Beautiful Virgin Islands

Tuesday, Mar 28, 2023

Goldman Sachs on hunt for bargain crypto firms after FTX fiasco

Goldman Sachs on hunt for bargain crypto firms after FTX fiasco

Goldman Sachs plans to spend tens of millions of dollars to buy or invest in crypto companies after the collapse of the FTX exchange hit valuations and dampened investor interest.
Goldman Sachs (GS.N) plans to spend tens of millions of dollars to buy or invest in crypto companies after the collapse of the FTX exchange hit valuations and dampened investor interest.

FTX's implosion has heightened the need for more trustworthy, regulated cryptocurrency players, and big banks see an opportunity to pick up business, Mathew McDermott, Goldman's head of digital assets, told Reuters.

Goldman is doing due diligence on a number of different crypto firms, he added, without giving details.

"We do see some really interesting opportunities, priced much more sensibly," McDermott said in an interview last month.

FTX filed for Chapter 11 bankruptcy protection in the United States on Nov. 11 after its dramatic collapse, sparking fears of contagion and amplifying calls for more crypto regulation.

"It's definitely set the market back in terms of sentiment, there's absolutely no doubt of that," McDermott said. "FTX was a poster child in many parts of the ecosystem. But to reiterate, the underlying technology continues to perform."

While the amount Goldman may potentially invest is not large for the Wall Street giant, which earned $21.6 billion last year, its willingness to keep investing amid the sector shakeout shows it senses a long term opportunity.

Its CEO David Solomon told CNBC on Nov. 10, as the FTX drama was unfolding, that while he views cryptocurrencies as "highly speculative", he sees much potential in the underlying technology as its infrastructure becomes more formalized.

Rivals are more sceptical.

"I don't think it's a fad or going away, but I can't put an intrinsic value on it," Morgan Stanley (MS.N) CEO James Gorman said at the Reuters NEXT conference on Dec. 1.

HSBC (HSBA.L) CEO Noel Quinn, meanwhile, told a banking conference in London last week he has no plans to expand into crypto trading or investing for retail customers.

Goldman has invested in 11 digital asset companies that provide services such as compliance, cryptocurrency data and blockchain management.

McDermott, who competes in triathlons in his spare time, joined Goldman in 2005 and rose to run its digital assets business after serving as head of cross asset financing.

His team has grown to more than 70 people, including a seven-strong crypto options and derivatives trading desk.

Goldman Sachs has also together with MSCI and Coin Metrics launched data service datonomy, aimed at classifying digital assets based on how they are used.

The firm is also building its own private distributed ledger technology, McDermott said.

'TRUSTED' PLAYERS
The global cryptocurrency market peaked at $2.9 trillion in late 2021, according to data site CoinMarketCap, but has shed about $2 trillion this year as central banks tightened credit and a string of high-profile corporate failures hit. It last stood at $865 billion on Dec. 5.

The ripple effects from FTX's collapse have boosted Goldman's trading volumes, McDermott said, as investors sought to trade with regulated and well capitalized counterparties.

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

Goldman also sees recruitment opportunities as crypto and tech companies shed staff, McDermott said, although the bank is happy with the size of its team for now.

Others also see the crypto meltdown as a chance to build their businesses.

Britannia Financial Group is building its cryptocurrency-related services, its chief executive Mark Bruce told Reuters.

The London-based company aims to serve customers who are eager to diversify into digital currencies, but who have never done so before, Bruce said. It will also cater to investors who are very familiar with the assets, but have become nervous about storing funds at crypto exchanges since FTX's collapse.

Britannia is applying for more licenses to provide crypto services, such as doing deals for wealthy individuals, he said

"We have seen more client interest since the demise of FTX," he said. "Customers have lost trust in some of the younger businesses in the sector that purely do crypto, and are looking for more trusted counterparties."
Newsletter

Related Articles

Beautiful Virgin Islands
Close
0:00
0:00
AOC explains why she opposes banning TikTok
I have a dream, MLK inspiring speech
UK: Humza Yousaf replaces Nicola Sturgeon as SNP leader and first minister in Scotland
Aretha Franklin, Marvis Staples - Oh Happy Day
In a dramatic U-turn against His Government: Judicial Reform Legislation Must Be Halted, Says Israeli Defense Minister Yoav Gallant
BVI Freedom Song
Gordon Moore, a co-founder of Intel Corporation, died at 94
Billy Preston - You Can't Beat God Giving (Live)
Powell: Silicon Valley Bank was an 'outlier'
VIRGIN ISLANDS REGGAE CARIBBEAN RIDDIMZ
Donald Trump arrested – Twitter goes wild with doctored pictures
Oh Happy Day Edwin Hawkins - Anthony Brown w FBCG Combined Choir
NYPD is setting up barricades outside Manhattan Criminal Court ahead of Trump arrest.
'Stand by Me' performed by Karen Gibson and The Kingdom Choir
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
National Anthem of the British Virgin Islands - Oh, Beautiful Virgin
Home Secretary Suella Braverman tours potential migrant housing in Rwanda as asylum deal remains mired in legal challenges
Hello Dolly
Paris Rioting vs Macron anti democratic law
for KING & COUNTRY - Amen (Reborn) [feat. Lecrae & The WRLDFMS Tony Wi
'Sexual Fantasy' Assignment At US School Outrages Parents
Bob Marley - Get Up Stand Up
Credit Suisse to borrow $54 billion from Swiss central bank
Yes He Can
Russian Hackers Preparing New Cyber Assault Against Ukraine
What A Friend We Have In Jesus
Jeremy Hunt insists his Budget will get young parents and over-50s back into work
Unforgettable
If this was in Tehran, Moscow or Hong Kong
Touch The Hem Of His Garment
Nashville police officer, and a female driver shooting one another
The Lord's Prayer
TRUMP: "Standing before you today, I am the only candidate who can make this promise: I will prevent World War III."
THE GOD MOVEMENT...BEAUTIFUL BVI
Mexican President Claims Mexico is Safer than the U.S.
Siyahamba
A brief banking situation report
Ray Charles And The Voices Of Jubilaton, Oh, Happy Day
Lady bites police officer and gets instantly reaction
Ramblin' Rose
We are witnessing widespread bank fails and the president just gave a 5 min speech then walked off camera.
Protoje - Who Knows ft. Chronixx
Donald Trump's asked by Tucker Carlson question on if the U.S. should support regime change in Russia?.
Pressure - Virgin Islands Nice
Good news: The U.S. government is now guaranteeing all deposits, held by, Silicon Valley Bank, and the funds are available as of today
Phil Wickham - House Of The Lord
Silicon Valley Bank exec was Lehman Brothers CFO
My God Is Real (Yes, God Is Real)
In a potential last-ditch effort, HSBC is considering a rescue deal to save Silicon Valley Bank UK from insolvency
The Lion King Circle of Life by LEBO M. — LIVE at the HAVASI Symphonic
BBC Director General, Tim Davie, has apologized, but not resigned, yet, following the disruption of sports programmes over the weekend
Louis Armstrong - When The Saints Go Marching In
A Mississippian man, who was once considered a “ticking time bomb,” has lost a whopping 165 kilograms! What motivated this incredible transformation?
Kanye West Sunday Service - hallelujah, salvation, and glory
Elon Musk Is Planning To Build A Town In Texas For His Employees
Jonathan Nelson - I Believe (Island Medley
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
From The Virgin Islands Sqad Up
City officials in Berlin announced on Thursday that all swimmers at public pools will soon be allowed to swim topless
Common, John Legend - Glory
Fitness scam
Anthony Evans vs. Jesse Campbell - If I Ain't Got You
Market Chaos as USDC Loses Peg to USD after $3.3 Billion Reserves Held by Silicon Valley Bank Closed.
I have a dream, MLK inspiring speech
A primitive judge in Australia sparked outrage when he told a breastfeeding woman to leave his courtroom for being “a distraction"
Aretha Franklin, Marvis Staples - Oh Happy Day
Barcelona is feeling the heat as they face corruption charges over payments to former vice-president of Spain's referees' committee, Jose Maria Enriquez Negreira
BVI Freedom Song
Senator Tom Cotton: If the Mexican Government Won’t Stop Cartels from Killing Americans, Then U.S. Government Should
Billy Preston - You Can't Beat God Giving (Live)
Banking regulators close SVB, the largest bank failure since the financial crisis
VIRGIN ISLANDS REGGAE CARIBBEAN RIDDIMZ
The unelected UK Prime Minister Rishi Sunak, an immigrant himself, defends new controversial crackdown on illegal migration
Oh Happy Day Edwin Hawkins - Anthony Brown w FBCG Combined Choir
Old clip of Bill Gates saying Ukraine is a big, fat, corrupt sinkhole is going viral
'Stand by Me' performed by Karen Gibson and The Kingdom Choir
Man’s penis amputated by mistake after he’s wrongly diagnosed with a tumour
National Anthem of the British Virgin Islands - Oh, Beautiful Virgin
In a major snub to Downing Street's Silicon Valley dreams, UK chip giant Arm has dealt a serious blow to the government's economic strategy by opting for a US listing
Hello Dolly
JP Morgan Becomes First Bank to Predict UK Will Avoid Recession
for KING & COUNTRY - Amen (Reborn) [feat. Lecrae & The WRLDFMS Tony Wi
JP Morgan Becomes First Bank to Predict UK Will Avoid Recession
Bob Marley - Get Up Stand Up
How do stolen goods end up on Amazon, eBay and Facebook Marketplace?
Yes He Can
It's the question on everyone's lips: could a four-day workweek be the future of employment?
What A Friend We Have In Jesus
Is Gold the Ultimate Safe Haven Asset in Times of Uncertainty?
Unforgettable
×