Goldman Sachs plans to spend tens of millions of dollars to buy or invest in crypto companies after FTX's collapse hit valuations and dampened investor interest
Goldman Sachs (GS.N) plans to spend tens of millions of dollars to buy or invest in crypto companies after the collapse …
Context & Ripple Effects
Goldman Sachs had already explored raising capital to acquire distressed Celsius assets in 2022, a distressed-crypto asset strategy that focused on a lender’s potential bankruptcy. The new plan broadens that posture from assets to company-level acquisitions and investments.
It also reverses the bank’s earlier retreat from a planned crypto trading desk amid regulatory uncertainty and the later institutional-demand slump that left several banks’ crypto efforts in limbo. FTX’s collapse has made valuations and available capital the immediate opening for Goldman.
First-order effects
- Goldman Sachs gains a mandate to pursue crypto-company acquisitions or investments at valuations depressed after FTX’s collapse.
- Crypto companies facing weaker investor interest gain a potential institutional buyer or capital provider, although Goldman has not identified targets.
Second-order effects
- For prospective sellers, Goldman’s ability to offer either an acquisition or an investment makes control and financing structure part of negotiations alongside a lower valuation.
- Goldman’s move extends its earlier distressed-asset interest into operating-company deals, increasing its exposure to the parts of crypto that survive the post-FTX funding pullback.
Third-order effects
- If other financial institutions follow this selective approach, crypto’s institutionalization would be driven less by trading-desk launches and more by ownership stakes in companies bought during downturns.
- The pattern reinforces a long-running regulatory and institutional-demand constraint: banks may engage with crypto opportunistically while remaining cautious about building broad market-facing operations.
The trend: Crypto’s post-crisis consolidation is drawing selective institutional buyers toward discounted companies and assets rather than broad-based bank expansion into trading.