Goldman Sachs New Investment Product Seeks Bitcoin Exposure Through Ark Innovation ETF

Wall Street banking giant Goldman Sachs Group Inc. GS has applied for a new investment product that will provide investors with indirect exposure to Bitcoin BTC/USD through the ARK Innovation ETF.

What Happened: According to the SEC filing, the new Goldman ETF will pay out a coupon to investors based on the performance of the ARK ETF.

“The ETF may have exposure to cryptocurrency, such as bitcoin, indirectly through an investment in a grantor trust. The ETF’s exposure to cryptocurrency may change over time and, accordingly, such exposure may not always be represented in the ETF’s portfolio,” stated the filing.

If approved, the product's exposure to Bitcoin would primarily be through ARK Innovation’s investment in the Grayscale Bitcoin Trust GBTC. With over $30 billion in assets under management, GBTC is the largest Bitcoin fund on the market, and ARK is its largest shareholder with over $368 million invested in it.

The ARK Innovation ETF also has indirect exposure to Bitcoin through its holdings of Tesla Inc TSLA and Square Inc SQ, which hold Bitcoin on their balance sheet.

Why It Matters: The SEC’s lack of approval of a Bitcoin ETF thus far has led to companies offering “indirect” exposure to Bitcoin with these investment products.

Last month, JPMorgan Chase & Co. JPM said it will offer investors Bitcoin exposure through a basket of 11 “Bitcoin stocks.”

However, some institutions are of the belief that approval from the SEC is around the corner and have filed directly for Bitcoin ETF.

Fidelity has registered a preliminary filing with the U.S SEC to launch a Bitcoin ETF which will track the movement of the digital asset on BTC spot markets.