Goldman Sachs to spend tens of millions on devalued crypto firms, details inside

  • AMBCrypto
  • Cryptocurrency News
Goldman Sachs to spend tens of millions on devalued crypto firms, details inside

Global investment bank Goldman Sachs (NYSE: GS ) plans to spend tens of millions of dollars on those crypto firms whose valuations were slashed following the collapse of crypto exchange FTX, as per a Reuters report.

Matthew McDermott, the head of digital assets in Goldman Sachs, confirmed that the bank was doing due diligence on several crypto firms. He added that the bank was also building its private distributed ledger technology (DLT). McDermott noted,

“We do see some really interesting opportunities, priced much more sensibly.”

McDermott did not hold back when it came to discussing FTX’s fallout, as he said,

“It’s definitely set the market back in terms of sentiment, there’s absolutely no doubt of that. FTX was a poster child in many parts of the ecosystem. But to reiterate, the underlying technology continues to perform.”

Goldman Sachs is a major crypto player Goldman Sachs has a stake in prominent crypto companies such as CertiK, TRM Labs, Elwood Technologies, and Coin Metrics. After increased interest from institutional clients, the investment bank re-established a cryptocurrency trading desk earlier this year.

FTX filed for Chapter 11 bankruptcy protection on 11 November following a liquidity crisis. The crypto exchange allegedly used customer funds to fund risky bets through its affiliated trading firm, Alameda Research.

The fallout was felt across firms, with crypto lender BlockFi being the latest to declare bankruptcy last month. FTX’s failure spurred Goldman Sachs’ trading volume as investors sought regulated and well-capitalized players.

Well, the global cryptocurrency market peaked at $2.9 trillion in late 2021 but has lost nearly $2 trillion this year due to a slew of high-profile corporate failures. At the time of writing, the global crypto market cap sat at $850 billion.

Goldman Sachs’ CEO, David Solomon, told CNBC that even though the central bank viewed cryptocurrencies as “highly speculative,” the underlying technology will have a lot of potential with a more formal infrastructure.

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