According to a recent report by Goldman Sachs, 2023 saw significant institutional support for the cryptocurrency industry, especially derivatives trading.
The cryptocurrency industry has been looking for institutional support since its inception. Given that the cryptocurrency industry has operated on the fringes of traditional finance for years, institutional support would bring greater financial benefits and public appreciation. Well, according to Goldman Sachs, 2023 has seen significant progress in the institutionalization of the cryptocurrency industry.
Goldman Sachs has said that in 2023 it will develop regulated derivatives and the platforms it will offer to sell them. The most notable are Coinbase Derivatives, CBOE and Eurex, according to the report.
It also shows that Bitcoin and Ether options trading has not been particularly prominent in the first nine months of the year. On the other hand, ether is known to lag behind bitcoin, which accounts for 20-50% of future bitcoin transactions. The futures trading markets for the two largest cryptocurrencies have not been good, but they have not been good.
But in the fourth quarter, Goldman Sachs noted that "Bitcoin (BTC) and Ether (ETH) futures and options trading was the leading BTC futures exchange in terms of continued growth and open interest in the fourth quarter."
As a result, open interest in Bitcoin exceeded $4 billion in the fourth quarter alone. This sudden surge in institutional interest in options and futures trading is due to the potential adoption of the Bitcoin Spot ETF. For years, companies in the cryptocurrency industry have tried to get ETF approval from the US Securities and Exchange Commission, but have been denied.
But now the industry is counting on the adoption of the BlackRock ETF application. If so, that means more investment opportunities for those interested in crypto. BlackRock is likely to launch an Ether ETF and a Bitcoin ETF.
Given all this speculation, many institutional investors have shown more interest in trading derivatives. In this case, they are required to use ETF approval. We won't know if the ETF will be approved until 2024, but the effects are already being felt. It also shows how important Bitcoin is to the ETF industry and the growth it could bring if it pays off.
In 2024, we can expect a larger futures market, partly due to unchanged expectations for various ETFs. And unlike 2023, there will be no sudden investment at the end of the year, but the markets will continue to develop from the beginning.
But from what we have seen, the crypto industry has unprecedented institutional support, which will be of great importance to its longevity.