Summary:

• Goldman Sachs observed a significant rise in interest in cryptocurrencies from hedge fund clients ahead of the Bitcoin halving event.

•The bank is expanding its client base to include asset managers and digital asset companies, with Bitcoin derivatives becoming a major focus.

•Historical data shows that the value of Bitcoin may surge after the halving, with the stock-to-flow model predicting that its price will rise to $130,000.

With Bitcoin’s upcoming halving event, investor sentiment has changed significantly. Goldman Sachs, for example, has witnessed strong interest in the cryptocurrency market from its hedge fund clients.

This renewed enthusiasm is not limited to speculative individual investors, but also extends to sophisticated institutional investors.

Goldman Sachs investors want to bet on Bitcoin

Max Minton, Goldman Sachs’ Asia-Pacific head of digital assets, said the approval of a Bitcoin exchange-traded fund (ETF) has reignited interest among the firm’s clients. Many of them are either actively investing in the cryptocurrency market or exploring the potential to do so.

"Last year was a relatively quiet year, but since the start of this year we have seen an increase in client interest in terms of entry, pipeline and volume," Minton said.

Goldman Sachs' current clients are primarily traditional hedge funds, which have generated most of the interest. Additionally, the agency is expanding its reach to cover diverse client segments. These clients include asset managers, its own banking clients and certain companies specializing in digital assets.

Minton mentioned that clients participate in cryptocurrency derivatives to make speculative predictions, enhance returns and hedge. He also pointed out that Bitcoin-related products continue to attract more attention from customers. However, the level of interest in Ethereum-related products may change based on the possible approval of a U.S. Ethereum ETF.

This renewed interest can also be attributed to the upcoming Bitcoin halving. The event is planned for late April, when Bitcoin mining rewards are halved, prompting miners to upgrade to more efficient technology to maintain profitability. Rewards will drop from the current 6.25 BTC to 3.125 BTC, a four-year update that is critical to maintaining Bitcoin’s economic model.

Following the 2012 halving, Bitcoin’s market capitalization surged by more than 8,000%. Likewise, following the 2016 halving, Bitcoin experienced over 1,400% growth in value. And after the 2020 halving, it saw an increase of over 700%.

Bitcoin inventory and flow model｜Source: Global X

While the stock-to-flow (S2F) model typically applied to commodities like gold has its flaws, it is one way to assess the value of Bitcoin. This model has shown historical correlation with Bitcoin price fluctuations. As Bitcoin becomes increasingly scarce, experts predict its value will rise from current prices.

Pedro Palandrani, a researcher at Global There is a correlation between the growth. According to the stock-to-flow model, BTC may increase to over $130,000 by 2028.”

From trading to blockchain innovation, Goldman Sachs’ involvement in the cryptocurrency market reflects broader institutional acceptance of digital assets. The bank’s positive stance on digital assets, coupled with growing client interest, represents a critical moment for the cryptocurrency market as the halving approaches.