Goldman Sachs Leaps Into Bitcoin Income ETFs With $2.25 Billion NEOS Buyout

Goldman Sachs is expanding its presence in the cryptocurrency investment market through an agreement to acquire NEOS Investments, the asset manager behind the BTCI spot Bitcoin income fund.

The transaction, announced Wednesday, values NEOS at up to $2.25 billion, with the final consideration consisting of a combination of cash and Goldman Sachs shares. Part of the payment will depend on the company achieving certain performance targets.

The acquisition is expected to close during the first quarter of 2027, subject to regulatory approval.

Goldman Sachs Targets Bitcoin Income Market

NEOS's flagship BTCI fund has accumulated approximately $1.1 billion in assets, according to Bloomberg ETF analyst Eric Balchunas.

Launched in October 2024, BTCI is designed to generate regular income from Bitcoin exposure rather than relying solely on price appreciation. The fund has reportedly generated a yield of around 27%.

Rather than holding Bitcoin directly, BTCI gains exposure through spot Bitcoin exchange-traded products and then sells covered call options against those positions.

The strategy allows the fund to generate option premiums that can be distributed to investors on a monthly basis. The trade-off, however, is that investors may give up some of the upside they would otherwise receive if Bitcoin rises sharply.

Balchunas noted that the approach resembles a strategy Goldman Sachs itself began pursuing earlier this year, making NEOS an established platform that could accelerate the bank's expansion into the market.

Competition Intensifies Around Bitcoin Yield

Goldman Sachs is entering a market that has attracted some of the world's largest asset managers.

BlackRock launched its BITA Bitcoin income ETF on Nasdaq on June 16, targeting an annualized yield of between 15% and 25%. The fund generates income by selling covered calls on approximately 25% to 35% of its exposure to BlackRock's IBIT spot Bitcoin ETF.

BITA charges an expense ratio of 0.65%, while BTCI carries a higher 0.99% fee.

BTCI has also experienced significant price volatility. According to Bloomberg data cited by Balchunas, the fund has fallen approximately 42.55% over the past year, from a 52-week high of $65.87 to around $28.40.

The fund's headline yield also requires careful interpretation. Its SEC filing notes that distributions may, in part, represent a return of capital rather than investment income, meaning the distribution rate does not necessarily represent the fund's underlying investment return.

NEOS Adds a Broader Options Platform

Goldman's acquisition extends beyond BTCI.

NEOS operates a broader platform of options-based ETFs with approximately $30 billion in assets across 19 funds, according to the company. The platform has become one of the fastest-growing segments of the options-based ETF market.

Goldman Sachs already manages roughly $40 billion across its own options-based funds. The firm also announced the acquisition of Innovator Capital Management in December.

Once the transactions are combined, Goldman Sachs expects its total assets in options-based funds to exceed $130 billion, which would place the firm among the world's largest active ETF managers.

The acquisition therefore gives Goldman access not only to NEOS's Bitcoin strategy but also to an established infrastructure for developing income-oriented investment products.

NEOS Founders to Join Goldman Sachs

NEOS co-founders Troy Kets and Garrett Paolella will join Goldman Sachs as partners once the transaction is completed.

Their continued involvement could help Goldman integrate NEOS's investment expertise and accelerate the development of new options-based products.

The move comes as the broader market for derivative-income ETFs continues to expand rapidly. According to Morningstar, assets across the category have reached approximately $180 billion, with the sector recording a compound annual growth rate of more than 70% since 2021.

Goldman Bets on the Next Phase of Bitcoin ETFs

The acquisition signals a broader shift in the cryptocurrency ETF market.

The first wave of spot Bitcoin ETFs gave investors regulated access to Bitcoin price exposure. The next generation of products is increasingly focused on what investors can do with that exposure, including generating income through derivatives.

Goldman Sachs is effectively buying into that second phase rather than building the platform entirely from scratch.

For investors, the appeal is clear: covered-call strategies can generate recurring income from Bitcoin exposure, potentially making the asset more attractive to income-focused portfolios. But the strategy also comes with a fundamental trade-off, as option selling can limit participation in Bitcoin's strongest rallies.

As major financial institutions compete to develop increasingly sophisticated Bitcoin investment products, the ability to balance income generation, upside participation and risk could become one of the defining battlegrounds in the next stage of the crypto ETF market.