Goldman Sachs Enters Bitcoin Market: Risks and Opportunities Lie Ahead
According to media reports, Goldman Sachs launched a Bitcoin price-linked non-deliverable forward (NDF) Trading on May 6 local time. The non-deliverable forward Trading allows investors to speculate on Bitcoin's future price with cash settlement, typically a short-term forward contract. This event shows Goldman Sachs is further entering the currently red-hot Bitcoin market, providing a new method for more professional investors to participate in Bitcoin. In fact, Goldman Sachs' internal crypto assets Trading team was established long ago. According to a internal memo from Goldman Sachs partner Rajesh Benkataramani, he had assembled a Trading team primarily responsible for buying and selling various world currencies and emerging market assets as early as 2018. However, for some unknown reason, there has been no news about the team's investment activities over the years.
Therefore, the news of Goldman Sachs launching a Bitcoin Trading product unsurprisingly garnered widespread external attention. After Bitcoin has been oscillating at high levels for over a month, what signal does the entry of another Wall Street traditional financial giant release?
On another note, let's take a look at Bitcoin's recent price action. Since testing the 120-day moving average support on April 26, Bitcoin rallied to approach the $60,000 level. However, in the early hours of May 11 (Hong Kong time), it briefly dropped nearly 10%, falling below $54,000 at one point, before stabilizing and recovering. According to OKX market data, as of the time of writing, Bitcoin is currently trading at $57,800.
Bitcoin Price, Source: OKX
When observing Bitcoin's price charts, we also need to gain insight into the factors behind the chart movements. Because the price trends we see are ultimately the result of the tug-of-war between bulls and bears in the secondary market. In other words, whether Bitcoin's price rises or falls, it is merely the "effect." Only by looking through price fluctuations to find the "causes" that influence them can we better guide our understanding of future market trends.
Next, this article will explore the potential future development trends of the crypto assets market from both macroeconomic global market changes and on-chain data changes, covering macro and micro dimensions respectively.
At the macro level, the central banks and regulators of sovereign nations, represented by the Federal Reserve and the U.S. SEC, are two key areas that cannot be ignored. The former is the "water tap" of the global currency market, and its policy tightening or loosening determines the volume of liquid funds in the global capital market in the medium to short term. The latter is increasingly playing the role of "night watchman" in the crypto market, and its every move triggers chain reactions that cannot be underestimated in the crypto market.
The Federal Reserve Continues "Printing Money," Inflation Expectations Remain Unchanged
On the evening of January 14 local time, before officially taking office, U.S. President Biden announced a $1.9 trillion stimulus plan via televised address. $1.9 trillion, equivalent to approximately 12.3 trillion RMB — what does that mean? Hong Kong's domestic and foreign currency deposit balance in November last year was 12.2 trillion RMB. Simply put, the massive amount the U.S. allocated this time is equivalent to taking all of Hong Kong's money and using it to bailout America. Specifically, in this relief plan, approximately $415 billion will be used to address the COVID-19 pandemic and support vaccination efforts; approximately $440 billion will go to small businesses and communities affected by the pandemic; approximately $1 trillion will go directly to household relief. In other words, about 53% of the $1.9 trillion did not enter the production sector but directly became real consumer/investment funds.
The money printing has not ended.
Just two months later, following the $1.9 trillion stimulus plan, Biden proposed another large-scale spending proposal at the end of March, unveiling a $2.25 trillion infrastructure and employment support package. Combined with subsequent legislation including expanded healthcare coverage and child tax credits, the total scale of money printing across all legislation exceeds $4 trillion.
The same scene is unfolding in Europe. According to Sina Finance, on the evening of December 10, 2020 (Hong Kong time), the European Central Bank announced its interest rate decision and latest monetary policy. The ECB kept its three key interest rates unchanged while increasing its emergency pandemic purchase program by €500 billion to €1.85 trillion, extending it by at least 9 months to the end of March 2022. In other words, €1.85 trillion in funds will flow into the market before March 2022.
Under the deluge of liquidity, the global investment market has given the most intuitive response. In traditional financial markets, the S&P 500 Index, Nasdaq 100 Index, Dow Jones Index, and Euro Stoxx 50 Index all repeatedly hit new highs in 2021.
Dow Jones Industrial Average, Source: Investing
According to the latest data from a third-party research firm, approximately 37% of U.S. retail investors plan to invest $170 billion worth of relief funds directly into the stock market. During the same period, Bitcoin's performance was equally strong, surging from $28,320 to break through multiple round numbers, reaching an all-time high of $64,846.9, a gain of 129.7%.
On the other hand, the market is also closely watching inflation data. Before the March FOMC meeting, the U.S. 10-year Treasury yield once broke through 1.7%, causing a short-term drop in U.S. stocks. Federal Reserve officials quickly stepped in to reassure the market, stating that the rise in the 10-year Treasury yield reflects economic recovery and that the accommodative monetary policy would not change in the short term. Powell also stated that inflation will surge significantly in the coming months, but that alone would not be enough to prompt the Federal Reserve to raise interest rates. Inflation expectations remain firmly anchored at around 2%. This statement alleviated market concerns about monetary policy shifts to some extent.
Compared to the Federal Reserve, this "god of wealth," the SEC is much more cautious. Recently, SEC commissioners reminded investors again: they should remain cautious about mutual fund companies with Bitcoin futures risk exposure, calling Bitcoin "a highly speculative investment."
Since the SEC holds approval authority over all Bitcoin ETFs in the United States, some investors have become pessimistic about Bitcoin ETF approvals following the SEC's risk warnings. However, some analysts remain unfazed. For example, Eric Balchunas, a senior intelligence ETF analyst at Bloomberg, stated that a U.S. Bitcoin ETF could be listed in 2021. There is no conflict between the SEC commissioners' risk warnings and the SEC approving Bitcoin ETF listings — both essentially aim to strengthen oversight of the Bitcoin market.
Traditional Financial Institutions Accelerate Bitcoin Deployment, Off-Exchange Investor Enthusiasm Rises
Since Bitcoin's debut in 2009, traditional financial giants represented by Wall Street heavyweights have largely taken a wait-and-see or avoidance approach for a long time. At least in the previous bull market, we still rarely saw large institutional investors. However, this has changed significantly in this bull market.
In addition to Goldman Sachs mentioned at the beginning, in March of this year, Morgan Stanley became the first major U.S. bank to offer Bitcoin fund services to its wealth management clients. JPMorgan followed closely, announcing in April its first plan to offer an actively managed Bitcoin fund to wealth management clients.
Bank of New York Mellon also established a new division in February to help clients hold, transfer, and issue digital assets. The world's largest asset management company, BlackRock Inc., has also included Bitcoin in the eligible investment categories of two of its funds.
This may not be an isolated event. Once a chain reaction begins, more and more traditional financial institutions may enter the market in the future, offering their users more diverse crypto assets investment services.
Looking at off-exchange investor growth data, it seems to provide justification for these traditional financial institutions to enter. A survey conducted by the New York Digital Investment Group (NYDIG) shows that approximately 46 million Americans currently hold Bitcoin, which is equivalent to 17% of the U.S. adult population. Some of them want to integrate cryptocurrency into their personal financial plans, including life insurance. Approximately 75% of respondents said they want to learn more about Bitcoin annuities and Bitcoin life insurance. 53% of respondents said they do not currently hold digital assets, but 55% said they would consider adding cryptocurrency to their investment portfolio. Additionally, approximately half of respondents said they would like to receive some or all of their insurance benefits in the form of Bitcoin; nearly 90% said they would be interested in insurance or annuity products with at least some indirect connection to Bitcoin.
Exchange Bitcoin Balances Slowly Recover, Whale Count Begins to Decline
Net outflows of Bitcoin from exchange addresses are often interpreted as investors accumulating coins and being bullish on future行情, while reverse flows are typically interpreted as investors being bearish on future prospects and intending to sell and cash out in the secondary market. According to bybt monitoring data, over the past month, Bitcoin balances in exchange addresses have shown a slow growth trend, increasing from 1.82 million coins on April 20 to 1.86 million coins on May 12.
Exchange Address Bitcoin Balance, Source: bybt
Meanwhile, according to Glassnode data, the number of addresses holding more than 1,000 Bitcoin has also declined noticeably recently, dropping from 2,488 addresses on April 26 to 2,181 addresses on May 11. This timing roughly coincides with the increase in exchange Bitcoin balances. Based on this, it can be inferred that over the past half month, some whales have begun transferring their Bitcoin to exchanges to cash out.
Number of Whales Holding More Than 1,000 Bitcoin, Source: Glassnode
At the same time, we have also observed that corresponding to the decline in whale addresses, the number of Bitcoin addresses with non-zero balances continues to maintain a steep growth trajectory. According to Glassnode statistics, there are currently 37.63 million addresses holding more than 0 Bitcoin. This may confirm the fact that off-exchange investors are accelerating their entry into the market.
Bitcoin Non-Zero Address Count, Source: Glassnode
Overall, the current Bitcoin market remains in a phase of tug-of-war between bulls and bears, with divergences intensifying. For ordinary investors, risk management should still be the top priority. In this highly volatile crypto assets market, Buffett's investment principle — "Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1" — is especially important.
Disclaimer
This article may contain product content not applicable to your region. This article is only intended to provide general information and does not make any warranty as to any factual errors or omissions. This article represents the author's personal views only and does not represent the views of OKX. This article is not intended to provide any advice, including but not limited to: (i) investment advice or investment recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. Holding digital assets (including stablecoins) involves a high degree of risk and may fluctuate significantly or even become worthless. You should carefully consider whether trading or holding digital assets is appropriate for you based on your financial situation. For questions specific to your circumstances, please consult your legal/tax/investment professionals. The information contained in this article (including market data and statistics, where applicable) is provided for general reference purposes only. Although we have taken all reasonable precautions in preparing such data and charts, we accept no liability for any factual errors or omissions expressed herein. © 2025 OKX. This article may be reproduced or distributed in its entirety, or excerpts of 100 words or less may be used, provided that such use is non-commercial in nature. Any reproduction or distribution of the full article must prominently state: "This article is copyrighted © 2025 OKX, used with permission." Permitted excerpts must cite the article title and include attribution, for example: "Article title, [author name (if applicable)], © 2025 OKX." Some content may have been generated or assisted by artificial intelligence (AI) tools. Derivative works and other uses of this article are not permitted.
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