Goldman Sachs, the world’s second-largest investment bank, has addressed cryptocurrencies for the first time in its annual shareholder letter. In the 2024 letter, the bank noted that cryptocurrency and blockchain technologies are increasing competition within the financial sector. Until 2017, such terms were absent from the shareholder correspondence, but recent years have seen a notable shift in Wall Street’s attitude towards cryptocurrencies. The rise of Bitcoin
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Goldman Sachs Opens the Door to Cryptocurrencies
Goldman Sachs had already signaled its interest in cryptocurrencies by launching a trading desk in 2021 and establishing a Digital Asset Platform in 2022. The bank is also one of the few that tested the blockchain-based communication system, Canton Network, over the past three years. These actions highlight a growing interest in cryptocurrency and blockchain technology among traditional financial institutions.
Goldman Sachs Cryptocurrency
In the 2024 shareholder letter, Goldman Sachs highlighted the competitive landscape introduced by new market technologies. The letter stated, “Some competitors may offer financial products that our clients can choose, including cryptocurrencies.”
The bank also emphasized the risks associated with cryptocurrency and blockchain technology. They remarked, “Cryptocurrencies and similar technologies are growing, but they are still in early stages, thus may be vulnerable to cyber attacks.” Furthermore, the letter pointed out that Goldman Sachs’ involvement in the cryptocurrency market through client transactions also carries inherent risks.
Is Goldman Sachs Changing Its Stance on Bitcoin?
David Solomon, CEO of Goldman Sachs, believes that blockchain technology could reduce friction in the financial sector. However, he maintains that Bitcoin is a “speculative investment.” In a statement last year, he expressed, “I don’t see a real use case for the largest cryptocurrency.” Nevertheless, he acknowledged Bitcoin could serve as a store of value. Furthermore, he indicated that should the regulatory environment in the U.S. change by December 2024, the bank would consider investing in Bitcoin and Ethereum
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Goldman Sachs has made headlines for significant investments in two major Bitcoin ETFs in the last quarter of 2024. The bank invested $1.27 billion in BlackRock’s IBIT fund, increasing its stake by 88%. It also raised its holdings in Fidelity’s FBTC fund by 105%, making an investment of $288 million.