TLDR
- During Q4 2024, Goldman Sachs made substantial advancements in their Bitcoin ETF investments, growing them to $1.5 billion, with $1.27 billion in IBIT, reflecting an 88% increase, and $288 million in FBTC, indicating a 105% surge.
- The bank has secured an array of options amounting to $760 million, which includes a diverse mix of puts and calls through IBIT and FBTC.
- Goldman Sachs increased their stake in Ethereum, reaching $476.5 million, allocated between Fidelity’s FETH and BlackRock’s ETHA.
- Bitcoin surged to an unprecedented peak of $109,000 in the days leading up to the U.S. Presidential inauguration.
- CEO David Solomon asserts that Bitcoin does not undermine the supremacy of the U.S. dollar and underscores the necessity for regulatory evolution.
The investment banking giant Goldman Sachs has broadened its foothold in the realm of digital currencies by augmenting its Bitcoin ETF holdings. By the close of 2024's fourth quarter, Goldman Sachs has escalated its Bitcoin ETF investments to $1.5 billion, underscoring a 121.1% rise from the previous quarter's $710 million.
Goldman's most extensive investment is in BlackRock’s iShares Bitcoin Trust (IBIT), where they possess 24.07 million shares equating to a valuation of $1.27 billion, marking an 88% upturn from last quarter.
Their engagement in Fidelity’s Wise Origin Bitcoin Fund (FBTC) intensified by 105%, culminating at $288 million. Furthermore, they continue to hold a modest $3.6 million in Grayscale’s Bitcoin Trust (GBTC).
Beyond direct ETF holdings, Goldman Sachs has formed a notable stance in options trading with positions summing up to $760 million. These include a put position worth $527 million via IBIT, a different $84 million put via FBTC, and a call position amounting to $157 million through IBIT.
Goldman's crypto portfolio now showcases Ethereum investments valuing $476.5 million, reflecting a tremendous leap from $25.1 million the prior quarter, with holdings split as $234.7 million in Fidelity’s FETH and $235.5 million in BlackRock’s ETHA.
Amid its expansion in crypto holdings, Goldman Sachs has liquidated smaller ventures in various other Bitcoin ETFs, such as ARK 21Shares’ ARKB, Bitwise’s BITB, and WisdomTree’s BTCW.
The rise in Goldman’s crypto investments aligns with Bitcoin's performance, which climbed to a historic $109,000 before the U.S. Presidential inauguration, boasting a 40.6% appreciation over the quarter.
David Solomon, leading Goldman Sachs, maintains a prudent view of cryptocurrencies, recently affirming that Bitcoin doesn't jeopardize the prominence of the U.S. dollar, seeing it more as a speculative venture.
Even though Goldman is advancing its infrastructure around digital currencies, Solomon points out that regulatory reform is essential before engaging in direct trading of Bitcoin and Ethereum.
Goldman’s amplified interest in cryptocurrencies coincides with widespread market trends, with a resurgence in market interest post-U.S. Presidential election and Bitcoin’s growth driven by rising institutional participation.
The SEC is deliberating over new proposals that might affect the ETF landscape, including BlackRock's idea for in-kind ETF redemptions, allowing direct Bitcoin transfers to authorized participants instead of monetary exchange during redemptions. Bitcoin Market analysis shows Bitcoin has experienced a robust upward trajectory, but other cryptocurrencies haven't matched its performance, with Ethereum lagging and marking a 13.8% decrease in value against Bitcoin over the past month, hitting a four-year low.
Goldman’s investment approach encompasses both defensive and opportunistic positions within options trading, where put options hedge against potential downturns, and call options exploit potential upward market movements. Ethereum’s These investment activities are documented in Goldman’s mandatory 13F reports, required by the SEC for institutional managers managing over $100 million in equities.
Goldman’s asset valuations are swayed by the fluctuations in Bitcoin and Ethereum prices. While Bitcoin surged by 40.6%, Ethereum saw a 26.2% rise from the beginning to the end of Q4, as reported by CoinGecko.
Maisie has significant experience in journalism covering finance and cryptocurrency news, having contributed to outlets like Moneycheck.com, level-up-casino-app.com, and Computing.net, and acts as the Editor in Chief at Blockfresh.com.
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