As crypto enthusiasts we definitely should know something of what is Blockchain, and Decentralised Finance, but can you believe that Wall Street investment bank Goldman Sachs don’t seem to show a basic understanding of Blockchain and Decentralised Finance?.
Golaman Sachs had filed for a DEFI ETF with the U.S. Securities and Exchange Commission (SEC), however that DEFI ETF known as “Goldman Sachs Innovate DeFi and Blockchain Equity ETF” looks to track companies that have little to do with Blockchain and DEFI.
The ETF is looking to track the performance of a Index Fund that’s not listed Blockchain or DEFI companies
The ETF aims to track the performance of a Index Fund that has not listed Blockchain or DEFI companies.
Goldman Sachs Innovate DeFi and Blockchain Equity ETF, mirrors the performance of the ‘Solactive Blockchain Technology Performance-Index’ as the ETF tracks the performance of that index.
The obvious error here is that the ‘Solactive Blockchain Technology Performance-Index fund’ does not have Blockchain or DEFI companies listed in it, as it has listed companies that are giant tech, fintech and telecom companies.
Take a look at the companies listed in the ‘Solactive Blockchain Technology Performance-Index fund’ and evaluate the logic yourself.
I think we crypto enthusiasts know that Facebook, Paypal, Microsoft, Visa, Mastercard, Nokia are not Blockchain companies and have nothing to do with DEFI, please!!
Logic of considering these companies as Blockchain or DEFI entities is not understandable
I can understand that many of these companies are looking to integrate a bit of Blockchain with Palpay allowing for crypto buying etc but these companies are in no way embracing the ethos of Blockchain and DEFI which is basically - decentralisation, allowing for permissionless transactions without middle man and things like that.
For instance, we all know that Paypal is the middleman who takes a lot of fees from our payment transactions. Palpal will hold your cryptos for you in the crypto service they are giving customers.
Facebook is not decentralised with the entity having control of your personal data which it is known to have leaked and sold in history.
Visa and mastercard, are traditional payment channels looking to integrate crypto but they are not blockchain pioneering companies.
IBM, is a company that does built some Blockchain related products, however, it’s not a company that has its main business as Blockchain which is obvious to anyone.
Also none of these companies have anything to do with DEFI, any crypto novice can tell you that!!
These Hi-fi Fund managers should educate themselves on basics of Blockchain and Defi
Ha...this “Goldman Sachs Innovate DeFi and Blockchain Equity ETF” is a joke indeed!!
These so called world class wealth managing investment experts and fund managers should first educate themselves in Blockchain, crypto and DEFI before designing such flawed investment products!!
Anyway, let me list some Blockchain and DEFI companies, which can be listed in ETF products - AAVE, Square, Strike, VeChain, Binance, crypto.com, Consensys, Matic…
You get the drift, maybe these companies are not listed as stocks to design products including them, still these are Blockchain companies and companies that engage in DEFI businesses, anyone can tell that if they are following the crypto space for just a little while.
All that these investment managing experts need to do is, go explore some hot Blockchains - (Ethereum will do for a start) and pick a project that is dealing with Blockchain and DEFI business, or pick up companies that do Blockchain businesses and offer DEFI solutions.
From https://cryptodiffer.com/news/ethereum-defi-ecosystem/ . Graphic showing the Ethereum ecosystem as it was in 2019
A real Blockchain or DEFI ETF will yield a crazy rate of return of 500 - 2000%!!
Also, did you check the performance of the ‘Solactive Blockchain Technology Performance-Index fund’ that the ‘Goldman Sachs Innovate DeFi and Blockchain Equity ETF’ is set to track?
Check the original document at here
The 1 year returns of the ‘Solactive Blockchain Technology Performance-Index fund’ is a modest 35%???. Any one following the crypto space knows the kind of returns fundamentally good Blockchain projects can give investors.
Check Coingecko for data on the returns the projects I mentioned here have given -
1 year returns of BNB is - 1458.5% , similarly for Matic it has been 4842%, for Vechain it has been 420%.
Obviously an index fund that given a modest return of 35% in the past one year does not contain Blockchain and DEFI companies in it.
True it’s been a bull market, for 1 year returns for the real Blockchain companies I mentioned here to be so exploded but if you consider the gains from inception it will be always exponential irrespective of whether it was a bull or a bear market a year or 2 ago.
Matic's explosive ROI figure taken from https://www.coingecko.com/en/coins/polygon
For example the ROI returns on Polygon that’s Matic is - 38,387%!! , but the gains from inception one gets from investing in the ‘Solactive Blockchain Technology Performance-Index fund’ is 75%.
Definitely, this index fund is not exposed to Blockchain or DEFI companies, else ROI in the long run will be crazy, a definite 2000% at least!!
Please note this article is my opinion and no investment advise, you are responsible for the outcomes of your investment decisions!!