After the FTX Fiasco, What Does Goldman Sachs Think about the Crypto Market?
After the FTX Fiasco, What Does Goldman Sachs Think about the Crypto Market? Goldman Sachs reportedly plans to spend “tens of millions of dollars” buying or investing in crypto businesses after FTX. Mathew McDermott, head of digital assets, told Reuters, “We see some very good opportunities. Fund giant Goldman Sachs plans to spend “tens of billions of dollars” to buy or invest in crypto companies whose prices have fallen due to the collapse of the FTX crypto exchange.
The bank is active in several different crypto companies, according to a Reuters report. “We’re seeing some real value-added opportunities,” said Mathew McDermott, head of digital assets at Goldman Sachs.
Goldman Sachs is currently an investor in several crypto companies, including CertiK, TRM Labs, Elwood Technologies, and Metrics Coin. Last year, investment banks brought back cryptocurrency trading tables despite interest from corporate clients.
More than 70 people currently work for Goldman’s digital assets team, and the bank is developing its own distributed ledger technology, according to McDermott. Goldman sees opportunity in FTX’s problems. McDermott said that the implosion of the crypto exchange “got the market back on track,” because “FTX is a poster child in many parts of the ecosystem.” Nevertheless, McDermott believes that “the underlying technology continues to work.”
FTX filed for Chapter 11 protection on November 2. 11 following the financial crisis. The crypto exchange was accused of using client funds to pay off risky bets through its trading firm, Alameda Research, to set up its demise.
The failure of FTX boosted trading volume for Goldman Sachs as investors sought to tap into organized and high-income players. “What has increased is the number of financial institutions that want to do business with us,” McDermott said. “I think most of them trade on FTX, but I can’t say that for sure.”
