Goldman Sachs is buying NEOS Investments, the firm behind BTCI, a $1.1 billion bitcoin synthetic exchange-traded fund yielding roughly 27%.
Deal terms
The cash-and-equity transaction values NEOS at up to $2.25 billion, is tied to performance targets, and is expected to close in the first quarter of 2027 pending regulatory approval, Goldman said Wednesday.
NEOS co-founders Troy Cates and Garrett Paolella will join the bank as partners once the deal closes.
How BTCI works
BTCI launched in October 2024 and crossed $1 billion in assets in under two years, according to Bloomberg senior ETF analyst Eric Balchunas.
The fund does not hold bitcoin directly. Instead it holds spot bitcoin exchange-traded products and sells call options against those positions to fund monthly distributions, meaning investors collect income but give up some upside during rallies.
BTCI charges a 0.99% expense ratio and is down 42.55% over the past year, with shares sliding from a 52-week high of $65.87 to about $28.40. Its prospectus notes distributions may partly represent a return of capital rather than net investment income.
Leapfrogging BlackRock
Goldman had filed its own Bitcoin Premium Income ETF with the SEC on April 14, a structurally similar covered-call product it never launched.
Balchunas wrote:
“Nowww I get why GS never launched the BTC covered call product they filed months ago. Better to leapfrog BlackRock’s $BITA vs me too?”
BlackRock listed BITA on Nasdaq on June 16, targeting a 15-25% annual yield by selling covered calls on 25-35% of its IBIT holdings at a 0.65% fee.
The NEOS purchase also hands Goldman a $30 billion options-based ETF platform spanning 19 funds. Combined with its existing $40 billion in options-based assets and December’s Innovator Capital Management deal, Goldman will oversee more than $130 billion in ETF assets, ranking eighth among active ETF managers globally.
The derivative income category now holds roughly $180 billion industry-wide, compounding at over 70% annually since 2021, per Morningstar.
