Goldman Sachs is making a big move into bitcoin and crypto markets
- Goldman Sachs plans to take advantage of FTX crash by bailing out several other firms from bankruptcy.
- Other investment banks are also looking to take advantage of this.
Goldman Sachs is set to bet big on the cryptocurrency market by pumping money into crypto firms adversely affected by the recent FTX crash. The big investment bank sees the implosion as an opportunity to take a piece of the industry while saving several other firms from bankruptcy.
Although Goldman Sachs has not officially confirmed its intention, one manager is suggested to Reuters in a recent interview that Goldman Sachs is not the only bank with this plan. The investment bank’s head of digital assets, Matthew McDermott, told Reuters that major banks see the FTX crash as an opportunity to present a more reliable and regulated front in the crypto industry. The executive also mentioned that Goldman Sachs is already doing due diligence on several crypto firms to determine which are eligible.
Formerly the second largest crypto exchange after Binance, FTX filed for Chapter 11 bankruptcy after it collapsed and confirmed it may owe more than a million customers. Shortly after taking over from Sam Bankman-Fried, new CEO John Ray, who has extensive experience in liquidations, including the collapse of energy giant Enron in 2001, revealed a financial rot in FTX’s operations. He summed it up by saying:
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial information as occurred here.”
Goldman Sachs remains interested in crypto despite industry woes
Goldman Sachs remains interested in making progress in the crypto market regardless of the FTX crash and the prolonged bear market. Since the collapse, the general market mood has been particularly sour, especially from players in the traditional market. However, big names such as Goldman Sachs see the situation as an opportunity for growth as they still trust the sector and its technology. According to McDermott:
“It’s definitely set the market back in terms of sentiment, there’s absolutely no doubt about that. FTX was a poster child in many parts of the ecosystem. But to reiterate, the underlying technology continues to work.”
Data service for institutional actors
The investment bank’s venture into the crypto industry extends beyond rescuing unhealthy crypto firms in the wake of FTX’s collapse. Goldman Sachs has launched a data service for the correct classification of digital assets, making it easy for institutional investors to understand and buy into the sector.
According to an official press release published last month, Goldman Sachs launched Datonomy in partnership with crypto data publisher Coin Metrics and index provider MSCI. Datonomy – a play on ‘Taxonomy’, the branch of science that deals with naming and classification – is available via subscription, and will categorize digital assets based on usage. Dataonomy’s grouping will include sectors and sub-sectors.
Users who subscribe to the service can also use provided data for research, analysis, portfolio management and product development. Furthermore, the service will allow subscribers to track trends across various sectors of the crypto industry.
