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Goldman Sachs says wealthy clients see Bitcoin (BTC) as a hedge against inflation

  • Goldman Sachs said that its team is working on building appropriate ways to provide crypto exposure to private wealth clients.
  • The bank is also working on getting regulatory approval from the U.S. SEC and NYDFS.

Wall Street banking giant Goldman Sachs is working to offer Bitcoin and crypto investment vehicles to institutional clients. Mary Rich, global head of digital assets for Goldman’s private wealth management division, said that the bank will start offering crypto investment opportunities by the second quarter of this year. In an interview last week, Rich stated:

We are working closely with teams across the firm to explore ways to offer thoughtful and appropriate access to the ecosystem for private wealth clients, and that is something we expect to offer in the near term.

But Goldman isn’t willing to take this half-heartedly. Rich said that the bank will offer a “full-spectrum” of investments in Bitcoin and other digital assets. She added that it could be through physical Bitcoin, derivatives, or traditional investment vehicles.

Again, Goldman Sachs is also not the only investment bank to offer access to this nascent asset class. Another banking giant Morgan Stanley has joined the race as well. However, these offerings have intrigued crypto believers and billionaires alike.

Related: Galaxy Digital partnership facilitates Goldman Sachs’s first over the counter (OTC) crypto transaction

Rich said that strong client demand has forced the banking giant to look into these crypto offerings. Goldman’s private wealth management business basically targets individuals, endowments, and families with a minimum $25 million investment. Rich added:

There’s a contingent of clients who are looking to this asset as a hedge against inflation, and the macro backdrop over the past year has certainly played into that. There are also a large contingent of clients who feel like we’re sitting at the dawn of a new Internet in some ways and are looking for ways to participate in this space

Getting the regulatory clearance before offering Bitcoin

Rich said that Goldman Sachs is willing to offer Bitcoin investment funds along with other ways to invest that are “more akin to the underlying asset class which trades 24-7 globally”. Some crypto funds have a capping to them. For e.g. the Galaxy Bitcoin fund allows buying/selling only once per quarter. However, users can liquidate the Galaxy institutional fund on a weekly basis.

Currently, Goldman Sachs is in the process of seeking regulatory approval from the U.S. Securities and Exchange Commission (SEC) and the New York Department of Financial Services (NYDFS). Rich said:

We’re still in the very nascent stages of this ecosystem; no one knows exactly how it will evolve or what shape it will be. But I think it’s fairly safe to expect it will be part of our future.

Goldman’s offering can create a spiral effect among traditional players who would join to provide similar offerings in the future.

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