grow in 2024

Author: Eric Revell, Fox Business; Compiler: Songxue, Golden Finance

Goldman Sachs executives said that as more blockchain business applications enter the market, regulation will help promote its use in the new era. Used in investment applications, the digital asset market will further develop and mature next year.

Mathew McDermott, head of digital assets at Goldman Sachs, said in an interview with Fox Business Channel,One of the biggest developments in the digital asset space last year was the increasing number of traditional financial institutions in the past 12 to 18 months. participate in this field.

He explained that this happened against the background of people’s increasing recognition that digital assets can “increase efficiency, reduce risks, and have a lot of impact on business models and the way enterprises operate. Very positive impact. That's where increased regulatory transparency around the world helps." McDermott said digital assets are at a stage where people are more broadly accepting of the technology, which is allowing the market to focus on “Building and creating scale,” which is “the stage where you really start to see the business value proposition emerge” is achieved.

“When I think about tokenization, it’s obviously a topic that’s been talked about a lot and I think for me next year we’re going to start to see the market develop. So we’re going to start to see scale Adoption, especially in the context of various sectors “Investors are the buy-side. This is because we will start to see the emergence of on-chain secondary liquidity, which is a key enabler. So for me, that's one of the key developments for next year.

McDermott also said that greater adoption of the technology will enhance "collateral liquidity" next year by solving problems in the "market financial pipeline."

"When you When you look at the liquidity of collateral, you see that there are still many inefficiencies in the system from decades ago. This may be due to issues such as custody fragmentation, lack of synchronization of settlements, and inefficient use of capital and liquidity. ”, McDermott explained. “So when you play it out in this way, that’s my full expectation for next year — when you really start to see people adopting this technology, they’re going to realize that you can not only look at To the business proposition of the future, you can actually see it today. "

"At a very micro level, we are already doing this, we are active in this area, and we are starting to see the commercial value of it. Now the market is really paying attention to this area, and they have realized that you can reduce risk, operational settlement, and jump risk in terms of collateral allocation," McDermott said.

He went on to say that by 2024, he sees growth There will be a primary focus on more general asset classes, and then gradually begin to expand into more opaque asset classes at the end of the year and beyond.

“I fully expect buy-side adoption to grow significantly next year,” McDermott said.< /p>

"And then I think probably by the end of this year, probably next and beyond, you'll start to see some traction in some of the more opaque asset classes that may have a greater value proposition, purely Because pricing is opaque, liquidity may be lower, but transparency is higher,” he added.

The U.S. Securities and Exchange Commission is considering applications to approve Bitcoin and Ethereum spot exchange-traded funds (ETFs), The application could come in early 2024 so traders can use the securities. McDermott said the approval would allow more institutional investors to enter the digital asset market, even if they don't necessarily invest directly in the underlying assets.

" First,it broadens and deepens the liquidity of the market. Why do this? What you do with that is you're actually creating institutional products that can be traded by institutions that don't need to be exposed to the naked assets," McDermott said. "I think, for me, that opens up a lot of opportunities in pensions, insurance companies, etc. door. "

He added that while he does not expect the approval of spot cryptocurrency ETFs to immediately lead to significant changes in the market, the market will grow within a year.

"I think, Even if you get approval in the first quarter, you'll gradually see the liquidity and those who want to trade the product expand and deepen throughout the year. It’s no secret that this has been the best-performing asset class this year. ”