Alternative Investments/Digital: Goldman Sachs Offers Proxy Exposure To Cryptos Via “ETF-Linked” Notes

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The notes will be linked to Cathie Wood’s (pictured above) ARK Innovation ETF.

Goldman Sachs (NYSE: GS) plans to offer notes linked to the performance of the ARK Innovation ETF, an actively managed fund by Cathie Wood’s ARK Investment Management. The $ 15.7 million Auto-callable Contingent Coupon ETF-linked notes are due 2026. (CoinDesk)

Goldman Sachs’ proxy exposure to cryptos

According to ETF analyst Eric Balchunas, Goldman Sachs’ new bitcoin-linked product is “like a side bet for its bigger institutional clients.”

However, the filing provides that ETF may also have exposure to cryptocurrency, such as bitcoin, indirectly through an investment in a grantor trust.

It may be noted that the ARK Innovation ETF is invested in the Grayscale Bitcoin Investment Trust. ARK also provides exposure to companies that are a force for disruptive innovation and are at the forefront of cutting-edge technologies such as the blockchain.

Earlier this month, JPMorgan (NYSE: JPM) offered its clients a way to gain exposure to cryptocurrencies through a structured note offering that was tied to a basket of stocks related to those assets.

JPMorgan’s structured notes

The notes did not give direct exposure to the cryptocurrencies but instead were linked to a basket of 11 unequally weighted stocks that had their fortunes linked directly or indirectly to cryptos. (Forbes)

The move could be construed as a means to get around the nonavailability of a regular crypto-backed ETF, similar to the Goldman Sachs notes.

About 68% of the basket is accounted for by just four stocks, namely, MicroStrategy (NASDAQ: MSTR) (20%), Square (NYSE: SQ) (18%), Riot Blockchain (NASDAQ: RIOT) (15%), and NVIDIA Corporation (NASDAQ: NVDA) (15%).

Jack Tatar, managing partner of crypto venture firm Doyle Capital Management said JPMorgan’s notes could be considered a “gateway drug for investing in crypto.”

Related Story:  Scaramucci’s Skybridge Capital Files For A Bitcoin ETF

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