Goldman Sachs sees opportunities for crypto investment after the FTX crash

    06 Dec 2022

    Investment bank Goldman Sachs plans to spend “tens of millions of dollars” to buy or invest in crypto firms whose valuations declined after the collapse of crypto exchange FTX, Reuters reported. “We do see some really interesting opportunities, priced much more sensibly,” said the bank’s digital asset head Mathew McDermott.

    According to a Reuters report, Goldman Sachs is doing due diligence on several different crypto firms.

    “We do see some really interesting opportunities, priced much more sensibly,” Mathew McDermott, Goldman Sachs’ head of digital assets, told Reuters.

    Currently, the financial giant is an investor in several crypto firms, including CertiK, Elwood Technologies, TRM Labs, and Coin Metrics. Earlier this year, Goldman Sachs re-established a cryptocurrency trading desk, citing increased interest from institutional clients. According to McDermott, over 70 employees are now working for the investment bank’s digital assets team as Goldman is building its own private blockchain technology.

    As per McDermott, Goldman Sachs sees an opportunity in FTX’s demise. He said the crypto exchange’s collapse “definitely set the market back in terms of sentiment,” as “FTX was a poster child in many parts of the ecosystem.” Meanwhile, McDermott believes “the underlying technology continues to perform.”

    Following the FTX implosion, Goldman Sachs increased its trading volumes while investors sought to flock to regulated and well-capitalized players.

    “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,” McDermott suggested.

    Earlier, crypto exchange FTX filed for Chapter 11 bankruptcy protection due to a liquidity crunch last month. FTX reportedly tapped customer assets to fund risky bets by its affiliated trading firm, Alameda Research, and committed many more illicit moves, setting up its collapse.

    As a result of the FTX debacle, crypto investment products experienced their biggest outflows in three months, a new CoinShares report revealed.

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