Goldman Sachs launches Bitcoin-related financial product
Goldman Sachs has repeatedly stood out recently for its bullish stance. Now the investment bankers are offering their clients another gateway into the Bitcoin world.
A planned financial product by Goldman Sachs has the potential to allow clients of the big bank to invest indirectly in Bitcoin. The financial institution filed the Crypto Engine corresponding application with the US Securities and Exchange Commission (SEC) on 19 March.
The financial product is a so-called „linked note“. Such bonds are linked to other financial products – in this case an ETF. Interestingly, the Goldman Sachs note is linked to the ARK Innovation ETF, of all things, a fund that is intertwined with the Bitcoin economy.
An ETF for „disruptive innovation“
The Ark Innovation ETF (trading symbol: ARKK) has been in existence since 2013. The stated aim of the actively managed exchange-traded fund is to invest in technologies and companies with disruptive potential. For example, the ETF is interested in the energy sector, genetic engineering, artificial intelligence and also FinTechs and cryptocurrencies. Goldman Sachs‘ SEC filing states:
The ETF may have exposure to cryptocurrencies such as Bitcoin, indirectly through an investment in a grantor trust. The ETF’s exposure to cryptocurrencies may change over time and, accordingly, such exposure may not always be represented in the ETF’s portfolio.
What sounds like a purely hypothetical crypto exposure actually has a hand and foot. According to media reports, Ark Innovation holds shares in Grayscale. The world’s largest digital asset manager has a record amount of BTC in its Bitcoin Trust. Owners of the Goldman Sachs note thus profit from the crypto economy in a roundabout way.
Goldman Sachs sets its sights on Bitcoin
That the entry into the Bitcoin business is one of the motives for issuing the note cannot be denied. After all, no fully-fledged Bitcoin ETF has yet seen the light of day in the USA. Despite a considerable amount of applications, none of the proposed BTC exchange-traded funds have yet received approval from the SEC.
In this situation, Goldman Sachs has found a creative way to profit from rising Bitcoin prices on the exchange. The investment bank’s chief operating officer John Waldron recently proved that it is one of the proponents of cryptocurrency No. 1. In an interview, Waldron not only attested to an increased interest in Bitcoin among his own clients, he also promised to accommodate them. Since the beginning of March, Goldman Sachs clients have once again been able to trade BTC derivatives via the bank’s trading desk.
The recent attitude of Goldman Sachs is symptomatic of a general Bitcoin adoption among institutional investors. Morgan Stanley also announced its entry into the Bitcoin business last week. The major bank wants to enable its clients to invest in BTC funds. For this purpose, it is working together with the crypto company Galaxy Digital.