Goldman Sachs Buys NEOS Investments for Up to $2.25 Billion in Crypto Expansion

Goldman Sachs is buying NEOS Investments, the manager of a Bitcoin-linked income ETF called BTCI, for up to $2.25 billion in cash and stock. This acquisition will bring Goldman's ETF assets under management above $130 billion, ranking it among the world's top eight active ETF managers.

NEOS' flagship product, BTCI, has $1.1 billion in assets under management and a 27% annual yield. It uses a synthetic structure that holds spot Bitcoin ETPs and sells call options to pay monthly distributions, but does not directly hold Bitcoin. This means investors give up some of the upside when Bitcoin prices surge.

Eric Balchunas, Bloomberg Intelligence's senior ETF analyst, notes that BTCI surpassed $1 billion in assets in less than two years after its October 2024 launch. He also speculates that Goldman opted to buy an established product instead of building one itself, as the bank had filed for a similar Bitcoin covered-call ETF but never launched it.

The acquisition will also give Goldman control over NEOS' 19 funds and options-based ETF platform with $30 billion in assets. This combined total exceeds $130 billion when including Goldman's existing $40 billion in options-based ETF assets and the assets from its Innovator Capital Management acquisition announced in December.