Recently presented as the future of cryptocurrency by Goldman Sachs, the interest of the American bank in Ethereum is no longer to be demonstrated. As evidenced by Goldman Sachs’ willingness to set up an ETF on decentralized finance with Ethereum as the driver.
Goldman Sachs and Ethereum: A Love Story?
A few days ago, a report from one of the world’s most influential banks alerted the financial markets. And more specifically, those of the crypto-currency. Why? The note reported that Ethereum could become the number one cryptocurrency on the market. Ahead of Bitcoin.
A report also noted that Bitcoin was primarily profiting from its image rather than a truly innovative and useful solution. In contrast to the most famous cryptocurrency, all the practical aspects of the Ethereum token, the keystone in the field of decentralized finance (DeFi).
In recent months, the connection between the Ethereum ecosystem, decentralized finance, and Goldman Sachs has been more than obvious.
Goldman Sachs: The creation of a DeFi ETF
It is in this context and with the will to get closer to the DeFi universe that Goldman Sachs recently posted its ambitions. Those of creating an ETF (Exchange Traded Fund) based on the performance of companies operating in the decentralized finance environment.
The bank has just filed an application for registration with the SEC (Securities Exchange and Commission), the American stock market regulator. The document filed with the regulatory body specifies the interest in using this stock market index.
“The index is designed to provide exposure to companies that are aligned with two key themes, blockchain technology implementation, and finance.”
The acceptance by the SEC leaves little room for doubt. Indeed, the financial watchdog has already approved a similar ETF at the request of Goldman Sachs. That was the Bitwise Cryptocurrency Industry Innovators.
A New Tool Already Criticised
This new financial instrument will expose retail and institutional investors to these two themes. However, in detail, the term “DeFi ETF” seems slightly overused. Indeed, there will be no question of exposing investors to projects such as Uniswap or Aave, but only to companies that are already listed on the stock exchange. By DeFi, we should rather understand that we are talking about financial companies that are involved in the digitalization of their activity. With key themes of tomorrow’s world such as digital transformation.
Moreover, this DeFi ETF does not replicate the price of tokens but rather the share price of listed companies. If we take the example of the Bitwise Cryptocurrency Industry Innovators ETF, almost a third of the capital is invested in 3 companies. These are MicroStrategy, Coinbase, and Silvergate Capital.
For some observers on Twitter, on closer inspection, the Goldman Sachs fund would have nothing to do with a decentralized finance fund. As evidenced by the companies in which the fund intends to invest. A fund that would not invest in any crypto company. As Charlie Shrem laments when he publishes the companies in which the fund should invest.
Want to stay updated on a daily basis?