The market for Exchange-Traded Funds (ETFs) linked to cryptocurrencies has witnessed a significant uptick since its inception, marking a significant development for both Bitcoin (BTC) and Ethereum (ETH) ETFs.
Goldman Sachs Shows Preference for ETH ETF
Leading investment firm Goldman Sachs has demonstrated a high level of confidence in the sector by ramping up its investment in Ethereum ETFs by a massive 2,000% in the final quarter of 2024.
As per the firm’s Form 13F submission to the SEC, Goldman Sachs increased its holdings in Ethereum ETFs from $22 million to $476 million.
The company spread its investments almost evenly between BlackRock’s iShares Ethereum Trust (ETHA) and the Fidelity Ethereum Fund (FETH), in addition to injecting $6.3 million into the Grayscale Ethereum Trust ETF (ETHE).
Concurrently, the corporation raised its holdings in Bitcoin ETFs by 114%, reaching $1.52 billion, with a substantial $1.28 billion investment in the iShares Bitcoin Trust (IBIT) and $288 million in the Fidelity Wise Origin Bitcoin Fund (FBTC).
Is It Ethereum’s Turn Now?
On February 11, there was a $56.7 million outflow from Bitcoin ETFs, while Ethereum ETFs witnessed inflows of $12.6 million, according to Farside Investors.
This shift in capital allocation indicates a growing preference for investment products based on Ethereum over those tied to Bitcoin.
Therefore, with Ethereum ETFs attracting fresh investments, there is speculation that an “Ethereum Season” might be on the horizon.
Furthermore, Goldman Sachs’ recent disclosures indicate a deepening commitment to the crypto ETF market, with the firm now holding $3.6 million in Grayscale Bitcoin Trust (GBTC) while increasing its exposure to Bitcoin and Ether ETFs.
The surge in holdings corresponds to the price appreciation of BTC and ETH by 41% and 26.3%, respectively, in Q4, as reported by CoinGecko.
As part of its strategic portfolio realignment, Goldman Sachs divested its positions in ETFs from Bitwise, WisdomTree, Invesco-Galaxy, and ARK-21Shares.
This extension of investments follows its initial entry into spot crypto ETFs in Q2 2024, with an acquisition of $418 million worth of Bitcoin ETFs.
Future Plans of the Firm
With its aggressive approach towards Bitcoin and Ethereum ETFs and an expanding crypto investment portfolio, the banking powerhouse is solidifying its position as a significant player in the changing landscape.
Commenting on this, Mathew McDermott, the bank’s Global Head of Digital Assets, hinted at a potential separation of its digital asset platform into an independent entity.
Therefore, as institutional involvement deepens in the blockchain space, the unfolding developments promise to be intriguing to watch.