(Kitco News) – Wall Street continues to increase its exposure to the cryptocurrency market as the latest quarterly 13F filing from Goldman Sachs shows the multinational investment bank now holds $418.65 million worth of shares in various spot Bitcoin (BTC) exchange-traded funds (ETFs).
Goldman’s largest holding is in BlackRock’s iShares Bitcoin Trust (IBIT), with the firm holding 6.9 million shares worth approximately $238.6 million. That makes the bank the third-largest holder of IBIT behind Millennium Management and Capula Management Ltd.
They also hold 1.51 million shares of Fidelity’s FBTC, worth $79.5 million, 660,183 shares of Grayscale’s converted Bitcoin fund, worth $35.1 million, 940,443 shares of the Invesco Galaxy Bitcoin ETF, worth $56.1 million, and smaller investments in the Bitwise, WisdomTree, and ARK 21Shares Bitcoin ETFs, as noted by X user MacroScope.
This revelation is notable because the chief investment officer of Goldman Sachs Wealth Management, Sharmin Mossavar-Rahmani, told the Wall Street Journal during an interview in April that the bank didn’t see crypto as an investment asset class.
“We do not think it is an investment asset class,” Mossavar-Rahmani said. “We’re not believers in crypto,” she added, comparing the excitement around digital assets to the tulip mania of the 1600s.
Mossavar-Rahmani said that despite BTC’s runup to nearly $74,000, she continues to hold a negative view of Bitcoin and the broader crypto market, noting that it’s nearly impossible to accurately value cryptocurrencies, which don’t produce earnings, cash flow, or dividends.
“If you cannot assign a value, then how can you be bullish or bearish?” she asked rhetorically.
Bitcoin “creates absolutely no value in any shape or form,” she added. While crypto proponents proclaim that it will lead to a decentralized financial system with a greater level of democratization, “the main decisions end up being driven by a few controlling people,” she said.
Despite Mossavar-Rahmani’s reservations, her company appears unwilling to ignore the profit potential presented by allowing clients to purchase Bitcoin, which led to the firm acquiring $418.65 million worth of shares in Bitcoin ETFs through the end of June.
And Goldman isn’t alone in gaining exposure to Bitcoin as the 13F filing from DRW Captial shows more than $195 million in exposure to crypto ETFs, including more than $150 million invested into the Grayscale Ethereum (ETH) Trust.
DRW Capital also chose to diversify its exposure to Bitcoin ETFs and holds shares in the ARK and 21Shares, Bitwise, BlackRock, Fidelity, and ProShares BTC ETFs.
Capula, one of Europe’s largest hedge funds, also disclosed spot Bitcoin ETF holdings of $464 million in its 13F filing, with IBIT and FBTC as its two largest holdings.
While central banks have shunned Bitcoin, they have found less direct methods to invest in crypto, including the purchase of MicroStrategy (MSTR) stock, which many consider a proxy for investing in Bitcoin as the company is the largest corporate holder of BTC.
The 13F filings by the central banks of Norway and Switzerland detail substantial holding of MSTR stock. Norges Bank, which is responsible for managing the Government Pension Fund of Norway, holds 1.123 million MSTR shares, while the Swiss National Bank holds 466,000 MSTR shares, an increase of 60% from the previous quarter.
Filings by South Korea’s public pension fund and Japanese insurance company Mitsui Sumitomo also show exposure to MSTR.
According to Juan Leon, a senior investment strategist at Bitwise, the investments from Goldman Sachs, DRW Capital, and Capula are just the start, and rising institutional interest will help propel Bitcoin to new record highs.
“Since January, inflows into Bitcoin ETPs have topped $17 billion and outpaced new supply, pushing Bitcoin to an all-time high earlier this year,” he wrote. “These inflows don't even include some of the biggest players. Last week, Morgan Stanley became the first wirehouse to approve Bitcoin ETPs on their platform. We expect Merrill Lynch, UBS, Wells Fargo, and others to follow suit.”
