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Goldman Sachs Files Crypto-Related ETF Application with SEC

UTC by Tolu Ajiboye · 3 min read
Goldman Sachs Files Crypto-Related ETF Application with SEC
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Goldman Sachs plans to create an ETF linked to companies like Nokia, Facebook, Microsoft etc. The ETF will mimic the German Solactive Index.

Goldman Sachs Group Inc (NYSE: GS) has joined a growing list of companies carving out a niche in the crypto world via ETF. On Monday, the world-renowned investment bank filed with the US Securities and Exchange Commission (SEC) for a ‘DeFi’ ETF that will track the major stocks of tech-oriented companies. Some of these companies include Nokia, Google, Fujitsu, Microsoft, and Accenture.

Dubbed the Goldman Sachs Innovate DeFi and Blockchain Equity ETF, the fund tracks the Decentralized Finance and Blockchain Index of German financial indices provider Solactive. The fund seeks to provide investment results net of fees and expenses that closely mimic the performance of Solactive Index. The index is decentralized, and a small portion of its share also features stocks of companies including PayPal, Visa, and Microsoft. The German financial index provider also tracks China’s Alibaba, Tencent, and Baidu, among 20 assets in its DeFi index. The Goldman Sachs ETF fund will invest at least 80% of its assets into securities, stocks, and depository receipts featured in the index.

Regardless of share size on the index, all companies have orientations towards blockchain technology and the digitization of finance. It is this underlying trait that Goldman Sachs wants to take advantage of through its ETF offerings. In addition, the banking juggernaut’s proposed ETF intends to deliver accessibility to companies aligned with two themes. Per the filing, these include The Implementation of Blockchain technology and the Digitalization of Finance. Goldman Sachs’ use of the ‘DeFi’ term relates to “Digitalization of Finance” instead of “Decentralized Finance.”

Blockchain Technology Gaining Traction

Goldman’s filing request joins an ever-growing list of crypto ETF applications currently set before the SEC. The commission is currently reviewing several Bitcoin (BTC) applications. Outfits like VanEck and WisdomTree have previously filed for Ethereum ETFs, although Goldman Sachs’ filing seems to be the first DeFi-related ETF application.

Other notable institutions interested in the DeFi sector include Grayscale Investments. Last week, the leading crypto asset manager announced plans to launch a decentralized finance fund. Grayscale’s DeFi fund intends to offer exposure to premium DeFi tokens, including leading protocols such as Uniswap and Aave.

While both are governance tokens, Aave is also interested in offering access to institutional capital. To this effect, the top DeFi open-source money market launched a permissioned pool for institutions earlier this month.

Takeaway From the Goldman Sachs ETF Filing

The investment bank’s ETF will offer exposure to public companies in decentralized finance and blockchain around the globe. Goldman Sachs will pick markets from Australia, Canada, France, Germany, Hong Kong, Japan, South Korea, Switzerland, and the Netherlands. Others include the United Kingdom and the United States.

According to Coindesk, Goldman is reportedly clearing and settling cryptocurrency exchange-traded products for some hedge fund clients in Europe.

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Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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