"DeFi ETF" Without DeFi? Goldman Sachs Applies for "DeFi ETF" Tracking a Series of Tech Giant Stocks

Goldman Sachs, the Wall Street investment bank, has applied to the U.S. Securities and Exchange Commission (SEC) for a "DeFi ETF." However, contrary to what most would expect from DeFi, this fund is actually linked to the price volatility of tech giants like Nokia and Facebook.

No DeFi in DeFi Fund

According to the application submitted to the SEC by Goldman Sachs on 7/26, the fund is named "Goldman Sachs Innovate DeFi and Blockchain Equity ETF," which translates to "Goldman Sachs Innovate DeFi and Blockchain Equity ETF."

The purpose of this ETF is to track the performance of decentralized finance and blockchain indices provided by the German index provider Solactive. However, based on the Solactive index, it primarily tracks the stock prices of companies such as Nokia, Microsoft, Facebook, PayPal, Visa, which are not directly related to DeFi as people might imagine.

Many people wonder, "How is this related to blockchain and DeFi?" The answer lies in Solactive's document: "The index tracks companies with significant investments in the blockchain field." In other words, stocks of companies that invest in blockchain are considered as the target of funds related to DeFi and blockchain.

According to Solactive's criteria, inclusion in the index requires a market capitalization of over $500 million, an average daily trading volume of over $500 million in the past six months, and the ETF applied by Goldman Sachs is expected to invest 80% in securities, stocks, and depositary receipts in the Solactive index.

Evolution of Goldman Sachs

Goldman Sachs' attitude towards cryptocurrencies has been fluctuating. Although it briefly launched Bitcoin futures in 2018, it ceased business due to a bear market and a sudden drop in trading volume.

Subsequently, it criticized Bitcoin as not being a proper asset class last year, revealed in May this year that it would launch Bitcoin non-deliverable forward (NDF) trading, and in June stated that it was not suitable for retail investors as it did not meet investment standards, leaving people puzzled.

According to a forthcoming report on institutional investors by Decrypt, Coinbase pointed out that while the SEC has currently put about 12 Bitcoin ETF applications on hold, approval is only a matter of time and will be achieved sometime this year or next year.