Goldman Sachs, the investment banking company is planning to invest about ‘tens of millions’ in crypto companies. This is because the investment banking company is looking at a need for trustworthy players in the industry. Therefore, they are taking advantage of the crypto collapse.
The Wall Street banks have largely been avoiding the process of investing directly in cryptocurrencies. There are industry wide developments going on in the process of integrating blockchain, in several trading and business processes. Since blockchain has several use cases like smart contracts, it is not surprising to see blockchain in businesses. However, direct usage of cryptocurrency is questionable.
It is expected that blockchain based systems which will be used in the Wall Street would be different than those used for Bitcoin and other kinds of cryptocurrencies. They are likely to be permissioned networks, where the banks or consortium of banks will decide who is allowed on.
Tom Farley, the former president of the New York Stock Exchange stated, “Blockchain technology is going to rewire all financial services,”
Mathew McDermott, Head of Digital Assets for Goldman Sachs, global markets division previously was skeptic of blockchain; however, that is not the case anymore.
McDermott has a team that has grown to more than 70 people, which consists of seven-strong crypto options and derivatives trading desk.
Noteworthy, Goldman Sachs are also building their own private distributed ledger technology. The Ripple effect of FTX collapse boosted Goldman Sachs trading volumes. Eventually, this has increased the number of financial institutions looking to trade with Goldman Sachs.
The crypto meltdown is looked at as an excellent opportunity for Goldman Sachs. The target customers are those who are willing to diversify their investment in digital assets.
There is a commercial driver in every situation. The collapse of FTX according to Goldman Sachs has hurt investor interest and valuations. The implosion of FTX has highlighted the requirements of more trustworthy and regulated cryptocurrency players.
McDermott commenting on the situation stated that big banks are seeing opportunity to pick up this business. He further stated that Goldman Sachs are doing due diligence on several different crypto firms. Goldman Sachs are looking at some interesting opportunities priced sensibly.
While the FTX collapse has confused the sentiments of cryptocurrency investors, the underlying technology continues to perform.
Goldman Sachs have previously invested in 11 digital asset companies, which provide services like compliance, cryptocurrency data and blockchain management.
A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5
Get the latest Crypto & Blockchain News in your inbox.
