64.3 F
Elizabeth City
Wednesday, June 16, 2021

Goldman Sachs Registers Proxy Bitcoin Investment Product

Must read

Key Takeaways

  • Goldman Sachs has announced an investment note with indirect exposure to Bitcoin.
  • The linked note will be based on the price of the Ark Innovation ETF which adds Bitcoin from time to time.
  • Besides institutions, the retail investment sector in the U.S. has seen an influx of many products with BTC allocation.

Goldman Sachs has launched a fixed-return note based on the Ark Innovation ETF’s performance, which has the liberty to allocate add Grayscale’s Bitcoin Trust shares. 

Goldman Sachs Dips Toe in Bitcoin 

Goldman Sachs announced the formal sale of $15.7 million shares of Coupon ETF-Linked Notes backed by ARKK’s performance in an SEC filing

The investment bank’s ETF-Linked Notes offers a discount of 4.1% at face value and a monthly return of 8.125% if Arkks’ ETF value does not fall below 60%. 

This means that for every $941 invested— after a 4.1% discount on $1,000—the note holder will receive $8.125 every month if the Arkk’s ETF holds at least 60% of its value. 

The policy matures in March 2026, when the investor redeems $1,000, plus the pre-defined returns based on the ETF’s performance. 

The fund’s investors will only see an indirect exposure to Bitcoin during the months Ark decides to add GBTC to the ETF.

Ark Invests’ Cathie Wood told CNBC that the probability of a Bitcoin ETF approval has certainly gone up. She added: 

“We expected institutional interest to pick up this year and it certainly has, but the way in which it’s picked up has surprised us. I don’t think we ever thought there would be broad-based substitution of Bitcoin for cash on corporate balance sheets. We find that very interesting.”

While the Innovation ETF currently does not have any Bitcoin exposure, the largest shares in the ETF, Tesla, and Square, with more than 16% allocation in ETF, have 7.8% and 5% Bitcoin in their balance sheet, respectively. 

Proxy Bitcoin Investment Vehicles

The financial world now has a plethora of options for Bitcoin investments beginning with proxy equities. The most prominent of them is MicroStrategy which has converted all of its cash balance to Bitcoin and added more raising debt via senior-convertible notes.

Presently, several top asset management and mutual funds from Blackrock, Morgan Stanley, Ruffer LLC, and Vanguard, among others, have between 1%-13.9% MSTR allocation, which effectively means a Bitcoin investment.

Mutual Funds with MicroStrategy exposure. Source: Money.cnn

Further, other proxy Bitcoin investment products in the U.S. include equities in RIOT, Longfin Corp., and Canadian ETFs from 3iQ and Purpose Investments.

The benefit of adding Bitcoin via ETFs provides tax benefits—by adding to investment allowance brackets—that are not available to crypto investors otherwise.

Disclosure: The author held Bitcoin at the time of press.  

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

After VanEck, NYDIG Files Application for Bitcoin ETF

Bitcoin custodian and asset management firm New York Digital Investment Group (NYDIG) has filed an application for an Exchange Traded Fund (ETF) to issue shares of “NYDIG BITCOIN ETF.” NYDIG…

After Bitcoin, SEC Commissioner Hester Peirce Backs DeFi

Hester Peirce, a commissioner at the U.S. Securities and Exchange Commission (SEC), recognized that DeFi is “a rapidly growing corner of the crypto world with significant money.” She added that…

What is Dogecoin?

So what is the story behind DOGE? How did it become the asset of choice for a group of anti-establishment retail traders in January 2021, and what are the chances…

Are Institutions Re-Opening Their Bitcoin Positions?

BTC price may have only increased by 8% in the last week, but open interest for CME Bitcoin Futures is up 38% over the same period. With several economic catalysts…

Read More

- Advertisement -

More articles


Please enter your comment!
Please enter your name here

- Advertisement -

Latest article