One of the biggest and most renowned banking institutions in the world, Goldman Sachs has filed an application for offering an Exchange Traded Fund (ETF), which would be linked to companies in the decentralized finance (DeFi) space. If it receives approval, the instrument would be helpful for retail investors and institutions in gaining exposure to DeFi assets by making use of the services of a regulated banking institution like Goldman Sachs. One of the top commercial banks in the world, Goldman Sachs is not the first one to have filed for an ETF with the Securities and Exchange Commission (SEC).
But, it is the first defi-linked ETF, as the others were mostly related to cryptocurrencies. This particular ETF has been given the name of ‘Goldman Sachs Innovate Defi and Blockchain Equity ETF’. Its aim is to provide regulated institutions with exposure to these technologies. The Soloactive Blockchain Technology Performance-Index will be linked with the performance of the fund. A portfolio of tech companies is followed by this index, which has made investments in blockchain technologies. Companies such as Overstock, Microsoft, IBM, Alphabet, and Nokia are part of the index. As mentioned earlier, this would be the first ETF that will capitalize on the growth and popularity of the defi space that has been seen this year.
It was reported in June that Goldman Sachs had been engaging in the crypto sector recently, as they had partnered with Galaxy Digital for providing Bitcoin futures products. This filing is considered as another shred of evidence that even the big banks have now taken an interest in bringing their structures and services to the cryptocurrency market. A number of these banks had disregarded cryptocurrencies altogether in the beginning, but they are now moving towards integrating investment products that can be helpful in bringing traditional investors into the crypto sphere.
Earlier this month, a note was released by Goldman Sachs regarding the state of the crypto market, in which it mentioned that Ether could end up surpassing Bitcoin as the most valuable and important crypto because the former boasts a ‘higher real use potential’. It is possible that this perspective regarding the ecosystem could have resulted in the ETF application, as the investment bank seems to be clearly focused on following blockchain-based and defi companies. According to a recent survey conducted by the bank, it is apparent that even high net worth families are choosing crypto as an investment vehicle due to a variety of factors.
Some of these factors include prolonged low-interest rates, higher inflation, and other macroeconomic developments after a year of unexpected global fiscal and monetary stimulus. It was highlighted in the survey that there is a real audience that expects crypto investment products to be introduced by regulated sources, which will be a lot more secure. All of this is an indication of the crypto market gaining traction and attracting the attention of global investors as a profitable investment vehicle, particularly in these uncertain times when COVID-19 cases are surging once more.