Traditional institutions are also joining the game. Goldman Sachs is optimistic about the development of cryptocurrencies by 2024.
The global head of Goldman Sachs Digital Assets believes that by 2024, institutions will gradually mature digital assets by expanding proprietary blockchain. It is expected that traditional assets will be the first to be tokenized, and Bitcoin will gradually grow and increase overall liquidity. The positive impact of blockchain on enterprises can only be realized after scaling, and the reacceptance of blockchain by banks will enhance the liquidity of tokenized asset markets. It is predicted that the tokenization of traditional assets will lead other assets, and less common assets will benefit the most in terms of liquidity, pricing visibility, and transparency. The approval of Bitcoin ETF will attract investments from pension funds and insurance companies, and improve the overall liquidity of Bitcoin.
Zhitong App has learned that Matthew McDermott, the Global Head of Digital Assets at Goldman Sachs, believes that institutions will gradually mature digital assets by expanding proprietary blockchains by 2024.
McDermott believes that compared to other more exotic asset classes, traditional assets will be the first to be tokenized, and settlement methods for both types of assets will be simplified.
He added that if Bitcoin exchange-traded funds (ETFs) are approved in 2024, Bitcoin will gradually grow and overall liquidity will increase.
Goldman Sachs predicts that institutional adoption and regulation of blockchain will lead to the maturity of digital assets by 2024. McDermott stated that while the market awaits Bitcoin ETFs, companies that have experienced the efficiency of blockchain are currently scaling up to maximize business opportunities.
Furthermore, he believes that the positive impact of blockchain on companies can only be realized after scaling. The reacceptance of blockchain by banks will increase liquidity in the tokenized asset market.
Goldman Sachs predicts the future of digital assets
McDermott said, "There are still many inefficiencies in the liquidity of collateral, which are caused by systems from decades ago. But when people start adopting digital currency technology, they will find that this is not just a business proposition that can only be seen in the future, you can even see it today."
His prediction states that the tokenization of traditional assets will precede more exotic assets, and less common assets will benefit the most in terms of liquidity, pricing visibility, and transparency.
His views align with William Quigley, the co-founder of WAX, who expects the tokenization industry to establish a niche market by 2024 and mature by 2030.
Bitcoin ETF to grow slowly
At the same time, McDermott believes that the approval of Bitcoin ETFs will attract investments from pension funds and insurance companies, and improve the overall liquidity of Bitcoin. The U.S. Securities and Exchange Commission (SEC) will make a ruling on ARK Invest's ETF application by January 10, 2024. Analysts expect the SEC to approve the remaining 13 applications as well to ensure fair competition.
McDermott believes that Bitcoin ETFs may not immediately grow and expand after approval. Instead, they will gradually gain attention over time.
It is reported that applicants must modify their S-1 filings submitted to the SEC by December 29, 2023. Bloomberg ETF analyst Eric Balchunas predicts that many companies will list authorized entities to create and redeem ETFs as the ARK deadline approaches.