Goldman Sachs held its digital assets 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 assets conference include:
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 philosophical aspects
Current main challenge is high volatility
Analogize to the maturing process of emerging markets and the relevance to internet prosperity
1.2 Has venture capital recovered to its peak period?
Investment pace is similar to before, and price drops present excellent investment opportunities based on reasonable valuations
Liquidity investments are also a good area
1.3 Why do altcoins perform poorly?
A large number of new token generation events (TGEs) lead 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 a large market share
1.4 Predictions and exciting areas: TON was mentioned by every speaker
Dan:
Combining blockchain with AI in the traceability and AI model/computing decentralization field
TON has a huge 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 ID 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: reduces costs, increases efficiency, and provides a 24/7 market. For example, Securitize’s BUIDL
Bitcoin ETF
2.2 What are the key challenges in the current industry?
Compliance: Staking is still complex in terms of reporting and tax calculations
Complexity: Staking can still be confusing for investors
User experience: ETF is 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 is still complex, and abstraction is key
3. Beyond ETFs: What lies ahead for cryptocurrencies?
Gautam – Brevan Howard Digital
Naeem – Coinbase
Chris Zuehlke – Cumberland
Hunter Horsley – Bitwise
3.1 Will there be more cryptocurrency ETFs other than Bitcoin and Ethereum?
Solana and TON blockchains do have different products compared to Bitcoin and Ethereum, so it’s not just Bitcoin and Ethereum ETFs
Index funds could be the long-term solution for the next wave of cryptocurrency ETFs
3.2 Looking back, what were the surprises with Bitcoin ETFs? What were the secondary effects?
Coinbase’s survey projected that the asset under management for a US BTC ETF would reach $10 billion in the year prior to its launch, but the outcome exceeded expectations
The adoption speed by investors and advisors was surprising compared to GLD
The influx of retail and high-net-worth 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 derivatives trading dominating price trends
3.3 How has the market dynamics changed after ETFs?
Increased liquidity during US trading hours
Trading volume during US trading hours increased by 3-4 times, accounting for 50% of the total volume
Derivatives trading started to dominate price trends
3.4 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
Counterparty/credit risk has been addressed
3.5 What phase are we in?
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 clear than before
We need a clear regulatory framework
A clear regulatory framework can promote innovation and enhance US competitiveness
3.7 Best and worst case scenarios by the end of the year:
Best case:
Birth of a super app that attracts millions of users
Institutional adoption
Worst case:
Lack of motivation and bad reputation
Talent flow towards the AI field
4. Ownership network: How can a billion people 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 fundamentally different from the real world structure, just more advanced
DeFi is now one of the largest central banks with a total locked value (TVL) of $100 billion
DAOs could 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 Facebook, Instagram, or TikTok to acquire users
4.3 Current challenges for Web3 games
Many crypto games are still restricted by mainstream platforms like Apple or Steam and need to disable NFT functionality in games
Another option is to build games on Telegram’s blockchain, benefiting developers and tapping into Telegram’s large user base
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 collaborate with Securitize for money market fund tokenization?
Created a new distribution channel
It is an efficient asset
Provides a way for the crypto industry to obtain risk-free rates of return 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 invests in companies they can collaborate with
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 proof of concept (PoC)
Super apps in the crypto space
Asset management will be a surprise.
