Established by billionaire British hedge fund manager Alan Howard, the institutional crypto trading platform Elwood Technologies has raised $70 million in a Series A fundraising round led by Goldman Sachs and Barclays.
The Financial Times reported on May 15 that crypto-friendly German bank Commerzbank, crypto investment management Galaxy Digital, and Dawn Capital had joined the round. According to the article, Elwood Technologies was valued at roughly $500 million during the fundraising round.
One of Germany’s top banks, Commerzbank has acknowledged that it sought a local cryptocurrency license early this year. This represents the first time a major bank has taken a step toward cryptocurrencies in the county.
Despite the recent decline in cryptocurrency markets, Elwood believes traditional financial institutions such as hedge funds and banks will continue to be interested in investing in cryptocurrencies.
What did Elwood Technologies state on this development?
Elwood’s investment round was already set in motion before the recent decrease in pricing, which has seen the whole crypto market valuation drop by about 15% since May 9, according to CoinMarketCap.
As per Elwood Technologies CEO James Stickland, cryptocurrencies’ “longevity” has been proven by this investment, brushing aside recent price declines.
He also added that when financial organizations invest in such a manner, they don’t expect to see huge profits in 15 minutes. They’re putting money into the system, and he believes that’s a statement of confidence.
Elwood Technologies offers institutional investors a crypto portfolio management solution that includes crypto market data and trading infrastructure. It offers a platform that interfaces with crypto exchanges, liquidity providers, and custodians.
Goldman Sachs continues to invest in cryptos
Mathew McDermott, Goldman Sachs’ global head of digital assets, said that the investment indicated the firm’s continuing commitment to cryptocurrencies.
As per McDermott, as the institutional demand for cryptocurrencies grows, they have been actively expanding their market presence and capabilities to meet customer needs.
Goldman Sachs’ investment signifies the bank’s further foray into digital assets. In early May, the investment bank was the first to provide cryptocurrency exchange Coinbase a loan secured by Bitcoin (BTC).
The loan’s dollar value has not been published. It was expected to be secured by a percentage of Coinbase’s overall holdings of 4,487 BTC, currently worth roughly $170 million.
The loan has a 24-hour risk management system, but it also compels Coinbase to refill its BTC security if prices drop too low.
Goldman Sachs has long been interested in this area and, in March, referred to digital assets and the Metaverse as “megatrends.”
A meeting between Goldman CEO David Solomon and FTX CEO Sam Bankman-Fried, which included Solomon’s offer to assist FTX with future funding rounds and regulatory compliance, was another example of the Wall Street titan cozying up to crypto businesses.
Alan Howard, the primary investor before the Series A investment, will retain a majority stake in Elwood Technologies. In September 2021, Howard co-founded the hedge fund Brevan Howard, which started its crypto investing subsidiary “BH Digital.”
Brevan’s CEO, Aron Landy, has declared that the company is “committed to aggressively developing its platform and capabilities in crypto and digital assets.”
The crypto market is making lower lows every other day. Still, conventional institutional investors like Goldman Sachs, Galaxy Digital, and Dawn Capitals’ increasing interest in digital assets indicate that the crypto market will bounce back eventually.
As is popularly known, institutions buy when retail investors are in panic and selling. Perhaps, the current selling in the market could be absorbed by such big institutions themselves, marking a corner store for the next rally in markets.
