Goldman Sachs is reportedly ready with tens of millions, looking to buy into crypto companies at fire sale prices, where is the opportunity?

The bankruptcy of FTX has caused a sharp drop in the valuation of many cryptocurrency companies. According to Reuters, Goldman Sachs is considering investing tens of millions of dollars to purchase or invest in cryptocurrency companies during the fire sale.

FTX Closure Boosts Trading Volume for Goldman Sachs

Mathew McDermott, head of digital assets at Goldman Sachs, told Reuters that the bankruptcy of FTX has made everyone realize that the crypto market needs more reliable and regulated participants, leading major banks to see an opportunity to enter the market.

He stated:

FTX is a representative in the crypto ecosystem. Emotionally, the collapse of FTX will definitely cause the market to shrink, that is for sure. But the underlying technology continues to develop.

Interestingly, Mathew McDermott revealed that Goldman Sachs actually increased its trading volume after FTX's collapse, as he believes investors are starting to seek regulated and well-capitalized counterparts.

Goldman Sachs is well-known for its wide range of services, including bonds, stocks, lending, and fixed income. However, its services can be broadly categorized into four types: investment banking, institutional client services, investing and lending, and investment management.

It's no secret that Goldman Sachs, which is actively expanding its business, wants to enter the crypto market.

It was previously reported that Goldman Sachs and a data company launched a digital asset classification system called Datonomy, followed by the introduction of bitcoin futures trading, bitcoin futures, and even rumors of Goldman Sachs intending to operate a stablecoin business.

Goldman Sachs is not the only one interested in crypto business, as the UK investment firm Britannia Financial Group also hopes to offer digital currency services to high-net-worth clients.

Adults Are Entering the Market, Children Beware

Since the beginning of this year, both DeFi and CeFi have been experiencing continuous failures, including LUNA, 3AC, Celsius, and most recently FTX. Besides affecting investor confidence, these incidents have also strengthened the determination of regulatory authorities to bring cryptocurrencies under regulation.

The Financial Stability Board (FSB), composed of representatives from numerous countries, released the discussions of this month's meeting on the 6th. (source).

The committee pointed out that while businesses that are traditionally isolated in traditional finance are mixed together on cryptocurrency trading platforms, this leads to concentration of risks, conflicts of interest, and potential misuse of user assets. Therefore, a global regulatory framework will be developed in the future.

Cryptocurrencies have grown wildly for many years, and part of the past boom can be attributed to regulatory arbitrage.

Once regulations begin to be strictly enforced, the players currently in the market will have to face new rules of the game, and coincidentally, these banks happen to be the experienced players familiar with the rules.

We may see a very different ecosystem in the coming years.