Crypto Biz: Is Goldman Sachs the ultimate crypto contrarian?

Is the U.S. investment bank looking to buy up distressed crypto firms amid the bear market?

One of the oldest pieces of contrarian investment wisdom is to buy when there is blood in the streets. If it were that easy, crypto investors would be euphoric at all the buy opportunities right now. If you’re rattled by the bear market, which has been especially brutal even by crypto standards, don’t beat yourself up over it. Cryptocurrency is still an unproven asset class that operates in the shadow of regulators. I don’t blame you for not buying an asset class that’s down over 70% this year. 

With those caveats in mind, a quiet herd of smart money investors believes that now is the best time to invest in Bitcoin (BTC), digital assets and crypto infrastructure companies — even after the monumental collapse of FTX. Although nothing is confirmed yet, United States investment giant Goldman Sachs is also signaling that crypto is evenly priced after the year-long bear market.

This week’s Crypto Biz explores Goldman’s intrigue with crypto, a new cold wallet design from Ledger, Blockstream’s plunging valuation amid the bear market and the latest news surrounding Three Arrows Capital.

Goldman Sachs reportedly looking to buy crypto firms after FTX collapse

Goldman Sachs’ embrace of crypto appears to be growing, even during the bear market, as the U.S. investment behemoth looks poised to acquire distressed firms in the wake of FTX’s collapse. In an interview with Reuters, Goldman executive Mathew McDermott said crypto companies are “priced more sensibly” today than they were over a year ago and that calls to regulate the industry will ultimately be a positive catalyst for adoption. Although FTX has become the “poster child” for crypto, and not in a good way, the underlying technology behind the industry “continues to perform,” McDermott said.

‘Father of the iPod’ helps Ledger create new cold crypto wallet

The collapse of centralized platforms has been a boon for Ledger, the hardware company known for providing cold-storage crypto devices. After an influx of new orders for its Ledger Nano devices, the hardware company announced this week that it has partnered with Tony Fadell, the inventor of the iPod Classic, to design its newest wallet device. The new wallet, known as Ledger Stax, is said to be about the size of a credit card and features a large E Ink display, wireless charging and Bluetooth support. Remember: Not your keys, not your Bitcoin.

Blockstream raises funds for mining at 70% lower company valuation

Bitcoin infrastructure company Blockstream is reportedly looking to raise fresh financing — but it, too, acknowledges that won’t be easy during a bear market. The Adam Back-led company is prepared to raise capital at a valuation of less than $1 billion, which is 70% below its $3.2 billion valuation in August 2021. According to Back, the additional financing will go toward scaling the company’s mining capacity. As Cointelegraph reported, Blockstream is working with Jack Dorsey’s Block to develop a solar-powered Bitcoin mining facility in Texas.

3AC subpoenas issued as dispute grows over claims of Terraform dump

The disgraced founders of Three Arrows Capital, Su Zhu and Kyle Davies, will be required to give up financial information related to their failed hedge fund, a federal judge has decreed. The approved subpoenas to be delivered to the founders require that they give up any “recorded information, including books, documents, records, and papers” in their custody relating to 3AC’s financial affairs. Once valued at $10 billion, 3AC essentially blew up in the wake of Terra Luna’s infamous death spiral earlier this year. Arrogant as they once were, Zhu and Davies were exposed for a series of horrendous trades that eventually bankrupted their firm.

Before you go: Bitcoin hits $17K — Bull trap or relief rally incoming?

Bitcoin’s price has been fairly stable over the past few weeks, even as the FTX contagion continued to spread. The flagship digital asset scraped above $17,000 earlier this week, raising cautious optimism that the worst of the market downturn has passed. In this week’s Market Report, I sat down with Marcel Pechman and Joe Hall to discuss whether BTC can expect a relief rally soon. I also broke down the so-called “Santa Claus” rally, which many expect to play out later this month. You can watch the full replay below.

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