TLDR
- Goldman Sachs expanded its crypto portfolio to $1.5 billion in Bitcoin ETFs during Q4 2024
- The bank’s largest position is in BlackRock’s IBIT at $1.27 billion, up 88% from Q3
- Their options strategy includes $760 million in puts and calls across various ETFs
- The bank added $476.5 million in Ethereum exposure through FETH and ETHA
- Regulatory filings show the bank closed positions in smaller Bitcoin ETFs
Wall Street powerhouse Goldman Sachs has made waves in the cryptocurrency market by increasing its Bitcoin ETF holdings to $1.5 billion, according to newly released SEC filings for the fourth quarter of 2024. The move represents a 121% increase from the previous quarter’s position.
The bank’s investment strategy focused heavily on BlackRock’s iShares Bitcoin Trust, known as IBIT. Goldman now holds 24.07 million IBIT shares, valued at $1.27 billion, showing an 88% increase from their third-quarter position.
Fidelity’s Wise Origin Bitcoin Fund emerged as another key investment target for Goldman. The bank’s FBTC holdings grew by 105% to reach $288 million, while maintaining a smaller $3.6 million stake in Grayscale’s Bitcoin Trust.
The investment bank’s approach to cryptocurrency includes a complex options trading strategy. Goldman currently manages $760 million in options positions, split between puts and calls. This includes a $527 million put position in IBIT, an $84 million put in FBTC, and a $157 million call position through IBIT.
Goldman’s cryptocurrency investments have expanded beyond Bitcoin. The bank added $476.5 million in Ethereum exposure during Q4, dividing the investment between Fidelity’s FETH and BlackRock’s ETHA at $234.7 million and $235.5 million respectively.
The timing of these investments coincides with Bitcoin’s price reaching $109,000 before the U.S. Presidential inauguration. The cryptocurrency market saw Bitcoin gain 40.6% during the fourth quarter, while Ethereum rose by 26.2%.
Despite this large-scale investment, Goldman’s CEO David Solomon maintains a cautious stance. In recent statements, he described Bitcoin as a speculative asset and dismissed concerns about it challenging the U.S. dollar’s position as the global reserve currency.
Goldmans Regulatory Filings
The bank’s regulatory filings show a strategic reduction in smaller Bitcoin ETF positions. Goldman closed out holdings in several funds, including ARK 21Shares’ ARKB, Bitwise’s BITB, and WisdomTree’s BTCW, concentrating its investments in larger, more established options.
Market analysts note that Goldman’s investment strategy includes both defensive and growth elements. The substantial put options provide protection against potential market downturns, while call options allow the bank to profit from continued price increases.
The cryptocurrency market landscape continues to evolve, with the SEC reviewing new proposals that could affect ETF operations. BlackRock has suggested allowing in-kind Bitcoin ETF redemptions, which would enable authorized participants to receive actual Bitcoin instead of cash.
Goldman’s moves reflect broader market trends, as institutional investors increase their cryptocurrency exposure. However, the market shows some disparity between Bitcoin and Ethereum performance, with Ethereum’s value relative to Bitcoin hitting a 4-year low.
The bank’s expanding cryptocurrency portfolio comes as it develops its digital asset infrastructure. Solomon has indicated that while the bank has built the necessary systems, regulatory changes must occur before direct trading of Bitcoin and Ethereum can begin.
These investments appear in mandatory 13F filings, which the SEC requires from investment managers overseeing more than $100 million in equity assets. The reports provide a quarterly snapshot of institutional investment strategies.
The market value of Goldman’s holdings has been influenced by overall cryptocurrency price movements. During Q4, both major cryptocurrencies showed strong performance, though Bitcoin’s gains outpaced those of Ethereum.
The investment bank’s strategy suggests a long-term commitment to the cryptocurrency sector, even as it maintains a balanced approach through its diversified positions in both ETFs and options.
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