Despite its chief investment officer, Sharmin Mossavar-Rahmani, declaring that cryptocurrency is not an asset class, Goldman Sachs is quietly going all in on cryptocurrency investments. The news came to light in the latest quarterly filing of the financial giant, revealing a $418.65 million investment in Bitcoin spot ETFs.
“We do not think it is an investment asset class,” Mossavar-Rahmani said to the Wall Street Journal in April. “We’re not believers in crypto,” she said, adding that Bitcoin “creates absolutely no value in any shape or form.” (Of course, we know you could say the same about the U.S. dollar. Bitcoin has just as much real value as any fiat currency, with many added benefits. And it appears Goldman Sachs understands that too.
In fact, contrary to Mossavar-Rahmani’s claim, Goldman Sachs is now the third largest holder of BlackRock’s iShares Bitcoin Trust (IBIT), being the largest Bitcoin ETF on the market. Its shares of IBIT are worth $238.6 million, combined with $79.5 million worth of shares of Fidelity’s FBTC, $56.1 million in Invesco Galaxy’s Bitcoin ETF, $35.1 million in Grayscale’s Bitcoin fund, and a handful of smaller investments.
Clearly, somebody at Goldman Sachs sees the value of cryptocurrency and doesn’t want the opportunity it presents to slip by. And Goldman isn’t the only big bank recently revealed to be holding a big stake in crypto. Morgan Stanley showed in its filing that it holds $189 million in Bitcoin spot ETFs, while Bank of America has $5.3 million and HSBC is tiptoeing around the edges with $3.6 million.
Goldman Sachs is giving other strong signs that it is fully supporting cryptocurrency, including announcing in July that it will be launching three new tokenization products by the end of the year. Similarly, other banks are looking to capture some of the potential gains, including Morgan Stanley, who recently opened up investments into IBIT and FBTC for its clients with assets more than $1.5 million.
As each of these big institutional investors stakes a claim into cryptocurrency, it adds a layer of legitimacy to the industry as a whole. After all, investors with deep pockets are generally much more comfortable trusting well-recognized financial institutions that rely on established regulations before offering products to their customers.
More investors will come on board as a direct result of the investments financial intuitions are making into the industry, and as they do, the overall value of cryptocurrency will be lifted. While that won’t eliminate cryptocurrency’s characteristic volatility as a new form of currency, it will serve to stabilize its value gradually over time – a process that will be accelerated as more regulatory framework emerges in the US.
The writing is on the digital wall, and everyone, including the smartest of the smart money at Goldman Sachs and elsewhere, is taking their cue. Shouldn’t you do the same? Get started right now with a tax-advantaged cryptocurrency IRA by giving us a call at 800-299-1567 or sign up now online.
