HomeCryptoGoldman Sachs and crypto: the opposing position of the Chief Investment Officer

Goldman Sachs and crypto: the opposing position of the Chief Investment Officer

According to the Wall Street Journal, the Chief Investment Officer of Goldman Sachs stated that the bank’s clients are not showing interest in cryptocurrencies. 

This happens despite the recent increase in prices and the interest shown by other major players in traditional finance. Let’s see all the details below. 

Why is Goldman Sachs still skeptical about cryptocurrencies?

As anticipated, Goldman Sachs, the prestigious Wall Street bank, maintains its negative position towards cryptocurrencies, not recognizing any value as assets. 

Sharmin Mossavar-Rahmani, chief investment officer of the bank’s wealth management unit, has long been known for her skepticism towards Bitcoin and other digital assets. Her opinion has not changed, as highlighted in a recent interview with the Wall Street Journal.

Goldman Sachs clients maintain their reluctance towards this type of investment, according to Mossavar-Rahmani. 

Nevertheless, customers’ interest in exposure to Bitcoin has led competitors such as BlackRock and Fidelity to double their efforts in the cryptocurrency sector earlier this year.

A main reason for his skepticism is the lack of a reliable way to evaluate the value of cryptocurrencies.

As he stated: 

“If you can’t assign a value, then how can you be bullish or bearish?”

Mossavar-Rahmani has also criticized the cryptocurrency industry for what she believes to be hypocrisy. 

In particular, emphasizing that, despite claims about the democratization of finance, decisions are often driven by a limited number of people with control over the market.

Unlike Goldman Sachs, many of its competitors have taken actions to enter the cryptocurrency sector. 

For example, J.P. Morgan Chase launched its blockchain platform in 2020, now employing over 100 people in this sector. Meanwhile, Citigroup Inc. is exploring the tokenization of private funds.

Goldman Sachs: increasing demand from investors for ETFs puts companies without offerings at risk

In the world of investments, the demand for ETFs from investors shows no sign of decreasing, recently noted an expert from Goldman Sachs. 

According to Steve Sachs, Global Chief Operating Officer of ETF Accelerator at Goldman Sachs, not offering investment strategies to investors through ETFs could be a costly mistake for companies. 

Sachs emphasizes that the opportunity cost of not offering ETF products could be higher than the potential benefits: 

“Any number of our clients would tell you that the opportunity cost of not offering ETF products is higher.”

If a company does not offer ETF quotes, Sachs believes that “eventually those assets will leave and go to a competitor that does”, as stated: 

“Our main institutional clients have turned to us asking: ‘What is the best way to enter the world of ETFs? How can we implement our strategy, both active and passive, through an ETF vehicle?”

According to Sachs, customer requests regarding the launch of ETFs have increased after the approval of SEC’s Rule 6c-11 in 2019, designed to facilitate the process of launching such funds.

“Although we cannot consider it a real boom, it has certainly been a significant catalyst. The intention was to simplify the launch of ETFs, but the reality is that it was not so simple. At one point, we received more than 41 requests from clients with the same issue: ‘How can we proceed quickly and do you have the ability to help us?'”

Sachs stated that it could be years before customers develop the skills, human resources, and risk management framework necessary to launch an ETF. 

ETF Accelerator: entering the market conveniently

To address this growing demand, Goldman Sachs launched its ETF Accelerator in 2022, a digital platform to help clients efficiently launch, list, and manage their own ETFs. 

“The platform allows our clients to enter, launch, quote and manage their ETFs, leveraging the technology, infrastructure and risk management expertise for which Goldman is renowned. Essentially, it allows them to enter the market more quickly and conveniently than they could do on their own.”

The accelerator has already facilitated the launch of several ETFs, with companies like Eagle Capital Management, GMO, and Brandes Investment Partners opting for this solution instead of undertaking the expensive and lengthy journey of a standalone launch. 

According to Sachs, it is crucial for companies to capitalize on the growing popularity of ETFs in order not to miss investment and business opportunities.

Alessia Pannone
Alessia Pannone
Graduated in communication sciences, currently student of the master's degree course in publishing and writing. Writer of articles from an SEO perspective, with care for indexing in search engines.