Why Goldman Sachs Remains Bullish on Bitcoin Amid $60,000 Dip

Goldman Sachs says Bitcoin continues to bounce back even after the price dropped to $60,000. The investment giant's head of digital assets, Matthew McDermott, revealed the dramatic change.

Now, many institutional investors, previously led by retail investors, are entering the crypto market.

Why Goldman Sachs is Bullish on Bitcoin

At the Digital Asset Summit in London, McDermott shed light on the changing tide of investment. While the price of Bitcoin recently dropped from $73,798 to around $63,000, institutional demand has increased. This interest is reflected in the volatility of Bitcoin exchange-traded funds (ETFs).

Early January saw the launch of spot Bitcoin ETFs, marking a turning point. McDermott referred to this as a “psychological shift” in investor sentiment.

In the year Since launching its crypto trading desk in 2021, Goldman Sachs has been a key player in the field of digital assets. This reflects the growing institutional interest in cryptocurrency. Despite market volatility, McDermott has seen significant changes in client profiles and investment volumes.

“Price action is still primarily driven by retailers. But what we're starting to see are institutions coming in.” McDermott said.

Initially, these ETFs attracted significant capital, totaling $11.7 billion. However, recent data shows that enthusiasm is waning, with major ETFs For example, on Tuesday, there were approximately $326.2 million in net outflows from Bitcoin ETFs.

Read more: 7 Best Crypto Exchanges in the US for Bitcoin (BTC) Trading

Notably, BlackRock's spot Bitcoin ETF only recorded $75.2 million in revenue, while Fidelity's ETF saw $39.6 million. Other ETFs had little or no revenue, with Greyscale's GBTC experiencing $443.5 million in outflows.

Amid the pullback, bitcoin prices briefly touched the $60,500 level on Wednesday. This resulted in more than $430 million in withdrawals in the last 24 hours.

The recent behavior of these EFAs with volatile income flows and high outflows suggests a cautious stance among investors. This caution stems from broader economic uncertainty, including debates over the Federal Reserve's interest rate policies.