In a recent report, the head of digital assets at Goldman Sachs, Mathew McDermott, expressed his bullish stance on the future of digital assets. The executive anticipates that the crypto sector will experience exciting growth by next year.
He recognized the remarkable efforts made by the developers to create cutting-edge applications within the blockchain ecosystem.
With the ongoing development in the crypto sector, McDermott anticipates that regulators will develop policies supporting emerging technologies in various industries.
Goldman Sachs Officials Predict Mainstream Adoption of Crypto
Speaking exclusively at the Fox Interview, McDermott recognized that the most significant achievement in the crypto sector was the adoption of digital assets in conventional financial institutions.
The integration of digital assets into traditional financial institutions has supported the mainstream adoption of crypto. With the changes in the financial sector, the executive stated that digital assets have improved the efficiencies in the delivery of services.
He admitted that the digital assets have supported redefining the business models to improve performance. In addition, McDermott acknowledged that the growing popularity of digital assets has obliged global regulators to develop comprehensive regulations for crypto.
He expected the approval of the spot Bitcoin exchange-traded funds (ETF) and Ethereum ETF to attract the interest of institutional clients.
Also, the official admitted that the regulators have focused on revising the regulations for digital assets for the past few months. After reviewing the growth of digital assets, McDermott noted that cryptocurrency and blockchain technologies were widely accepted.
The executive stated that digital assets have attained the desired growth stage where the key industry leaders focus on building and improving the scalability of these technologies.
Review of Recent Development in the Crypto Industry
He anticipates that by next year, digital assets will attain the maturity stage where the world will see the commercial value of cryptos. Besides the tremendous growth of the crypto sector, McDermott reviewed the benefits of tokenization of real-world assets (RWAs).
McDermott applauded the remarkable contribution made by financial institutions in tokenization of assets. He anticipates that more digital versions of traditional assets will be created by next year.
The executive envisions investors to slowly embrace tokenized assets to expand their revenue-generating schemes. McDermott anticipates that the ongoing development of the tokenization of assets will support the development of liquidities on the chain.
Significance of Tokenization of Assets
After analyzing the event in the crypto sector this year, McDermott admitted that the tokenization of assets was among the remarkable achievements in the digital space. The executive anticipates that the mass adoption of crypto assets will support the enhancement of collateral mobility that will address the challenges in the financial sector year-over-year.
The official admitted the collateral mobility sector was dominated by old technologies that led to inefficiencies in the financial infrastructures. McDermott noted that the shortcomings in collateral mobility have impacted custody fragmentation, deficiency in synchronization of settlements, and ineffective use of capital.
Also, McDermott anticipates that the collateral mobility challenges will be addressed after people attain the commercial value of digital assets. He added that with the adoption of digital assets, people are slowly seeing the commercial value of crypto.
Moreover, the executive noted that the commercial value of digital assets involves reduced operational settlement risks. Goldman Sachs officials anticipate that in 2024, the growth of digital assets will start with less complicated assets before being extended to the opaque assets group.
He admitted several types of investments are classified according to their distinct characteristics. Based on the nature of the assets, McDermott anticipates that towards the end of next year, more focus will be shifted towards the development of opaque asset types.
The official outlined the features of the opaque assets class, including the lack of transparency and insufficient liquidity. Despite the opaque nature of some assets, the executive believes that more buyers will join the crypto sector in 2024.