Goldman Sachs has made significant moves in the cryptocurrency market, dramatically increasing its holdings in exchange-traded funds (ETFs) for both Ether and Bitcoin in the fourth quarter of 2024. The investment bank’s spot Ether ETF holdings surged by over 2,000%, reaching $476 million, while its Bitcoin ETF investments more than doubled to surpass $1.5 billion.
The firm expanded its Ether ETF exposure significantly, with investments in BlackRock’s iShares Ethereum Trust and the Fidelity Ethereum Fund, as well as the Grayscale Ethereum Trust ETF. The latest SEC filings reveal that Goldman Sachs now holds $234.7 million in Fidelity’s Ether ETF alone.
Meanwhile, Goldman Sachs increased its Bitcoin ETF holdings by 114%, with major purchases including nearly $1.28 billion in shares of the iShares Bitcoin Trust and $288 million in shares of the Fidelity Wise Origin Bitcoin Fund. As of the end of the fourth quarter, the market prices for Bitcoin and Ethereum saw rises of 41% and 26.3% respectively, contributing to the value of Goldman’s increased investments.
Despite these substantial investments, the bank appears to have divested from Bitcoin ETFs offered by other firms including Bitwise and WisdomTree, as well as partnerships involving Invesco and Galaxy, and ARK and 21Shares.
Goldman Sachs’ entry into the spot crypto ETF market began in the second quarter of 2024 with an initial purchase of $418 million in Bitcoin ETFs. The bank’s growing stake in cryptocurrency ETFs is part of a broader trend of institutional adoption in the financial sector, facilitated by a more favorable regulatory landscape.
However, this move contrasts with Goldman’s historical skepticism towards cryptocurrency. Despite recent investments, the firm has previously expressed doubts about the legitimacy of crypto as an asset class, likening recent market enthusiasm to historic economic bubbles. Nonetheless, Goldman Sachs is reportedly considering the launch of its own crypto platform to enable trading of financial instruments using blockchain technology, signaling a nuanced and evolving approach to the cryptocurrency space.
