Goldman Sachs held its digital asset conference in London on June 27, discussing topics such as institutional focus areas, tokenization, the crypto market, and investor perspectives.
Some commonly heard terms at the Goldman Sachs digital asset conference included:
TON
Tokenization
ETF
User Experience (UX)
Regulation
Here is a brief summary of some interesting topics discussed:
1. The Next Wave of Digital Asset Investments
Dan Pantera – Pantera Capital
Rich Galvin – Digital Asset Capital Management
Joseph Naggar – Republic Digital
Rview from HK – Animoca
1.1 How to sell cryptocurrencies to traditional financial investors:
Similar to other asset classes, but don’t focus on the philosophical aspect
The main challenge currently is high volatility
Analogies to the maturation process of emerging markets and the relevance to the internet boom
1.2 Has venture capital recovered to its heyday?
Investment pace is similar to before, and price drops present excellent opportunities for value investing
Liquidity investments are also a good area
1.3 Why have altcoins performed poorly?
The large number of Token Generation Events (TGEs) has led to capital rotation
Regulation will determine long-term winners and losers
The valuation of the entire crypto market is similar to the S&P 500 index, with top assets occupying most of the market share
1.4 Predictions and exciting areas: Every speaker mentioned TON
Dan: Blockchain combined with AI in the traceability and AI model/computation decentralization field
TON has a large existing user base
Ricard: AI and consumer-facing interfaces
What we need is to attract more users by abstracting complexity. Telegram is a good example
Joseph: TON/Near/Bittensor/Bitcoin smart contracts
Robby: ZKP for decentralized IDs and powerful distributed blockchains like TON
2. Technologies supporting the foundation of digital assets
Konstantin – BlockdaemonHQ
Yuval Rooz – Digital Asset Holdings
Aaron Schnarch – Anchorage
Tim Rice – Coinmetrics
2.1 Areas where blockchain demonstrates its capabilities in the real world:
Tokenization: lower costs, higher efficiency, and 24/7 markets. Examples include Securitize’s BUIDL
Bitcoin ETF
2.2 What are the key challenges in the industry currently?
Compliance: Staking remains complex in terms of reporting and tax calculations
Complexity: Staking may still be confusing for investors
User experience: ETFs are a good example, simplifying investment by abstracting the custody part
2.3 Is staking the next trend for institutions?
Institutions will start participating in decentralized networks, such as running nodes or validating networks. However, regulations are still not fully certain
Staking remains complex, and abstraction is key
3. After ETFs: Where does the future of cryptocurrencies lie?
Gautam – Brevan Howard Digital
Naeem – Coinbase
Chris Zuehlke – Cumberland
Hunter Horsley – Bitwise
3.1 Will there be more cryptocurrency ETFs besides Bitcoin and Ethereum?
Solana and TON blockchain indeed have different products from Bitcoin and Ethereum, so it’s not just Bitcoin and Ethereum ETFs
Index funds may be the enduring long-term solution for the next wave of cryptocurrency ETFs
3.2 Looking back, what were the surprises with Bitcoin ETFs? What are the secondary effects?
Coinbase’s survey projected that the assets under management of a US BTC ETF in the year leading up to its launch would reach $10 billion, but the results exceeded expectations
The adoption speed by investors and advisors was surprising compared to GLD
The influx of retail and wealthy individual investors surprised them as institutions have not fully entered yet
The next wave could be pension and endowment funds
The secondary effects could be the acceptance speed of tokenized investors and
3.3 How has the market dynamics changed after ETFs?
Deeper liquidity during US trading hours
3-4 times increase in trading volume during US trading hours, accounting for 50% of total volume
Derivative trading starting to dominate price movements
3.4 What are the other catalysts for Bitcoin price movements besides ETFs?
Regulatory changes
Interest rates
Innovations shown at the base layer with Ordinals/BRC-20s
BitVM and other Bitcoin scaling solutions
Credit/counterparty risk has faded
3.5 Where are we in the cycle?
The technology is ready for the golden age. L2 and other L1s like Solana have reduced transaction costs
Institutions will adopt some blue-chip DeFi protocols to build their own solutions
3.6 How does the US election affect cryptocurrencies?
The crypto agenda is more explicit than before
We need a clear regulatory framework
A clear regulatory framework can foster innovation and enhance the competitiveness of the US
3.7 Best and worst-case scenarios by the end of the year:
Best case:
The birth of a super app that attracts millions of users
Institutions going on-chain
Worst case:
Lack of motivation and bad reputation
Talent flowing into the AI field
4. Ownership Networks: How a Billion People Can Change Capitalism and Financial Markets through Web3
A photo of Yat displayed at the Goldman Sachs office
Photo by @Moca_Network
4.1 Cryptocurrencies are not significantly different from real-world structures, just more advanced
DeFi is now one of the largest central banks with a total locked value (TVL) of $100 billion
DAOs may be the future organizational structure
4.2 How cryptocurrencies help the gaming industry
NFTs allow users to own a part of the internet
In-game currency = tokens
Skins = NFTs
Historically, most funds raised by game studios were used for advertising on platforms like Facebook, Instagram, or TikTok to acquire users
4.3 Current challenges for Web3 games
Many crypto games are still limited by mainstream platforms like Apple or Steam, which require disabling NFT functionality in games
Another option is building games on the Telegram blockchain, benefiting from the large user base of Telegram
5. Institutional Focus: What aspects of digital assets do they care about?
Tony Ashraf – BlackRock
Geoff Kendrick – Standard Chartered Bank
Russell Barlow – Abrdn
5.1 Why are money market funds tokenization important for cryptocurrencies?
Income-generating assets are high-quality collateral
Stablecoins have no yield and may have potential counterparty risks
It is a more efficient asset compared to non-yielding cash
5.2 Why did BlackRock choose to tokenize money market funds with Securitize?
Created a new distribution channel
It is an efficient asset
Provides a way for the crypto industry to earn risk-free rates without leaving the blockchain
5.3 What strategic investments has your company made?
Russell (Abrdn):
Providing infrastructure for 24/7 trading
Working closely with Hedera, running nodes, and participating in the governance council
Geoff (Standard Chartered Bank):
Zodia Custody
Tony (BlackRock):
BlackRock has invested in companies that can collaborate
Securitization to help distribute tokenized funds
JPM/Coinbase/BNY, etc.
5.4 What is the biggest opportunity? Cryptocurrencies, custody, asset management, or tokenization?
Cryptocurrencies will dominate. Tokenization will also, but we need to move beyond the proof-of-concept (PoC)
Super apps in the crypto space
Asset management will be a surprise