Goldman and Barclays invest in Elwood crypto-platform

Goldman Sachs’ head of digital assets said demand for cryptocurrency from institutions is growing and the firm is “actively expanding” its market opportunities to meet that demand.

Banking giants Goldman Sachs and Britain’s Barclays have joined a $70 million Series A funding round for institutional cryptocurrency trading platform Elwood Technologies, founded by British billionaire hedge fund manager Alan Howard.

Cryptocurrency-friendly German bank Commerzbank, cryptocurrency investment manager Galaxy Digital and Dawn Capital joined the round, according to a May 15 Financial Times report. According to the report, the fundraising round valued the company at about $500 million.

Despite the recent decline in cryptocurrency markets, Elwood said it is betting that traditional financial institutions such as hedge funds and banks will still be interested in investing in cryptocurrencies. According to CoinMarketCap, Elwood’s funding round had already been agreed to and launched before the latest price drop, which has seen the overall cryptocurrency market capitalization shrink by about 15 percent since May 9.

Elwood Technologies CEO, James Stickland said the fundraising was “further confirmation of the cryptocurrency’s longevity,” despite the drop in prices over the past few weeks:

“We’re getting investments from financial institutions that don’t expect to make huge profits in 15 minutes. They’re investing in infrastructure, I think that’s an encouraging message.”

Elwood Technologies provides a cryptocurrency portfolio management system with cryptocurrency market information and trading infrastructure for institutional investors that has an interface that connects to cryptocurrency exchanges, liquidity providers and custodians.

Commenting on the deal, Goldman Sachs’ global head of digital assets, Matthew McDermott, said the investment showed the firm is “consistently committed” to cryptocurrencies, adding:

“As institutional demand for cryptocurrency grows, we are actively expanding our market presence and capabilities to meet client needs.”

The financing from Goldman Sachs marks the bank’s further expansion into cryptocurrency assets. The investment bank was the first to offer a bitcoin-backed (BTC) loan to cryptocurrency exchange Coinbase in early May. The company has long shown interest in the space, even calling digital assets and the Metaworld “megatrends” in March.

Another instance of the Wall Street giant flirting with cryptocurrencies came in a meeting between Goldman CEO, David Solomon and FTX boss, Sam Bankman-Fried, in which Solomon offered to help FTX with future funding rounds and regulatory compliance.

As for Elwood Technologies, the controlling stake will remain with Alan Howard, who was a major investor before the Series A round. Howard co-founded the hedge fund Brevan Howard, which launched its crypto investment arm BH Digital in September 2021.