Introduction
Goldman Sachs is ready to start offering crypto-curious clients of Galaxy digital the Ethereum fund. It was confirmed when the documents filed by the U.S. Securities and Exchange Commission (SEC) were released. The proposed plans will see the clients have continued access to Ether which is the cryptocurrency used in the Ethereum fund. The filed documents were able to show more things apart from access to Ether.
The documents also showed that Goldman Sachs would get a recommendation fee for bringing the clients to use the Ethereum fund Galaxy digital has agreed to liquidate the future Bitcoin trades. SEC has however been picky with some of the proposal brought by Goldman Sachs like the use of actual Bitcoin in crypto currency trading. SEC allowed the trading of ETFs to begin in October 2021. EFTs that contained real Bitcoin was rejected due to a growing worry of the security of the investors in the crypto currency market. Galaxy Digital will continue to tactically place itself between financial institutions and crypto investing.
The agreement will see Goldman Sachs get a referral fee for the introduction of clients to the Ethereum fund. It is according to the filed SEC documents. A placement fee will be given to CAIS Capital LLC when the investors are referred. The clients who were to invest not less than $250,000, has seen Ethereum fund in the last 12 months make sales of more than $50 million for its first 30 clients.
The Ethereum Fund
The Ethereum Fund is the best and safest way to access Ether. Ether happens to be the largest crypto asset in the crypto asset management firm.
The Growth of Crypto Alliance between Goldman and Galaxy
Galaxy Digital is a global asset driven by the management of blockchain investments and agreed to liquidate Goldman’s Bitcoin trades. Goldman Sachs has recently re-opened a trading desk that will deal with crypto trades and will bound itself by the use of global currencies and surfacing of the market divisions, it is after taking a three-year break. The heads of Goldman Sachs in June 2021 announced their plans to commence the offering of the Ethereum fund and trading after their large investors showed interest.
The investors have benefited from the merging of Galaxy digital and Goldman Sachs in that they can directly access and explore Ethereum. Unlike before, where they had to sign financial contracts, which would be valued according to the value of the principal asset. The contract usually carries some risks and would be used to trade. Such are used in particular markets to reduce the risk of fluctuation of the price of the principal asset. Many crypto experts have stated that trading directly to the principal asset will have a positive impact on the current price of the asset. Other people, on the other hand, have questioned this move in that they criticize the custody solutions provided of the physical currencies.
The Targeting of Crypto Investors by Galaxy
The coming together of Goldman Sachs and Galaxy digital has strengthened the ability of Galaxy to influence and get intuitional crypto investors. Galaxy Digital has made similar mergers with other investment firms like Morgan Stanley. This arrangement has allowed more investors to have the ability to gain access to Bitcoin funds. The sales of these proceedings have brought the generation of over $250 million worth of sales. Galaxy has continued to grant its investors access to Bitcoin funds through acquisitions of other digital management firms like Vision Hill Group Inc. and Bitgo. These acquisitions have taken an upward trajectory over the last 12 months.
The banking sector has regulations that prohibit them from the direct investment of crypto. They have benefited fully from the investment firms like Galaxy who act as a bridge for financial institutions and direct cryptocurrency investment.
On the other hand, even Goldman Sachs is offering Bitcoin trading to investment funds like the CME group. Galaxy Digital has this arrangement that is providing liquidity. It shows that the partnership of Goldman Sachs and Galaxy digital is not the first more people are keen on entering into crypto trading. More financial institutions are set to leave traditional banking and join crypto investments.
Sources:
bitwiseinvestments.com/crypto-funds/ethereum/
www.coindesk.com/business/2022/03/08/goldman-sachs-offering-eth-fund-to-clients-through-galaxy-digital/
cointelegraph.com/news/goldman-sachs-is-hooking-up-clients-with-galaxy-digital-s-eth-fund
