The banking giant of Wall Street, Goldman Sachs, is working to offer Bitcoin and cryptocurrency investment vehicles to institutional clients. Mary Rich, global head of digital assets at Goldman’s private wealth management division, said the bank will begin offering cryptocurrency investment opportunities in the second quarter of this year. In an interview last week, Rich stated:
We’re working closely with teams across the company to explore ways to offer thoughtful and appropriate access to the ecosystem for private equity clients, and that’s something we hope to deliver in the near term.
But Goldman is not about to take this halfway. Rich said the bank will offer a “full spectrum” of investments in Bitcoin and other digital assets. He added that it could be through physical Bitcoin, derivatives, or traditional investment vehicles. Again, Goldman Sachs isn’t the only investment bank offering access to this nascent asset class, either. Another banking giant, Morgan Stanley, has also joined the race. However, these offers have intrigued crypto believers and billionaires alike. Rich said strong customer demand has forced the banking giant to look at these cryptocurrency deals. Goldman’s private wealth management business is primarily aimed at individuals, estates and families with a minimum investment of $25 million. Rico added:
There is a contingent of clients looking to this asset as a hedge against inflation, and the macroeconomic environment over the past year has certainly played a role. There is also a large contingent of customers who feel that we are sitting at the dawn of a new Internet in some way and are looking for ways to participate in this space.
Obtaining regulatory clearance before offering Bitcoin
Rich said that Goldman Sachs is willing to offer Bitcoin mutual funds along with other forms of investing that are “more akin to the underlying asset class that trades 24/7 globally.” . Some crypto funds have a cap on them. For example, the Galaxy Bitcoin fund allows you to buy/sell only once per quarter. However, users can liquidate the institutional Galaxy fund on a weekly basis. Goldman Sachs is currently in the process of obtaining regulatory approval from the US Securities and Exchange Commission (SEC) and the New York Department of Financial Services (NYDFS). Rico said:
We are still in the very early stages of this ecosystem; no one knows exactly how it will evolve or what form it will take. But I think it’s pretty safe to expect it to be part of our future.
Goldman’s offer may create a spiraling effect among traditional players who would come together to offer similar offers in the future.