‘We’re not believers’: Goldman Sachs doubles down on crypto skepticism despite Wall Street embracing Bitcoin ETFs

Niamh Rowe

Sharmin Mossavar-Rahmani, chief investment officer of <a href="https://fortune.com/2024/04/02/sixth-street-goldman-sachs-alan-waxman-chavez-tpg-wall-street-ipos-private-equity/">Goldman Sachs</a> Wealth Management, told the <a href="https://www.wsj.com/finance/currencies/bitcoin-price-goldman-01189443?mod=currencies_news_article_pos1">Wall Street Journal</a> in an interview this week that despite all the recent hype around Bitcoin ETFs her firm isn’t buying into it.<div class="paywall-selector"></div><div class="paywall">



“We’re not believers in crypto,” she said. “We do not think it is an investment asset class.”



“If you cannot assign a value, then how can you be bullish or bearish?” she added. The crux of her disdain for cryptocurrencies is the difficult task of valuing them, as they don’t produce earnings, dividends, or cash flow, the Journal reported.



Having guided thousands of wealth advisors, clients, and traders over the past 23 years in her role at the high-profile investment bank, she told the newspaper that clients are aware of the company’s anti-crypto stance and refrain from seeking counsel for investing in the space, despite Bitcoin reaching an all-time high of $73,737 last month, according to CoinGecko <a href="https://www.coingecko.com/en/coins/bitcoin">data</a>.



Mossavar-Rahmani said she sees crypto as simply a speculative investment and doesn’t see merit in unregulated markets: “The rule of law and systems of checks and balances matter.”



But Mossavar-Rahmani’s stance is at odds with others in traditional finance, who are incorporating—albeit slowly—crypto into their offerings, and in contradiction to rumors that Goldman could be more crypto-friendly behind the scenes.



“Though Goldman Sachs might not have a developed view of Bitcoin or digital assets as long-term investments in portfolios, they are certainly engaging with the ecosystem from an infrastructure perspective,” said Matt Ballensweig, managing director and head of BitGo’s Go Network, in reference to the bank’s digital asset research unit.



The bank’s global head of digital assets, Mathew McDermott, <a rel="noreferrer noopener" href="https://www.reuters.com/business/finance/goldman-sachs-digital-assets-chief-sees-huge-appetite-blockchain-assets-2023-12-13/" target="_blank">told Reuters</a> in December that he expects a “significant uptick” in trading volume of blockchain-based assets within the next year or two, and has also seen increasing client interest in crypto derivatives trading.



“Regardless of view, large banks are going to have to service their client needs, and we’re seeing that unfold now,” added Ballensweig.



<h2 class="wp-block-heading">Elsewhere on the street</h2>



Since the Securities and Exchange Commission approved 11 spot Bitcoin exchange-traded funds in January, two of the trading products have been issued by big-name asset managers on Wall Street: <a href="https://fortune.com/2024/03/26/blackrock-ceo-larry-fink-boomers-fix-retirement-crisis-millennials-gen-z-economically-anxious/">BlackRock’s</a> iShares Bitcoin Trust (IBIT) and <a href="https://fortune.com/2024/03/30/fidelity-x-stake-73-decline-since-elon-musk-twitter-takeover/">Fidelity’s</a> Wise Origin Bitcoin Fund (FBTC). 



Given the issuers’ access to mainstream investors and an established customer base, both funds are leading the fiercely competitive Bitcoin ETF race, with the funds amassing almost $60 billion in assets under management so far, according to BitMEX data as of Monday. Of this, IBIT and FBTC have accumulated over $17 billion and $10 billion, respectively—with the latter being the fastest ETF in history to reach this milestone.



Moreover, while Mossavar-Rahmani may publicly condemn investing in crypto, in January <a href="https://www.coindesk.com/business/2024/01/03/goldman-sachs-eyeing-bitcoin-etf-role-via-blackrock-and-grayscale-sources/">CoinDesk reported</a> that Goldman Sachs was in talks to be an authorized participant (AP) for Grayscale and <a href="https://fortune.com/company/blackrock/" target="_blank">BlackRock</a> ETFs, a role that involves creating and redeeming ETF shares to ensure the products trade closely aligned with their underlying assets.



Other Wall Street players have lined up to fill this role.



BlackRock’s AP roster includes quantitative high-speed trader Jane Street and JPMorgan, SEC <a href="https://www.sec.gov/Archives/edgar/data/1980994/000143774923035559/bit20231227_s1a.htm">filings</a> show. Fellow ETF issuer Valkyrie has also teamed up with Jane Street and Cantor Fitzgerald to fulfill AP roles, another <a href="https://www.sec.gov/Archives/edgar/data/1841175/000199937123001312/valkyrie-s1a_122923.htm">filing</a> shows.



Meanwhile, that same month, the <a href="https://fortune.com/company/nasdaq/">Nasdaq</a>, <a href="https://fortune.com/company/cboe-global-markets/">CBOE</a>, and NYSE Arca all filed 19b-4s for SEC approval to allow for the trading of related options, according to notices on their websites.&nbsp;On top of this, in February, CoinDesk <a href="https://www.coindesk.com/business/2024/02/28/morgan-stanley-evaluating-spot-bitcoin-etfs-for-its-giant-brokerage-platform-sources/">reported</a> that investment bank <a href="https://fortune.com/company/morgan-stanley/">Morgan Stanley</a> is allegedly looking into adding <a href="https://fortune.com/2024/02/28/what-is-price-of-bitcoin-etf-blackrock-record-high/">spot Bitcoin ETFs</a> to its brokerage platform. The Wall Street behemoth is said to be carrying out due diligence on the products, according to sources close to the matter. If approved, <a href="https://fortune.com/company/morgan-stanley/">Morgan Stanley</a> would be the first among large registered investment advisor (RIA) networks and broker-dealer platforms to list the ETFs, potentially opening the floodgates for the likes of Merrill Lynch or <a href="https://fortune.com/company/wells-fargo/">Wells Fargo</a> to turbocharge inflows.



“These networks and platforms are the addressable market for Bitcoin that the ETFs were always supposed to open up. We know of other big wire houses or advisor platforms that have approved some of these ETFs for trading already,” Bloomberg analyst James Seyffart told Fortune. “I think eventually the vast majority of platforms, if not all, will approve these things.”</div>

“We do not think [crypto] is an investment asset class,” Sharmin Mossavar-Rahmani, chief investment officer of Goldman Sachs Wealth Management, said this week.

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