Goldman Sachs Executive Warns Against Bitcoin ETFs
Sharmin Mossavar-Rahmani, head of Goldman Sachs Private Wealth Management’s investment strategy group, recently cautioned investors about the risks associated with Bitcoin ETFs. According to The Wall Street Journal, Mossavar-Rahmani stated that digital currencies are still more like gambling than a suitable investment for retirement accounts.
Mossavar-Rahmani emphasized that cryptocurrencies, including Bitcoin and ETFs, should not be considered part of an investment portfolio. However, they acknowledged that individuals can use them for speculative purposes if desired.
Potential Interest in Bitcoin ETFs
These remarks come after reports suggested that Goldman Sachs was considering entering the Bitcoin exchange-traded fund space. The bank was reportedly exploring a collaboration with BlackRock and Grayscale, two prominent financial institutions.
If Goldman Sachs were to become an authorized participant (AP) in the ETF sector, it would play a crucial role in ensuring the alignment of ETF shares with their underlying assets. This would involve creating and redeeming ETF shares to accurately reflect their market value.
Similarities to SEC Chairman’s Commentary
Mossavar-Rahmani’s comments echo statements made by SEC chair Gary Gensler. Gensler has expressed skepticism towards cryptocurrencies and highlighted their speculative and volatile nature. He has also raised concerns about their potential involvement in illicit activities such as money laundering and ransomware.
Interestingly, Goldman Sachs previously outlined the advantages of Bitcoin ETFs for institutional investors. They highlighted the opportunities for low-cost trading, active engagement in arbitrage schemes, and options hedging.
Hot Take: Goldman Sachs Executive Casts Doubt on Bitcoin ETFs
Goldman Sachs executive Sharmin Mossavar-Rahmani has cautioned investors against considering Bitcoin ETFs as suitable investments for their portfolios. While the bank was reportedly exploring the possibility of entering the Bitcoin ETF space, Mossavar-Rahmani emphasized that digital currencies are still akin to gambling and not appropriate for retirement accounts. These remarks align with SEC Chairman Gary Gensler’s skepticism towards cryptocurrencies and their potential involvement in illicit activities. It is interesting to note that Goldman Sachs had previously acknowledged the advantages of Bitcoin ETFs for institutional investors. This cautionary statement raises questions about the future of Goldman Sachs’ involvement in the cryptocurrency market.
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