Leading investment bank Goldman Sachs has filed an application with the United States Securities and Exchange Commission (SEC) to offer a DeFi exchange-traded fund (ETF) linked to public companies in the sector.
The filing notes that the Goldman Sachs Innovate DeFi and Blockchain Equity ETF (the ‘Fund’) will offer exposure to companies that are focused on different aspects of blockchain technology and the digitization of the financial system.
An ETF is a product that tracks the price of an asset and can be traded on the traditional Wall Street exchanges. Though there are over a dozen bitcoin ETF applications that have already been filed with the SEC, the agency has basically kicked the can down the road on its decision about such funds which would give investors indirect exposure to BTC.
Given Goldman Sachs’ proposal would be linked to the stocks of crypto companies rather than crypto-assets themselves, it stands a better chance of approval by the SEC.
Interestingly, Goldman’s fund will be designed to closely correspond to the “performance of the Solactive Decentralized Finance and Blockchain Index.” Yet, this ETF is not listed on the German index fund maker’s website. Moreover, it is particularly disheartening for supporters of crypto-native decentralized finance products considering this index does not have a single DeFi token.
Nonetheless, Goldman says the fund will invest approximately 80% of its assets into common equity securities, depository receipts, and stocks featured in the index. Megacorps featured on Solactive’s Decentralized Finance and Blockchain index, including Nokia, Facebook, Mastercard, PayPal, Intel, Visa, Microsoft, Baidu, Tencent, Alphabet, Lenovo, Sony, Alibaba, among others.
The proposed ETF will be passively managed and will focus on markets in Hong Kong, Canada, Switzerland, Australia, Germany, France, the United States, Japan, South Korea, the United Kingdom, and the Netherlands.
Notably, Goldman Sachs has taken a more active role in the crypto space in recent months. Last month, the investment bank revealed that it was moving beyond the world of the flagship cryptocurrency and expanding into ethereum with options and futures trading.
Goldman has also stated on several occasions that institutional interest in crypto has been growing by leaps and bounds, with almost half of its family office clients interested in adding crypto assets to their portfolios.