Goldman Sachs Expands Bitcoin ETF Holdings: Should You?

Goldman Sachs, one of the world's largest investment banks, has significantly increased its Bitcoin exchange-traded fund (ETF) holdings, according to its latest 13F filing with the U.S. Securities and Exchange Commission (SEC), per Street.com, as quoted on Yahoo Finance.

Increased Investments in Bitcoin ETFs

The filing, dated February 12 and covering Q4 2024, reveals that Goldman Sachs now holds $1.27 billion in the iShares Bitcoin Trust ETF (IBIT), totaling 24,077,861 shares. This marks an 88% increase from its previous filing covering July to September 2024. The iShares Bitcoin Trust ETF provides institutional investors with exposure to Bitcoin without directly holding the cryptocurrency.

Additionally, the firm disclosed a $288 million stake in the Fidelity Wise Origin Bitcoin Fund (FBTC), amounting to 3,530,486 shares — a 105% increase compared to the previous quarter. This ETF also tracks Bitcoin’s price movements, offering a regulated investment option for institutions.

Trump Era a Boon for Bitcoin?

U.S.-listed spot Bitcoin ETFs gathered $4.4 billion in the period from Jan. 13 to Feb. 5, up 175% year over year from $1.6 billion net inflows in the first three weeks since the launch in Jan 2024.The demand for Bitcoin ETFs remains strong despite ongoing tariff concerns.

The surge in investments in spot Bitcoin ETFs coincides with a series of policy announcements from the Trump administration that have renewed interest in cryptocurrencies. The Trump administration's continued support for digital assets further bolsters their position as hedges against inflation.

In the latest development, the Securities and Exchange Commission (SEC) signaled a potential shift in its enforcement approach. The SEC’s decision to reduce the size of its crypto enforcement unit aligns with the Trump administration’s broader push to ease regulatory oversight and spur growth in the digital asset space.

Any Wall of Worry?

US President Donald Trump’s plan to impose tariffs on all steel and aluminum imports triggered a downturn in the cryptocurrency market. Plus, he announced plans to introduce reciprocal tariffs on countries that tax U.S. imports, stating that these measures would take effect “almost immediately” after their official announcement.

Such tariffs may boost inflation and the Fed may not cut rates ahead easily. Risk-on assets generally fare better during lower-rate periods, so Bitcoin, Ethereum, and other cryptocurrencies might react negatively to Trump’s tariff threats.

But then, Bitcoin is often touted as a hedge against inflation and has a fixed supply. This move contrasts with traditional fiat currencies, which central banks can issue in unlimited quantities. Thus, in times of inflation, the value of fiat currencies tends to fall.

Meanwhile, Bitcoin can preserve wealth amid high inflation due to its limited supply. Thus, bitcoin should do well in the tariff-induced inflationary environment.

Having said this, we would like to note that the crypto space is extremely volatile as the industry still needs lot of regulations and structures.

Safe Bitcoin ETFs for Risk Averse Investors

Issuers have introduced various tools to make a high-risk asset like Bitcoin more accessible and appealing to risk-averse investors.Calamos, has launched a suite of Bitcoin buffer ETFs: Bitcoin Structured Alt Protection ETF – January CBOJ, Bitcoin 90 Series Structured Alt Protection ETF – January CBXJ and Bitcoin 80 Series Structured Alt Protection ETF – January CBTJ.

Innovator also launched the Uncapped Bitcoin 20 Floor ETF - Quarterly QBF, the first ETF offering uncapped exposure to Bitcoin’s upside potential while simultaneously capping downside losses. These products some downside protection amid extreme volatility.

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