Along with former partner Mike Novogratz, Goldman Sachs has made yet another strategic investment – this time in institutional-grade cryptocurrency security firm BitGo.
Goldman Sachs and Galaxy Digital Ventures Invest in BitGo
Banking giant Goldman Sachs and Galaxy Digital Ventures, a venture capital firm founded by Bitcoin bull Mike Novogratz, have invested $15million in BitGo. For Goldman, the investment was made through its Principal Strategic Investments group. The announcement was made earlier by bitGo on Thursday through a press release on its official website.
BitGo is a cryptocurrency firm focused on providing institutional-grade cryptocurrency security. The company which was established in 2013, helps its clients with security, compliance, and custodial solutions of digital assets.
The other firms which participated in the series B funding round include Valor Equity Partners, Craft Ventures, DRW, and Redpoint Ventures taking the total capital raised in this round to $57.5 Million. The funds raised will help in the development of BitGo’s $1 trillion crypto wallet.
Plans to Build Cold Storage for Institutional Customers
The lack of secure, regulated and trustworthy custodian services has kept institutional investors away from the digital assets market so far. However, there is growing interest within big financial institutions to participate in the cryptocurrency market.
The need for secure custodial services has provided companies like BitGo with an opportunity to grow their businesses. Earlier in July this year, Coinbase also launched their own custody offering.
Speaking on the development, BitGo CEO Mike Belshe said:
This strategic investment from Goldman Sachs and Galaxy Digital Ventures validates both our market opportunity and unique position.
He added:
No one is better positioned than BitGo to serve institutional investors who want to trade cryptocurrencies and digital assets. That’s why we’re focused on figuring out what it takes to secure a trillion dollars. The market’s not there yet but our job is to be ready first.
Rana Yared, Managing Director of Goldman Sachs’ Principal Strategic Investments Group, commented:
Greater institutional participation in the digital asset markets requires secure and regulated custody solutions. We are impressed by BitGo’s product, unique services, and the management team. We view our investment in BitGo as an exciting opportunity to contribute to the evolution of this critical market infrastructure.
Growing Interest Among Institutional Players
This is not the first foray by Goldman into the blockchain space. The firm has made investments in Circle, a peer-to-peer payments technology company and parent company of crypto exchange Poloniex, and recently in Veem, a blockchain-based global payments solution provider. Goldman has also been mulling over offering custody services and a bitcoin trading desk of its own for some time now.
Earlier this week, US-based investment giant Fidelity also announced setting up of a subsidiary which will offer its clients custody as well as trade execution services.
The move by firms like Goldman and Fidelity points toward the fact that there is growing demand from their clients for exposure to the digital assets market.
What are your thoughts on this latest investment by Goldman Sachs in a cryptocurrency firm? Let us know in the comments below.
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