Goldman Sachs Maintains Crypto Skepticism Amid Contradictory Actions And Bitcoin ETF Surge

In a recent interview, Sharmin Mossavar-Rahmani, the chief investment officer of Goldman Sachs Wealth Management, expressed her skepticism towards cryptocurrencies, including Bitcoin (BTC). 

Despite the notorious growth in trading volume and institutional adoption of Bitcoin through the approved spot Bitcoin exchange-traded funds (ETFs), Mossavar-Rahmani emphasized that Goldman Sachs does not consider cryptocurrencies a legitimate investment asset class.

Goldman Sachs CIO Skeptical Of ‘Unregulated’ Crypto Markets

During the interview, Mossavar-Rahmani highlighted the alleged challenge of valuing cryptocurrencies, which she said “lacks” traditional valuation metrics such as earnings, dividends, or cash flow. 

According to Mossavar-Rahmani, it becomes “difficult” to take bullish or bearish positions on cryptocurrencies without the ability to assign a value. This sentiment has reportedly led many of Goldman Sachs’ clients to avoid seeking investment advice in the crypto space despite Bitcoin’s recent surge to a new all-time high of $73,700 on March 14. 

Mossavar-Rahmani views cryptocurrencies primarily as speculative investments and questions the merit of unregulated markets. She emphasizes the importance of the rule of law and systems of checks and balances in the financial ecosystem. 

However, Mossavar-Rahmani’s stance contrasts with those of others in the traditional finance sector, which gradually incorporate cryptocurrencies into their offerings.

Mixed Messages

While Mossavar-Rahmani notes that Goldman Sachs may not have a definitive long-term view on Bitcoin or digital assets in portfolios, they are actively engaged in the crypto ecosystem from an infrastructure perspective. 

As previously reported by Bitcoinist, Goldman Sachs’ global head of digital assets, Mathew McDermott, expects trading volumes in blockchain-based assets to increase significantly in the coming years, coupled with a notoriously bullish stance on the price of BTC. 

Speaking at the Digital Asset Summit (DAS) conference in London, McDermott further noted that while retail investors have been the main drivers of price action, there is a noticeable shift as institutions increasingly show interest and participation in the cryptocurrency market.

Interest In Bitcoin ETFs Despite Public Doubts

In January, the US Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs, with asset managers such as BlackRock, Fidelity, Grayscale, VanEck, and others issuing these index funds. 

The iShares Bitcoin Trust (IBIT) by BlackRock and the Wise Original Bitcoin Fund (FBTC) by Fidelity have emerged as the leading Bitcoin ETFs, accumulating nearly $60 billion in assets under management thus far.

Interestingly, despite Mossavar-Rahmani’s public skepticism of crypto investments, Bitcoinist has also reported the bank’s interest in playing a “crucial role” in the spot Bitcoin ETFs launched by Blackrock and Grayscale (GBTC). This role involves creating and redeeming ETF shares to ensure their alignment with underlying assets. 

Major exchanges such as Nasdaq, CBOE, and NYSE Arca have also filed for SEC approval to trade related ETF options, indicating the growing interest in crypto-related financial instruments. 

In January, it was reported that Morgan Stanley is exploring adding spot Bitcoin ETFs to its brokerage platform. If approved, Morgan Stanley would be the first among large registered investment advisor networks and broker-dealer platforms to list the ETFs, potentially paving the way for other major firms to follow suit.

Despite Goldman Sachs’ skeptical stance, industry analysts predict that most major platforms and networks will eventually approve Bitcoin ETFs.

The approval of these ETFs by various platforms is expected to significantly expand Bitcoin’s addressable market, potentially opening the floodgates for increased inflows from other prominent financial institutions.

As of this writing,  the price of BTC stands at $65,600, maintaining a trading range between the $64,400 level and the $66,500 mark over the past few days

Featured image from Shutterstock, chart from TradingView.com