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• The FTX crash has increasingly unsettled crypto investors
• Goldman Sachs sees the crisis as an opportunity
• Investors looking for trusted business partners
Goldman Sachs has apparently decided to invest a lot of money in the struggling crypto sector. According to Reuters, the banking giant wants to spend tens of millions of dollars buying or investing in crypto companies.
The crypto crisis as an opportunity
This news comes shortly after the crypto industry had to digest another shock: the bankruptcy of the second largest crypto exchange FTX. The events surrounding the collapse of the stock exchange and associated trading house Alameda have sent shockwaves through the market in recent weeks and have many investors so unsettled that they have pulled capital out of cryptocurrencies on a large scale. and crypto companies. This has significantly reduced the valuations of many crypto companies – a fact that Goldman Sachs now appears to be taking advantage of.
The FTX implosion has increased the need for more trusted and regulated cryptocurrency players, and big banks see an opportunity to boost their businesses, Reuters said, citing Mathew McDermott, head of digital assets at Goldman Sachs. “We see some really good opportunities at a much more reasonable price.”
In this context, McDermott does not lose sight of the crypto companies that the gold men have in mind, but the selection in the market should be vast, as the FTX implosion has brought down many other crypto companies and even caused other victims. Just days after the crypto exchange went bankrupt, crypto lender BlockFi also had to file for bankruptcy.
Fundamental concerns about the sector remain
The FTX drama is just the latest in a series of incidents that have dampened the investment mood of crypto investors in 2022 and given digital currencies a crypto winter. The collapse of the Terra/LUNA cosmos in the spring shocked investors earlier this year. The bankruptcy of crypto lending service Celsius and the failed rescue attempt of crypto exchange Voyager Digital were followed by the bankruptcy of FTX, which dragged other companies in the sector into the abyss with BlockFi and BITFRONT.
McDermott explained to Reuters that Goldman Sachs wants to pour money into the crypto sector despite ongoing bad news with fundamental confidence in the blockchain: Although recent events have “definitely set the market back in terms of mood, there’s absolutely no doubt about that.” the banker. “FTX has been a standout in many parts of the ecosystem. But to reiterate, the underlying technology continues to work.”
His company saw an increase in trading volume following the bankruptcy of FTX. He points out that investors are looking for counterparties that are regulated and well capitalized. It’s especially institutional investors who want to invest their money in Goldman: “What has increased is the number of financial institutions that want to trade with us,” McDermott said. “I suspect some of them were traded to FTX, but I can’t say with absolute certainty.”
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