Goldman Sachs is about to offer Bitcoin and other digital assets to its wealth management clients
Goldman Sachs is about to offer clients of its private wealth management group its first investment vehicles for Bitcoin and other digital assets, CNBC has exclusively learned.
Mary Rich, recently named global director of digital assets for Goldman’s private wealth management division, says the bank plans to start offering investments in the emerging asset class in the second quarter. Your promotion should be announced in an internal corporate memo from CNBC on Wednesday.
“”We are working closely with teams across the company to find ways in which retail customers can gain thoughtful and appropriate access to the ecosystem. We expect that in the near future, “said Rich in an interview this week.
Goldman ultimately intends to offer a “full spectrum” of investments in bitcoin and digital assets, “whether through physical bitcoin, derivatives or traditional investment vehicles,” she said.
The move means that clients of two of the world’s leading investment banks – Goldman and Morgan Stanley – will soon have access to an emerging asset class that will fascinate billionaires and digital currency believers alike. Earlier this month, Morgan Stanley told its financial advisors that they could start investing clients in Bitcoin funds from April, CNBC reported for the first time.
Mary Rich, appointed Global Head of Digital Assets for Goldman’s private wealth management division
Source: Goldman Sachs
It is the latest sign of the resilience of blockchain-related assets, including Bitcoin, a new type of money that emerged from the rubble of the 2008 financial crisis and whose exact origins are still unknown. So far, major US banks have largely shunned Bitcoin, finding it too speculative and volatile for customers.
But the industry capitulated after the recent boom in Bitcoin price. The surge has attracted institutional investors, corporate and fintech firms, and the digital asset infrastructure continues to mature.
In the end, according to Rich, it was customer demand that prevailed. Goldman’s private wealth management business is primarily aimed at individuals, families, and foundations that are required to invest at least $ 25 million.
“There is a contingent of customers viewing this asset as a hedge against inflation, and the macro backdrop of the past year certainly helped,” said Rich. “There is also a large contingent of customers who feel that, in a way, we are sitting at the dawn of a new internet looking for opportunities to participate in this area.”
The bank may offer bitcoin mutual funds similar to Morgan Stanley’s, as well as other investment options that “look more like the underlying asset class that is traded around the clock around the world,” Rich said. Some crypto funds, such as the Galaxy Bitcoin Fund, can only be sold or bought once per quarter, while the Galaxy institutional Bitcoin fund can be liquidated weekly.
Goldman is in the process of seeking approvals from regulators such as the Securities and Exchange Commission and the New York Treasury Department, according to persons aware of the matter.
“We are still in the early stages of this ecosystem. Nobody knows exactly how it will develop or what shape it will be,” said Rich. “But I think it’s pretty safe to expect that it will be part of our future.”
Goldman’s move came despite skepticism across the traditional banking industry. That includes the New York-based bank itself: Sharmin Mossavar-Rahmani, chief investment officer for Goldman’s wealth management business, has repeatedly stated that Bitcoin is not suitable for investors.
Until about a year ago, Bitcoin’s market capitalization and trading volume weren’t big enough for large financial institutions to bother to get involved, said Mike Novogratz, CEO-founder of crypto firm Galaxy Digital, in a CNBC interview on Wednesday.
“The adoption is happening faster than predicted,” said Novogratz. “It’s shocking to me how fast people are moving into the system.”
With reports from Jesse Pound of CNBC