By
Godfrey Benjamin
May 13th, 2024
Goldman Sachs’ digital asset head Matthew McDermott noted that the company is expanding its presence in tune with the rise in institutional demand for crypto.
Investment banking company Goldman Sachs (NYSE: GS) and British multinational universal bank Barclays (NYSE: BCS) recently backed a $70 million funding round for crypto trading platform Elwood Technologies. The two top Wall Street players invested in the crypto company amid the crash across major cryptocurrencies. The crypto market is in a mess, and investors have lost huge parts of their money. Despite the high volatility, Goldman Sachs and Barclays remain confident in the future of digital assets.
Goldman and Barclays Invest in Elwood
In addition to Goldman and Barclays, other supporters of the Elwood funding round include Dawn Capital and the VC arms of Commerzbank AG and Galaxy Digital. As a result of the fresh funds, Elwood Technologies is now valued at more than $500 million. The financing also represents the first external funding for Elwood since its inception in 2020. When hedge fund billionaire Alan Howard founded the crypto company, the plan was for the management of his personal wealth of digital assets. However, the company has grown to offer various services, including the provision of asset management software. Elwood’s clients include banks, crypto exchanges, fintech, and hedge funds.
According to Elwood CEO James Strickland, the funding from the likes of Goldman and Barclays is “another validation of the longevity of crypto.”
“We’re getting investment from financial institutions that aren’t expecting to get massive returns in 15 minutes. I think it’s a reassurance message,” said he.
Meanwhile, Goldman Sachs’ digital asset head Matthew McDermott noted that the company is expanding its presence in tune with the rise in institutional demand for crypto. McDermott said Goldman is also broadening its capabilities to cater to its clients’ needs. According to him, investing in Elwood shows the bank’s “continued investment” in crypto.
Generally, cryptos are considered risk-sensitive and speculative, and the market has been highly volatile in the past weeks. Since April began, the crypto total market valuation has shed about 40%. The capitalization has reduced from more than $1 trillion to around $1.3 billion. Inflation pressure and interest rates hike is choking the stock market, affecting consumers.
Elwood Integrates Bloomberg
Elwood and Bloomberg announced an integration in February to serve both companies’ clients. The partnership was to enable Elwood’s crypto trading platform to flow into Bloomberg’s order management system directly.
Elwood also sold $1 billion in blockchain-based assets to CoinShares in 2021. The deal is a fragment of the agreement for CoinSahres to acquire Elwood’s indexing business.
“Unless the infrastructure is there, and you get comfort around the quality of the underlying architecture, then you’re never really going to get the volume to match the opportunity,” added Elwood CEO.