Goldman Sachs Acknowledges Crypto for the First Time in Annual Report

For the first time, Goldman Sachs, the world's second-largest investment bank, has acknowledged cryptocurrencies in its annual shareholder letter.

“The rise of electronic trading, along with blockchain and AI, has intensified competition,” the 2024 letter stated.

In 2017, terms like “cryptocurrency” and “blockchain” were absent from Goldman’s reports. However, Bitcoin’s growth and the Trump administration’s pro-crypto stance have shifted Wall Street’s perspective. The letter noted that competitors offer financial products Goldman does not, including digital assets that clients may prefer.

Goldman has cautiously entered the crypto space, launching a trading desk in 2021 and a Digital Asset Platform in 2022. It also tested the Canton Network, a blockchain-based system, signaling growing institutional interest in blockchain applications.

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Despite this, the bank warned of risks tied to distributed ledger technology, citing potential cyber threats and market instability. “Although adoption is growing, blockchain remains in its early stages and may be vulnerable,” the letter stated.

Goldman CEO David Solomon sees blockchain as promising but remains skeptical of Bitcoin. “I’ve always viewed it as speculative,” he said last summer, though he acknowledged it “could” serve as a store of value.

In December, Solomon said Goldman would reconsider Bitcoin and Ethereum if regulations changed. The following month, he reaffirmed Bitcoin’s speculative nature and denied it posed a threat to the U.S. dollar.

Despite this cautious stance, Goldman increased its holdings in spot Bitcoin ETFs by late 2024. By year-end, it had $1.27 billion in BlackRock’s IBIT, an 88% increase from the previous quarter, and $288 million in Fidelity’s FBTC, up 105%.