Goldman and Barclays Investment in Elwood Is a Victory for Crypto Adoption

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Similar to Bloomberg’s Terminal

Elwood Technologies was founded by British hedge fund billionaire Alan Howard with the initial purpose of managing his personal digital asset fortune.

Since 2020, Elwood has moved from asset management to selling market data, trading infrastructure and asset management software to clients who want to invest in digital assets.

According to the Financial Times, the company’s CEO, Strickland, said they provide a technology platform similar to Bloomberg’s widely used terminal and BlackRock’s “Aladdin” portfolio management system.

A bullish sign for crypto

Elwood Technologies CEO James Strickland told the Financial Times that the success of the latest funding round, which comes despite recent turmoil in crypto markets, is “further validation of crypto’s longevity.”

“We’re getting investments from financial institutions that don’t expect massive returns in 15 minutes,” he continued, adding, “I think that’s a message of reassurance.”

Meanwhile, “as institutional demand for cryptocurrency increases, we have actively expanded our market presence and capabilities to meet client demand,” noted Mathew McDermott, global head of digital assets at Goldman Sachs. . He said the latest investment in Elwood demonstrates the bank’s “continued commitment” to digital assets.

Crypto analysts have touted the latest news as another bullish sign for the long-term mainstream adoption of crypto and digital assets.

Cryptocurrency markets have been volatile for the past few weeks. Since early April, the total cryptocurrency market cap has fallen from over $2.1 trillion to less than $1.3 trillion, down nearly 40%, including nearly 20% this week, at the time of writing.

Earlier in the week, the global crypto market cap at one point even fell below $1.1 trillion for the first time since early February 2021.

Fears of slowing global growth at a time when major global central banks plan to aggressively raise interest rates to rein in runaway inflation have been cited as the main cause of the recent plunge.

Cryptocurrencies are still primarily seen as risk-sensitive and speculative assets, hence their sensitivity to risky flows, and are also (like precious metals) allergic to rising interest rates, given that this marks an increase in the opportunity cost of holding non-producing assets like crypto or gold.

While it may be too soon to call the bottom of the recent plunge given the lingering risk that the Fed will become even more hawkish, analysts say longer-term institutional investors are being drawn into the space now that crypto valuations are more favorable.

Goldman and Barclays’ decision to invest in Elwood is part of a general trend by major financial institutions to satisfy the growing demand for crypto trading and investment services from their clients.

US asset management giant Fidelity recently announced plans to let savers in 401(k) retirement accounts allocate up to 20% of their portfolio to bitcoin (BTC) and soon expand to more. other digital assets. Meanwhile, cryptocurrency user metrics continue to rise globally.

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