Goldman Sachs Adds Bitcoin Income ETF Through NEOS Deal

TLDR

• Goldman Sachs agreed to acquire NEOS Investments in a deal valued at up to $2.25 billion.
• The acquisition gives Goldman access to BTCI, a bitcoin income ETF with about $1.1 billion in assets.
• BTCI uses spot bitcoin ETPs and covered-call strategies to generate monthly distributions for investors.
• NEOS manages about $30 billion across 19 options-based ETFs, expanding Goldman’s presence in income-focused funds.
• Goldman Sachs said its combined ETF assets under supervision could exceed $130 billion after the NEOS and Innovator deals.

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Goldman Sachs has agreed to acquire NEOS Investments in a cash-and-equity deal that could value the ETF manager at up to $2.25 billion. The transaction would give the bank control of BTCI, a $1.1 billion Bitcoin income ETF known for high monthly distributions. Goldman expects the deal to close in the first quarter of 2027, subject to regulatory approval and performance conditions. The purchase also broadens Goldman’s ETF reach because NEOS runs a lineup of income funds.

Goldman Sachs Expands Bitcoin ETF Business

NEOS launched the NEOS Bitcoin High Income ETF, or BTCI, in October 2024. The fund has gathered more than $1 billion in assets in less than two years, according to Bloomberg ETF analyst Eric Balchunas.

BTCI does not hold bitcoin directly. It owns spot bitcoin exchange-traded products and sells call options against those holdings. The strategy aims to generate monthly income, but investors can give up part of the upside when bitcoin prices rise sharply.

Goldman filed for the Goldman Sachs Bitcoin Premium Income ETF with the SEC on April 14. The proposed fund used a similar covered-call structure, but the bank has not launched it.

The NEOS deal gives Goldman access to an established bitcoin income product instead. BTCI charges a 0.99% fee and has fallen 42.55% over the past year. Its prospectus also says some distributions may include a return of investor capital.

NEOS manages about $30 billion across 19 options-based ETFs. Goldman already manages about $40 billion in that category and is also adding Innovator Capital Management through a separate acquisition announced in December.

Goldman Sachs said its ETF assets under supervision, including Innovator and NEOS, would exceed $130 billion. The bank said that total would place it eighth among active ETF managers worldwide.

Bitcoin Income ETFs Gain More Competition

BlackRock launched the Bitcoin Premium Income ETF, BITA, on Nasdaq in June. The fund targets a 15% to 25% annual yield and sells covered calls on part of its IBIT holdings. BITA charges a 0.65% expense ratio.

The broader derivative income ETF market has grown to about $180 billion, according to Morningstar. NEOS co-founders Troy Cates and Garrett Paolella will join Goldman Sachs as partners after the deal closes under the announced agreement.

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Source: https://blockonomi.com/goldman-sachs-adds-bitcoin-income-etf-through-neos-deal/