Goldman Sachs investment in Crypto

Key points: 

• Goldman Sachs is looking for buying or investing in crypto firms as the company is still struggling to gain a foothold in the space.
• The breakup of FTX has driven demand for more trusted and regulated cryptocurrency players.
• Big banks saw an opportunity to boost their business. 
• Goldman Sachs is conducting due diligence on many different crypto companies.
• Goldman Sachs has invested in 11 digital asset companies, providing services ranging from compliance and encrypted data to blockchain management. 

Over the years, the cryptocurrency market has gone through several turbulent periods. However, the current one appears to be the stormiest yet. Like dominoes, companies fall one by one. In the wake of the FTX incident, Goldman Sachs is reportedly looking to spend "tens of millions of dollars" buying or investing in crypto firms as the company is still struggling to gain a foothold in the space.

Mathew McDermott, head of digital assets at Goldman Sachs, told Reuters that the breakup of FTX has driven demand for more trusted and regulated cryptocurrency players. He added that big banks saw an opportunity to boost their business. The executive did not disclose specific details but revealed that Goldman Sachs is conducting due diligence on many different crypto companies.

Additionally, McDermott said in an interview last month that the company sees "some really interesting opportunities at a much more reasonable price."

FTX Aftermath: A Blessing for Goldman Sachs?

Goldman Sachs has invested in 11 digital asset companies, providing services ranging from compliance and encrypted data to blockchain management. The company has also launched Datanomy, a data service using MSCI and Coin Metrics to classify digital assets according to their use.

Speaking about the current mood swings, McDermott 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.”

The executive further emphasized that the FTX debacle boosted Goldman’s trading volume. More importantly, investors want to trade with regulated and well-capitalized counterparties. he added,

“What’s increased is the number of financial institutions wanting to trade with us. I suspect a number of them traded with FTX, but I can’t say that with cast iron certainty.”

Meanwhile, Goldman Sachs sees hiring opportunities as cryptocurrency and tech companies lay off staff, although the bank is currently comfortable with the size of its team, McDermott said.