Goldman Sachs Plans to Invest in Discounted Crypto Investments

While some firms are wallowing in regrets following the implosion of the FTX Derivatives Exchange, many others perceive the liquidity crunch as a blessing in disguise. Global investment bank Goldman Sachs is looking at purchasing many crypto investments which have suddenly become discounted due to the FTX contagion. 

According to the Chief Executive Officer (CEO) of Goldman Sachs David Solomon, he views digital assets as being highly speculative however, he believes that there is potential in the underlying nascent industry. Solomon says the infrastructure is becoming more formalized.

The New York-headquartered bank plans to spend tens of millions in either buying out or investing in such enterprises. Notably, this comes on a platter of gold for Goldman Sachs as this is a crucial time when the cryptocurrency industry is seeking more regulated industry players who are trustworthy. 

FTX Set Crypto Industry in Disarray

FTX, one of the top crypto exchanges in the history of digital assets, hit rock bottom last month after its sister trading firm Alameda Research became caught up in some form of financial complexities.

This led to the resignation of Sam Bankman-Fried as Chief Executive Officer (CEO) of FTX. Immediately, the firm and its associates filed for Chapter 11 bankruptcy in the United States. 

Apart from the pressure from its bankruptcy proceedings, other crypto firms like BlockFi which has been exposed to FTX also suffered the same fate.

Investors including Temasek announced that it has decided to write down its $275 million investment in the troubled crypto exchange, however, some others are still trying to find their footing.

Speaking about the FTX implosion, Mathew McDermott, Goldman’s head of digital assets said “It’s definitely set the market back in terms of sentiment, there’s absolutely no doubt of that. FTX was a poster child in many parts of the ecosystem. But to reiterate, the underlying technology continues to perform.”

At present, Goldman Sachs is in the middle of conducting corporate due diligence on the investments it is interested in.

Previously, McDermott had stated that the company “do see some really interesting opportunities, priced much more sensibly.” While the amount which Goldman Sachs plans to invest may not be large in comparison to its entire worth, it says it is just testing the waters with these investments.