For the first time ever, Goldman Sachs, the world’s second-largest investment bank, has recognized the growing influence of cryptocurrencies in its annual shareholder letter. In its 2024 shareholder letter, Goldman Sachs addressed the growth of financial markets and emphasized the impact of emerging technologies. “The growth of electronic trading and the introduction of new products and technologies, including trading and distributed ledger technologies, such as cryptocurrencies, and AI technologies, has increased competition,” the letter stated.
Goldman Sachs acknowledged that competition in financial services is no longer limited to traditional products. The letter noted,
We also compete on the basis of the types of financial products and client experiences that we and our competitors offer. In some circumstances, our competitors may offer financial products that we do not offer and that our clients may prefer, including cryptocurrencies and other digital assets that we cannot or may choose not to provide.
As CNF reported in February, Goldman Sachs increased its Bitcoin exposure through Exchange-Traded Funds (ETFs) to $2.3 billion, according to its 13F filing reports. The firm expanded its Bitcoin ETF portfolio with $1.27 billion in BlackRock’s IBIT and $288 million in Fidelity Wise Origin Bitcoin Fund (FBTC), along with additional holdings in other Bitcoin-related assets. Other financial giants, including Morgan Stanley and Bank of America, have also acquired shares in spot Bitcoin ETFs, further integrating these products into traditional financial markets and making them accessible to their clients.
While acknowledging the potential of blockchain and digital assets, Goldman Sachs also highlighted the risks associated with these technologies. The letter warned that financial products utilizing distributed ledger technology could be highly volatile and susceptible to cyber threats or have other inherent weaknesses. The firm also pointed out potential risks in facilitating client activities related to blockchain-based assets, investing in crypto firms, and accepting digital assets as collateral.
Trump’s Crypto-Friendly Policies
Under President Donald Trump’s administration, the United States has adopted a more crypto-friendly stance, signaling a shift in federal policy toward digital assets. On March 7, President Trump hosted the inaugural “Crypto Summit” at the White House. During this event, he signed an executive order establishing a Strategic Bitcoin Reserve.
In a parallel development, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 122 (SAB 122), effectively rescinding the previous guidance under SAB 121. SAB 121 had required entities safeguarding crypto assets for customers to recognize these assets and corresponding liabilities on their balance sheets. The rescission, prompted by extensive feedback from stakeholders, has encouraged more financial institutions to engage in cryptocurrency custody services.
Additionally, the Office of the Comptroller of the Currency (OCC) eased regulations, allowing national banks and federal savings associations to handle crypto custody, process stablecoin transactions, and operate blockchain nodes, further integrating digital assets into traditional finance.
Bitcoin surged to an all-time high of nearly $109,000 in January, coinciding with Trump’s inauguration. However, it has since lost ground, recently trading at $83,944, reflecting a 1.42% increase in the past 24 hours. Over the past week, Bitcoin has dropped 2.47%, with its trading volume experiencing a slight 1.63% decline.