Crypto ETF Approvals Poised to Revolutionize Institutional Adoption

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1 Jan 2024

Crypto ETF approvals could attract a portion of the $5.6 trillion US pension market to crypto.

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The approval of exchange-traded funds (ETFs) for spot Bitcoin and Ethereum will unlock “the universe of the pensions, insurers, etc,” says Mathew McDermott, global head of digital assets at investment banking giant Goldman Sachs.
In an interview with FOX Business, McDermott discussed the future impact of spot ETF approval on institutional adoption and commercial opportunities within the digital asset sector.
According to McDermott, spot crypto ETFs will create “institutional products that can be traded by institutions that don’t need to touch the base assets.” This will enhance liquidity and attract more pension funds, insurance firms, and other institutional investors to crypto.

With the US pension market now over $5.6 trillion, it’s easy to see why McDermott envisions spot crypto ETFs attracting institutional capital. The approval of such products would enable more institutional participation in the digital asset space.
McDermott noted that while spot crypto ETFs may have a gradual impact rather than an immediate spike, he expects to see “a broadening and a deepening of liquidity and those looking to trade the product” in 2023.

The Growth Potential in Digital Assets

Looking ahead to 2024, McDermott believes the blockchain industry will continue expanding due to increasing real-world adoption and supportive regulations. Over the past year, clearer policies and frameworks have already driven more institutional involvement in crypto.
Earlier this year, Goldman Sachs announced the launch of its tokenization platform, GS DAP, to streamline the issuance, management, and trading of tokenized assets across various asset classes.
In 2020, Matthew McDermott joined Goldman as head of digital assets. Known for his visionary approach to financial markets, he believes blockchain technology is key to revitalizing and empowering the financial system.