In the last several months, the Goldman Sachs investment bank has moved towards Ethereum and Decentralized Finance (DeFi).
The company is preparing to provide an Exchange Traded Fund (ETF), which is connected with businesses in the industry, according to a filing today with the Securities and Exchange Commission (SEC).
The Goldman Sachs Innovate DeFi and Blockchain Equity ETF are going to provide investors the opportunity to “align” businesses with blockchain technology and finance digitization, the Bank claims.
An ETF is an investment instrument that monitors an asset or asset group and may be exchanged on conventional markets like shares. Although the SEC has a backlog of Bitcoin ETF applications—that would provide investors with access to BTC without storing and securing their own digital assets—the agency still needs to approve such a fund.
Goldman Sachs DeFi ETF Not Actually DeFi?
The Goldman Sachs DeFi ETF may not be comprised of actually DeFi cryptocurrencies, however. Rather, it focuses on companies that have implemented blockchain technologies in their businesses. The DeFi ETF is linked to Solactive’s Blockchain Technology Performance Index.
Goldman Sachs’s “DeFi” Fund contains only legacy companies and has 0 crypto-native companies.
They’re trying to deceive the public into thinking we already have decentralized finance.
Fix the money, fix the world
— Charlie Shrem (@CharlieShrem) July 27, 2021
In this sense, the Blockchain Technology Performance Index of Solactive includes big hitters like Nokia, Facebook, Alphabet, Mastercard, and PayPal.
While some of these companies have ambitions or initiatives for cryptographic purposes most notably Facebook and Paypal, they are not necessarily exposed to cryptocurrencies, say, as Microstrategy or Square. Moreover, their adoption of DeFi—which eliminates middlemen like major financial institutions and firms from banking, lending, and trading processes—is questionable.
Still, Goldman has signaled interest overall in the blockchain space. In June, it joined a $28 million round of financing for the Blockchain infrastructure company Blockdaemon. It disclosed intentions to start trade for Ethereum options in the coming months.
Goldman Sachs States Ethereum May Become a New Store of Value
Goldman Sachs has recently talked up Ethereum. It stated that most individuals now choose to use Ethereum’s smart contracts because of ETH’s popularity. This scenario could lead to Ethereum’s Bitcoin surpassing soon becoming the first market cap cryptograph.
In addition, the banking giant said that the entire market capacity of Ether (ETH) may surpass Bitcoin (BTC) in a few more years.
Goldman Sachs claims Ethereum has become the most popular and utilized development platform. ETH has the most registered “actual use case” among all smart contract applications.
A Smart Contract is an Ethereum blockchain software application. This allows the automated execution of digital contracts enabled by both DeFi and Dapp protocols. They include data and carry out a transaction once it has begun.
How do you feel about Goldman Sachs’ DeFi ETF?