Despite the current market downturn, major financial institutions are continuing to spend billions of dollars on bitcoin.
Bitcoin plummeted from its lofty perch of nearly $40,000 10 days ago, crashing hard into a $25k ledge last Thursday.
Global markets, US interest rates, Chinese lockdowns, and the debacle of the crumbling Terra/Luna ecosystem all combined against any plausible rapid road back for digital assets.
However, the recent upheaval does not appear to have deterred profit-hungry behemoths like Barclays and Goldman Sachs from their unshakable commitment to injecting massive amounts of cash into bitcoin.
Despite the growing number of market doom and gloom, Goldman Sachs’ digital assets chief says the firm has been “actively widening” its interests after claiming that institutional demand for cryptocurrencies has increased.
This week, the US banking behemoth teamed up with its UK counterpart Barclays to support a $70 million fundraising round for Elwood Technologies, a crypto trading platform founded by wealthy British hedge fund manager Alan Howard.
Elwood was valued at $500 million in the Series A round, which had contributions from Commerzbank, Galaxy Digital, and Dawn Capital. While the money was in place long before the latest price decrease, Elwood believes institutions will continue to invest in cryptocurrency.
“We’re getting investment from financial institutions that aren’t expecting to get massive returns in 15 minutes,” said James Stickland, CEO of Elwood Technologies.
The move by Goldman Sachs and Barclays, according to Anton Chashchin, managing partner at Bitfrost.io, could be seen as an example of the growing merger of traditional finance and crypto.
“$1.14tn worth of cryptocurrencies were traded by institutional clients in 2021, up from $120bn the year before,” he said.
Large corporations and even governments are joining the market, in addition to major financial institutions.
Given the current crypto run, there has been a significant shift in the institutional perspective of cryptocurrencies, and the ecosystem continues to evolve in an exciting way. While they are still viewed as a risky asset, there is a better knowledge of the industry’s potential.