Get Ready, Goldman Sachs Plans to Launch the World's First Crypto ETF
Jakarta, CNBC Indonesia - Goldman Sachs, through its asset management division, plans to launch the first crypto exchange-traded fund (ETF) product in the coming months. This plan was revealed through a document filing with the U.S. Securities and Exchange Commission on Tuesday local time.
According to Reuters, the ETF is designed to provide exposure to Bitcoin prices while generating additional income from bitcoin options transactions. The launch comes just days after its rival, Morgan Stanley, introduced a similar product, the Morgan Stanley Bitcoin Trust ETF.
The moves by these two major banks come amid challenging crypto market conditions in recent months. A decline in risk appetite has been triggered by volatility in precious metals, tech stock sell-offs, and geopolitical conflicts involving the US, Israel, and Iran.
Morningstar ETF analyst Bryan Armour believes the additional income from options could be an attraction, but the product remains risky. According to him, high volatility and potential price declines still pose obstacles for investors.
In the document, Goldman did not disclose the fee amount for this new ETF. The product is estimated to begin launching by the end of June.
Bitcoin’s price itself has fallen nearly 15% throughout this year to US$74,591. That position is also still around 40% below the all-time high of US$126,223 reached in October.
Although the assets under management for crypto ETFs continue to grow, the pace is relatively slower and fluctuating. ETF.com data shows products like the Grayscale Bitcoin Covered Call ETF and Global X Bitcoin Covered Call ETF recorded net outflows in the last three months.
Goldman Sachs Asset Management declined to comment on the filing. This ETF becomes the first product filed after Goldman completed a US$2 billion acquisition of Innovator Capital Management earlier this month.
Innovator is known as a pioneer in developing options-based ETFs to determine investment outcomes or generate income. The company also launched the first buffer ETF in the United States in 2018.