Goldman Sachs buys into Bitcoin with $2.25B NEOS deal

Covered-call funds work like a landlord renting out a place they already own. NEOS's fund holds Bitcoin. Then it sells someone else the right to buy that Bitcoin later, at a set price. Either way, it collects a fee. That's how it pays such a large yield. Goldman didn't build anything like this in-house — it's simply buying the machine that already prints the yield.

That 27% yield is real, but it isn't free money. Covered-call funds cap the upside. If Bitcoin rockets higher, NEOS shareholders miss most of the gain, trading potential gains for high cash payouts today. The deal's price could also land below the full $2.25 billion. Part of it depends on the acquired business hitting performance targets.

Keep reading — what to watch

Does this make Goldman a crypto bank, or just an ETF shop with one crypto product? The bank has mostly served institutional crypto clients, avoiding retail-facing products like this one. Competitors will watch whether Goldman expands the lineup with more crypto income funds, or whether this stays a one-off. A response from BlackRock or Fidelity could turn this into a real fight over crypto's yield business.