The financial landscape is on the cusp of a transformative period, according to Matthew McDermott, the dynamic head of Digital Assets at Goldman Sachs. With a wealth of knowledge and an eye firmly on the future, McDermott voiced his bullish stance on the potential growth of the cryptocurrency market come 2024. Unveiling his forecast during an interview with Fox Business, the astute executive underscored an unwavering optimism in the ascent of digital currencies.
McDermott’s forecast aligns with the sentiments of an increasing number of cryptocurrency proponents who eagerly anticipate the regulatory nod for a Bitcoin or Ethereum spot Exchange-Traded Fund (ETF). The expectation is that approval will fan the flames of demand for cryptocurrencies among institutional investors, those who have hitherto tread cautiously amidst the sector’s notorious price fluctuations.
“One, it broadens and deepens the liquidity in the market. And why does it do that? It does that because you’re actually creating institutional products that can be traded by institutions that don’t need to touch the bare assets. And I think that, to me, that opens up the universe of the pensions, insurers, etc.,” McDermott explained.
However, McDermott tempered the enthusiasm with a dose of reality, suggesting the uptake through spot ETFs will be more evolutionary than revolutionary. He envisages a natural and progressive swell in demand and valuation throughout 2024, rather than an instantaneous surge.
With the U.S. Securities and Exchange Commission (SEC) poised to conclude lengthy deliberations on several Bitcoin spot ETF applications, the marketplace is abuzz with anticipation. A decision is expected to fall within a specific window early in the year, potentially marking the end of an extended waiting period for many asset managers.
Furthermore, McDermott highlighted the expansion of blockchain application in commercial settings as another factor set to invigorate institutional interest in digital currencies. Tokenization—converting rights to an asset into a digital token—appears ready to take a significant stride forward, promising to foster secondary market liquidity built upon blockchain technology.
“When I think about tokenization, which is obviously a topic that’s talked about quite extensively, I think for me next year what we’ll start to see is the development of marketplaces. So where we start to see scale adoption, particularly across the buy side in the context of investors. And that’s because we’ll start to see the emergence of secondary liquidity on chain, and that’s a key enabler. So for me, that’s one of the key developments for next year,” McDermott added.
At present, the total valuation of the crypto ecosystem stands at $1.602 trillion, marking a significant recovery over the past month. Bitcoin, the leading cryptocurrency, currently exchanges hands at $42,082, having experienced a slight 1% decline from the previous day.
Indeed, the winds of change are sweeping through the market, heralding new avenues for growth and accessibility in the world of digital assets. As the fabric of financial transactions evolves, individuals and institutions alike are watching the horizon with expectant eyes, ready to embrace the digital currency revolution that is steadfastly taking shape.
