Goldman Sachs’ global head of digital assets stated that institutional demand for cryptocurrencies is increasing and that the firm has been “actively widening” its market capabilities to meet that need.
Goldman Sachs and Barclays have joined a $70 million(R1.1B) Series A investment round for Elwood Technologies, the institutional crypto trading platform founded by billionaire British hedge fund manager Alan Howard.
According to the Financial Times, the round was joined by crypto-friendly German bank Commerzbank, crypto investment manager Galaxy Digital, and Dawn Capital. According to the reports, the company was valued at roughly $500 million(R8.1B) during the fundraising round.
Despite the recent drop in cryptocurrency markets, Elwood believes traditional financial institutions such as hedge funds and banks will continue to be interested in investing in cryptocurrencies. Elwood’s investment round was already agreed to and in the works prior to the latest price dip, which has seen nearly 15% of the global crypto market cap wiped out since May 9, according to CoinMarketCap.
Elwood Technologies CEO Alan Howard called the financing “another validation of the longevity of crypto,” dismissing recent price declines:
“We’re getting investments from financial institutions that don’t expect massive returns in 15 minutes.” They’re investing in infrastructure, that I think is a reassuring message.”
Elwood Technologies offers a crypto portfolio management system for institutional investors that includes crypto market information and trading infrastructure, as well as an interface that interfaces to crypto exchanges, liquidity providers, and custodians.
Goldman Sachs’ global head of digital assets Mathew McDermott commented on the transaction, saying that the investment demonstrated the firm’s “continuing commitment” to cryptocurrencies, adding:
“As institutional demand for cryptocurrency rises, we are actively broadening our market presence and capabilities to meet client demand.”
Goldman Sachs’ investment represents the bank’s foray into crypto assets. In early May, the investment bank was the first to offer a loan secured by Bitcoin (BTC) to cryptocurrency exchange Coinbase. It has long been interested in the field, referring to digital assets and the Metaverse as “megatrends” in March.
Another instance of the Wall Street giant courting crypto startups involved a meeting between Goldman CEO David Solomon and FTX CEO Sam Bankman-Fried, which featured Solomon’s offer to assist FTX with future investment rounds and regulatory compliance.
Elwood Technologies will continue to be majority-owned by Alan Howard, who was the primary investor prior to the Series A financing. In September 2021, Howard co-founded the hedge fund Brevan Howard, which started its crypto investing section BH Digital.