The Future of Digital Assets and Blockchain Technology
In a recent interview with Fox Business, Mathew McDermott, the head of digital assets at Goldman Sachs, shared his thoughts on the growing involvement of traditional financial institutions in the digital assets space. This trend is driven by a recognition of the potential for digital assets to create efficiencies and reduce risks, aided by improved regulatory clarity worldwide.
Broad Acceptance of Digital Assets
According to McDermott, the digital assets market has reached a stage where the technology’s efficacy is broadly accepted, allowing for a shift to building out and scaling the technology. This development is crucial for realizing the commercial value proposition of digital assets.
Anticipated Advancements in Tokenization
McDermott anticipates significant advancements in tokenization and the development of marketplaces, particularly in the context of investor adoption. He expects the emergence of secondary liquidity on blockchain platforms to be a key driver of this trend, facilitating scale adoption, especially among buy-side investors.
Enhancing Collateral Mobility
Moving forward, McDermott foresees growth in enhancing collateral mobility by addressing inefficiencies in the financial market’s infrastructure. Blockchain technology adoption is expected to reveal immediate commercial benefits, including reduced risks and improved operational settlement.
Potential Impact of Spot ETFs Approval
McDermott discussed the potential impact of the approval of spot exchange-traded funds (ETFs) for Bitcoin and Ethereum, which the Securities and Exchange Commission is currently considering. Approval could attract more institutional investors to the digital assets market, broadening and deepening market liquidity by creating institutional products accessible to entities like pension funds and insurers.
Gradual Increase in Liquidity and Interest
McDermott does not expect an immediate major change in the marketplace following the approval of spot cryptocurrency ETFs. However, he predicts a gradual increase in liquidity and interest in these products throughout the year, with growth initially focused on more traditional asset classes, gradually expanding to more opaque asset classes later in the year and beyond.
Hot Take
Mathew McDermott from Goldman Sachs shared insights on the growing involvement of traditional financial institutions in and the future of digital assets and blockchain technology.
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