Following the collapse of FTX that has negatively impacted the crypto industry, leading global investment firm Goldman Sachs is set to capitalize on the recent upheaval by acquiring affected crypto firms.
The collapse of FTX reportedly led to the drop in the valuation of some crypto companies as Goldman Sachs is currently watching closely to invest millions or purchase some of these firms as their prices have declined.
In a recent interview, Goldman Sach’s head of digital assets Matthew MC Dermott disclosed that the FTX debacle intensified the need for regulation within the crypto industry, noting that big banks are currently seeing opportunities in the space.
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He added that his firm is doing the due diligence of observing the industry closely as it has spotted some interesting opportunities, in which it seeks to invest or purchase some of the affected crypto firms.
In his words, “We do see some really interesting opportunities, priced much more sensibly. FTX collapse 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.”
He further disclosed that the ripple effects from FTX’s collapse have boosted Goldman’s trading volumes, 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, I suspect a number of them traded with FTX, but I can’t say that with cast iron certainty,” he said.
Also, Goldman Sachs CEO David Solomon disclosed that as the FTX drama unfolds, while he views cryptocurrencies as highly speculative, he sees much potential in the underlying technology as its infrastructure develops.
It is often said that crisis creates opportunity, and Goldman Sachs is one firm that is doing due diligence by being on the lookout for opportunities in the recent FTX collapse which it claims to have spotted.
So far, the investment firm has invested in 11 digital asset companies and is also developing its private distributed ledger technology.
On the other hand, the FTX collapse has had a serious effect on some companies who are currently bearing the brunt of the upheaval that has so far affected their valuations.
A case study of African fintech giant Chipper cash which saw its valuation drop from $2 billion to $1.25 billion. Reports reveal that FTX financed more than a quarter of Chipper’s cash extension round at $40 million.
Few analysts are skeptical that the fintech firm will maintain its current valuation in the next priced round seeing that its lead investor FTX is currently bankrupt.
In the broader crypto market, the collapse of FTX has fueled big volatility in the price of crypto assets.
Bitcoin has fallen to an all-time low, currently trading at $16,929, with other major cryptocurrencies falling sharply, as the impact of the dramatic collapse of FTX continues to ripple through the market.
Also, a report by cryptocurrency data aggregator Coingecko, reveals that FTX’s native utility token FTT, has since collapsed alongside the centralized cryptocurrency exchange, as it plunged by 90%, wiping out over $2.6 billion.
The crypto market has no doubt come under pressure as investors are unclear how the FTX saga will end, with the fear of a possible contagion across the industry.