Goldman Sachs, the world’s second-largest investment bank, has officially acknowledged the growing importance of cryptocurrencies in financial markets for the first time in its 2024 annual shareholder letter.
This marks the first time the firm has explicitly mentioned cryptocurrencies in its annual report, reflecting the evolving world of digital assets on Wall Street.
In its letter, Goldman Sachs cited the impact of advances in electronic commerce, emerging financial products, and technologies such as artificial intelligence (AI) and distributed ledger technology, including cryptocurrencies.
“The growth of electronic commerce and the introduction of new products and technologies, including trading and distributed ledger technologies such as cryptocurrencies and artificial intelligence technologies, have increased competition,” the letter said.
The admission signals a shift in Wall Street’s perspective on digital assets. Before 2024, Goldman Sachs’ shareholder letters did not mention “cryptocurrency” or “blockchain.” However, the financial giant’s approach appears to have shifted as Bitcoin’s growing adoption and the U.S. government takes a more positive stance.
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Goldman Sachs has steadily increased its exposure to the sector, despite previously taking a cautious stance on Bitcoin and digital assets. The bank has significantly increased its spot Bitcoin ETF holdings, holding $1.27 billion in BlackRock’s IBIT and $288 million in Fidelity’s FBTC as of Dec. 31, 2024. Goldman’s investment in IBIT increased by 88% quarter-over-quarter, while its stake in FBTC grew by 105%.
While Goldman Sachs embraces certain aspects of blockchain and crypto, it remains cautious about the risks associated with these technologies. The letter cited concerns about market volatility and cybersecurity vulnerabilities related to distributed ledger technology.
“While the prevalence and scope of applications of distributed ledger technology, cryptocurrencies, and similar technologies are increasing, the technology is nascent and may be vulnerable to cyberattacks or have other inherent weaknesses,” the letter said.
Goldman Sachs CEO David Solomon has previously expressed skepticism about Bitcoin’s long-term viability. “I’ve always said I think this is a speculative investment,” Solomon said last summer. However, he acknowledged blockchain technology’s potential to reduce inefficiencies in the financial system. In December 2024, Solomon said the firm would “consider” entering the Bitcoin and Ethereum markets if regulatory conditions in the U.S. changed.
*This is not investment advice.