Goldman Sachs Applies for Bitcoin ETF, Wall Street's Final Bastion Falls

Original Article Title: "Goldman Sachs Applies for Bitcoin ETF, Wall Street's Final Fortress Falls"

Original Article Author: Xiaobing, DeepTech TechFlow

September 12, 2017, New York, CNBC Institutional Investor Conference.

JPMorgan Chase CEO Jamie Dimon stood on stage and threw out a sentence to the entire audience of fund managers: "Bitcoin is a fraud, even worse than the tulip bubble. If anyone is trading Bitcoin at JPMorgan Chase, I will fire them immediately, for two reasons: violating regulations and being stupid."

Bitcoin dropped 2% that day, to $4,106.

On April 14, 2026, nine years later, Goldman Sachs submitted an application to the SEC for the Goldman Sachs Bitcoin Premium Income ETF. Just six days earlier, Morgan Stanley's spot Bitcoin ETF (MSBT) had just been listed, attracting $34 million on its first day with a fee of 0.14%.

On the same day, Trump-nominated Fed Chair candidate Kevin Warsh submitted a 69-page financial disclosure document, which prominently listed investments in Polymarket, Solana, the Ethereum development platform Tenderly, and the Bitcoin Lightning Network startup Flashnet.

Three things happened in the same week.

Wall Street's attitude towards Bitcoin, from "this is a fraud" to "we're selling our own product," took a full nine years.

Not a Spot ETF, What Is Goldman Sachs Selling?

Let's first mention a market-overlooked detail: Goldman Sachs' application this time is not for a spot Bitcoin ETF.

It is applying for a "premium income" ETF, with the core strategy being covered calls. In simple terms, the fund holds shares of a spot Bitcoin ETF (mainly BlackRock's IBIT), while selling call options, collecting option premiums, and regularly distributing dividends to investors. The option coverage rate fluctuates between 40% and 100%.

What does this mean? If Bitcoin skyrockets, you will only earn a portion. If Bitcoin trades sideways or makes a small gain, you will earn more than holding Bitcoin alone because of the additional income from option premiums.

Goldman Sachs' choice of this product structure precisely exposed its client profile: not the retail investors looking to 10x their investment with Bitcoin, but rather institutional allocators managing billions or tens of billions of dollars. This money needs a reason to enter Bitcoin, and that reason cannot be "belief" but rather "yield."

Goldman's ETF essentially says: Bitcoin's volatility itself is an asset that can be monetized. You don't need to bet on the direction; you just need to acknowledge that this market is active enough for options sellers to make money.

This approach aligns closely with BlackRock's upcoming BITA. BITA also follows a covered call strategy, converting Bitcoin's volatility into monthly dividends. The difference is that BlackRock has its massive $550 billion IBIT as a large underlying position to provide liquidity support, while Goldman chose not to hold Bitcoin directly but to indirectly hold spot ETF shares through a Cayman Islands subsidiary to avoid regulatory constraints.

With these two Wall Street giants almost simultaneously focusing on the same product race, it seems to suggest one thing: the Bitcoin spot ETF war has concluded, and the next battle is "who can package Bitcoin into a product understandable to traditional asset management clients."

From Buying Others' Products to Creating Its Own: Goldman Sachs' Nine-Year Transformation

Looking at the timeline, Goldman Sachs' attitude shift towards cryptocurrency is one of the most dramatic turnarounds on Wall Street.

In 2021, Goldman Sachs restarted its cryptocurrency trading desk, offering Bitcoin futures and options trading to clients. At that time, the entire industry was still using the rhetoric of "we focus on blockchain technology, not Bitcoin" to express the ambiguous "I want to get involved but dare not say" sentiment.

By late 2024 to early 2025, Goldman Sachs' 13F filings began to reveal its true colors. As of Q4 2024, Goldman held $1.57 billion worth of Bitcoin ETF shares, with $1.27 billion in BlackRock's IBIT and $288 million in Fidelity's FBTC, a 121% increase from the previous quarter.

By the Q4 2025 13F disclosure, Goldman indirectly held about 13,741 Bitcoins through various spot Bitcoin ETFs, valued at around $17.1 billion. Even more astonishingly, it simultaneously held around $1 billion in Ethereum ETFs, $153 million in XRP ETFs, and $108 million in Solana ETFs. CEO David Solomon was also invited to speak at the World Liberty Financial Forum.

From Buying Others' Products to Building Its Own Products to Sell, Goldman Sachs Took Less Than Two Years.

Morgan Stanley: 16,000 Financial Advisors Are Its Biggest Weapon

Morgan Stanley's pace is faster and more aggressive.

MSBT debuted on NYSE Arca on April 8, becoming the first-ever spot Bitcoin ETF issued directly by a major bank in the United States. With a fee of 0.14%, 11 basis points cheaper than BlackRock's IBIT, it immediately sparked a price war upon listing.

Bloomberg's ETF analyst Eric Balchunas rated MSBT's debut performance as "in the top 1% of all ETF launches" and predicted that its assets under management could reach $5 billion within a year.

But MSBT's real weapon is not its fee but its distribution network. Morgan Stanley has 16,000 wealth management advisors overseeing $9.3 trillion in client assets. Previously, these advisors could only recommend third-party Bitcoin ETFs, but now they can promote their in-house product.

More importantly, Morgan Stanley has already advised clients to allocate 2% to 4% of their portfolios to cryptocurrency. When a platform managing $9.3 trillion suggests such an allocation, even if only a small portion of clients follow through, the funds flowing into the crypto market would be immense.

Morgan Stanley also plans to offer spot trading for Bitcoin, Ethereum, and Solana through E*Trade in the first half of 2026 and has already submitted applications for Ethereum and Solana trusts. This is not a test but a full-fledged rollout.

Coinbase's Co-Head of Institutional Business, Brett Tejpaul, made a precise statement: "This marks the second wave of digital asset adoption."

The first wave was the approval of spot ETFs in 2024, channeling funds into the market through ETFs; the second wave is banks getting directly involved in product creation, integrating crypto assets into the entire chain of traditional wealth management.

Secrets in a 69-Page Document: Next Fed Chair Voted for Polymarket and Solana

But perhaps the most interesting news this week was not about Goldman Sachs and Morgan Stanley but about Kevin Warsh's 69-page financial disclosure.

Warsh is Trump's nominee for the next Federal Reserve Chair, planning to succeed Jerome Powell, who is set to step down in May. His 69-page OGE 278e form was submitted on April 14th, revealing a surprising investment list: investment in the Ethereum L2 network Blast, investment in the decentralized prediction market Polymarket, equity in the Bitcoin Lightning Network startup Flashnet, investment in Tenderly (an Ethereum development platform), and a previous investment in Bitwise (an asset management company that oversees a physically-backed Bitcoin ETF).

Through DCM Investments and the AVF series of funds, Warsh has a wide-ranging presence in areas such as DeFi lending, decentralized derivatives, L1 and L2 networks, prediction markets, and Bitcoin payment infrastructure.

While most of these positions are relatively small (per OGE rules, projects without specified amounts indicate a value below $1000), and Warsh has committed to divest entirely post-confirmation, the signal is highly significant: the individual soon to oversee U.S. monetary policy is not passively holding a bit of Bitcoin in a brokerage account but actively seeking out and investing in the cutting-edge protocols and infrastructure of the crypto ecosystem.

Previously, Warsh has publicly stated that Bitcoin is a "significant asset," a "good cop" for policy, capable of signaling when the Fed is behind the inflation curve. Michael Saylor predicts he will become the "first Bitcoin-friendly Federal Reserve Chair."

Back in 2017, this statement, when juxtaposed with Jamie Dimon's "Bitcoin is a fraud" declaration, might have been dismissed as the rambling of a madman.

Wall Street Has No Faith, Only Ledgers

Putting these three things together paints a clear picture.

Wall Street never does anything out of "faith." It has only one motive for every action: profit. When these institutions act collectively, they don't see the philosophical significance of Bitcoin but rather an asset class with trillions of dollars in annual trading volume, a volatility that consistently sits above 60%, a maturing options market for the asset class, and the management fees, trading commissions, and structured product premiums that can be extracted around this asset class.

What does this mean for retail?

In the short term, more ETFs mean fiercer fee wars. MSBT's 0.14% has already pushed the industry's baseline lower, and yield-hungry ETFs from Goldman Sachs and BlackRock will further compete for the conservative funds that "want returns but don't want all the volatility." The onboarding of funds into Bitcoin is widening.

In the midterm, as Wall Street begins to build yield-generating products around Bitcoin, it is effectively transitioning Bitcoin from a "speculative asset" to an "alternative yield asset." This will attract a large number of pension funds, insurance funds, and university endowments that were previously deterred by the "excessive volatility." Once this money comes in, it is unlikely to go out.

In the long term, when the investment portfolios of Federal Reserve Chair candidates include Polymarket and Solana, when the two most arrogant investment banks on Wall Street compete to issue Bitcoin ETF products, the question of "Is Bitcoin a legitimate asset" no longer needs to be answered.

The question has become: In this new order, which side are you on?

In 2017, Jamie Dimon said, "I would fire any employee trading Bitcoin." In 2026, his peers are rushing to sell Bitcoin to every customer walking through the bank's doors.

Wall Street has no faith, only ledgers. When the number on the ledger is large enough, any faith will change.

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