Investment banking giant Goldman Sachs is ready to invest billions of dollars in crypto companies overcoming the FTX contagion.
GS plans to buy or invest in companies that have lost investor interest and whose valuations have fallen, Reuters reports.
Mathew McDermott, head of digital assets at Goldman Sachs, told Reuters that the FTX collapse has increased the need for trusted, regulated cryptocurrency companies and that major banks see an opportunity to take over the business. GS is looking at several companies, though no further details were disclosed.
On Nov. 11, crypto exchange FTX filed for Chapter 11 bankruptcy in the U.S., causing a ripple effect in the market. The last company to follow FTX was crypto lender BlockFi, which filed for bankruptcy on Nov. 29.
Related: Crypto Digest From TradeCrypto.com #179
Binance CEO Changpeng Zhao told Bloomberg that while it’s unclear whether more companies will go bankrupt, the contagion from FTX is cascading, meaning that the overall market reaction gets smaller with each subsequent company.
To promote the improvement of the market, Binance announced the establishment of a $1 billion fund for the recovery of the industry.
The mandate of this new effort is to support the most promising and highest quality companies and projects built by the best technologists and entrepreneurs that, through no fault of their own, are facing significant, short term, financial difficulties. What makes this initiative unique is the collaborative approach to restoring confidence in Web3.
Related: Binance may buy FTX assets
Mathew McDermott responded to the growing fear of the crypto market’s demise:
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.
GS will raise tens of billions to support the affected companies. Although the amount Goldman could invest is small for the Wall Street giant, which earned $21.6 billion last year, its willingness to continue investing amid the sector’s shakeup shows it senses a long-term opportunity.
Crypto Ping Pong Digest
Trash style news. You will definitely like