Goldman Sachs Searching for Favorable Crypto Companies After FTX Fiasco

Goldman Sachs has announced plans to spend tens of millions of dollars to acquire or invest in crypto companies after the collapse of FTX impacted valuations and weakened investor interest. The implosion of FTX has increased the need for more reliable, regulated players in the cryptocurrency space, and large banks see this as their opportunity, said Mathew McDermott, Goldman’s head of digital assets, to Reuters.

Goldman is conducting a deep analysis of a range of different crypto companies, he added, without providing details.

– We see some really interesting opportunities, with much more reasonable pricing than a year or two ago – said McDermott.

Recall that FTX filed for bankruptcy protection under Chapter 11 in the United States on November 11 after a dramatic collapse, which triggered fears of ‘contagion’ and intensified calls for greater regulation of cryptocurrencies.

McDermott believes that the collapse of FTX has hindered the market, but that the underlying technology continues to function.

By the way, Goldman earned $21.6 billion last year, so the amount of several million they plan to invest in a sector that has faced significant upheaval recently does not represent a large stake for this investment bank, but it shows that Goldman is counting on a long-term opportunity.

David Solomon, CEO (and DJ) of Goldman, during the FTX drama stated that he still considers cryptocurrencies to be highly speculative, but nonetheless sees great potential in them due to the underlying technology.

Competitors More Skeptical

James Gorman, CEO of Morgan Stanley, is not as optimistic about the crypto market, stating that he does not believe it is a fad or that crypto will disappear, but he still cannot assign it ‘real or tangible value’.

HSBC CEO Noel Quinn recently said at a banking conference in London that they have no intention of expanding into the crypto market.

Although Goldman’s competitors are still not looking towards crypto, they may change their tune. Goldman has so far invested in 11 digital asset companies that provide services such as compliance, cryptocurrency data, and blockchain management, and the company, as McDermott says, is already working on its own blockchain technology.

The effects of the FTX collapse have increased Goldman’s trading volumes, McDermott said, as investors sought to trade with regulated and well-capitalized parties.

– Buyers have lost confidence in some of the younger companies in the sector that deal exclusively with crypto and are looking for more reliable partners – concluded McDermott.