Goldman Sachs has long been content to watch the crypto craze from the sidelines but, in a surprise move, the big bank on Tuesday revealed plans for its own product in the form of a “Bitcoin Premium Income ETF.”
The new Goldman fund, which was described in a regulatory filing, is structured a little differently from traditional spot Bitcoin ETFs. The fund aims to buy other exchange traded products that hold Bitcoin, rather than hold Bitcoin itself, and sell call options on those funds.
Goldman Sachs described the product as an “options overwrite strategy” that creates regular income from the sale of the call positions. The firm added that, in modest or falling Bitcoin markets, the ETF could outperform spot Bitcoin ETFs, but that its performance could lag those funds during times when Bitcoin experiences rapid price appreciation.
Although this is Goldman’s first Bitcoin ETF filing, Goldman Sachs will not be the first issuer to offer a Bitcoin ETF with an options strategy. Grayscale offers a Bitcoin covered call ETF, and BlackRock has filed for a similar product.
Goldman has long had a hot-and-cold relationship with Bitcoin. In 2020, leaked slides showed the bank saying Bitcoin’s appreciation was based primarily on people being willing to pay more for it, called it a conduit for illegal activity, and likened it to Dutch tulip mania.
However, as Bitcoin and crypto have become more firmly embedded in the financial sector, Goldman has become more entwined with crypto. The bank was named an authorized participant on BlackRock’s Bitcoin ETF, and regulatory filings show Goldman holds a number of Bitcoin and crypto-linked ETFs and equities. Goldman Sachs CEO David Solomon has recently expressed interest in tokenization and stablecoins.
With the filing, Goldman Sachs becomes the latest major U.S. bank to make a foray into proprietary Bitcoin funds, following Morgan Stanley’s Bitcoin ETF launch last week.
Bloomberg ETF analyst Eric Balchunas called the filing a shock on X and said that the filing may indicate that Goldman sees an opportunity to leapfrog current Bitcoin ETF leader BlackRock. Balchunas also speculated Goldman clients may want Bitcoin exposure but are willing to “give up some upside for lower downside and income,” a structure the analyst referred to as “Boomer Candy.”
