The second bank to apply for a Bitcoin ETF is Wall Street behemoth Goldman Sachs, which hopes to earn money for its customers from changes in the price of the cryptocurrency.
Instead of investing directly in Bitcoin, the fund will allocate the majority of its net assets to instruments that offer exposure to the cryptocurrency.
The banking behemoth has applied to the Commission for a Bitcoin Premium Income ETF, according to an SEC filing. At least 80% of the fund’s net assets will be allocated to investments that offer exposure to Bitcoin.
Spot Bitcoin ETFs, options on spot BTC ETFs, and options on Bitcoin ETF indices are some of these investment products.
Following Morgan Stanley, which introduced its Bitcoin ETF last week, Goldman Sachs is now the second firm to apply for a Bitcoin ETF. Nevertheless, the Bitcoin Premium ETF will not make direct investments in Bitcoin, in contrast to a spot BTC ETF.
Rather, it will make investments in products that offer Bitcoin exposure.
The bank stated in the prospectus that the fund may directly own shares of spot Bitcoin ETFs and Bitcoin ETF options to generate income for the investors. Goldman Sachs noted that the fund will sell call options on the Bitcoin ETF at a premium in order to generate returns.
Meanwhile, the biggest asset manager in the world, BlackRock, has also applied for a Bitcoin premium ETF. As noted by Bloomberg analyst Eric Balchunas, BlackRock applied for the Fund under the ’33 Act, whereas Goldman Sachs filed under the ’40 Act.
He pointed out that to get around regulatory restrictions on holding commodities, the bank must establish a Cayman subsidiary with the ’40 Act filing.
He noted that Goldman Sachs may aim to surpass BlackRock, as clients prefer Bitcoin with less volatility, accepting lower returns in exchange for reduced risk.
Additionally, Balchunas called Goldman Sachs’ submission a “shock”, saying he didn’t anticipate it.
Source: X.com
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