According to the documents submitted by the banking giant GoldmanSachs to the Securities and Exchange Commission (SEC), GoldmanSachs applied for approval of a new exchange-traded fund (ETF) to increase its investment exposure to Bitcoin.
According to the innovative structure of Ark Investment and the filing date of March 19th, 2021, this financial product will be called an automatically redeemable coupon-linked ETF bill. GoldmanSachs' product is scheduled to expire on March 26th, 2026.
ETF is an actively managed exchange-traded fund, which normally invests mainly (at least 65% of its assets) in domestic and foreign stock securities of companies related to the disruptive innovation investment theme of ETF.
The fund's main investment strategy considers companies or disruptive technologies that rely on and benefit from "products or services under development". In addition, these "companies" may belong to multiple departments (energy, transportation, genomics, etc.) and have scientific research to support them.
The document pointed out that "ETF may indirectly contact cryptocurrencies such as Bitcoin through investment in trusts, and ETF's exposure to cryptocurrencies may change over time, so this risk exposure may not always be shown in ETF's portfolio."
In addition to bitcoin, GoldmanSachs will also invest in financial technology innovation companies, "next generation" Internet companies, artificial intelligence, energy conversion and automation transformation entities.
The document further pointed out that ETFs can also provide bitcoin exposure to third parties.
"ETF is allowed to lend its portfolio securities to brokers, dealers and other financial institutions who wish to borrow securities to complete transactions, in order to seek arbitrage opportunities or hedging strategies or for other similar purposes. For such loans, the current collateral obtained by ETF is at least 102% of the value of the loan portfolio securities, and the collateral is priced at market price every day. "
On the other hand, banking institutions continue to increase their holdings of bitcoin. Just a few days ago, Morgan Stanley announced that it would provide customers with bitcoin exposure. It became the first major bank in the United States to provide bitcoin fund services for its wealth management clients.
In cooperation with crypto companies Galaxy Digital and FS NYDIG, the risk exposure will be obtained through three funds.
Interested investors must have more than $5 million in their bank accounts. Morgan Stanley believes that BTC is only suitable for those who have "positive risk tolerance". Even these customers can only put 2.5% of their funds into cryptocurrencies through Morgan Stanley.
According to Morgan Stanley's report, Bitcoin is approaching to become an "investable asset category". The report is very careful in providing direct advice to customers who want to contact cryptocurrencies. At the same time, however, it claims that BTC may be at a critical moment of adoption.
The report said: "For cryptocurrency, we think it has reached the critical value. A solid regulatory framework, deepening liquidity, product availability and the growth of investor interest, especially the interest among institutional investors, have come together. "
The price of bitcoin responded to this news, with a moderate decline of 3.3% yesterday, and the transaction price was $54,257. It fell by 6.7% in the past week and 8% in January.
However, in the long run, the ETF is beneficial to the development of cryptocurrency.