Goldman Sachs and Galaxy Digital Ventures Invest in BitGo

Financial giant Goldman Sachs (NYSE:GS) has made another investment in the digital currency space — this time with cryptocurrency custodian BitGo.

Announced on Thursday (October 18), Goldman Sachs and its partner Galaxy Digital Ventures — which was founded by Michael Novogratz — lead the US$58.5 million Series B funding, which will support the development of BitGo’s US$1 trillion crypto wallet.

Other investors in this round of funding include Valor Equity Partners, Craft Ventures, DRW and Redpoint Ventures.

Mike Belshe, CEO of BitGO, said the funding puts the company in a good position to provide services to institutional investors who want to trade cryptocurrencies and other digital assets. He added that’s part of the reason why BItGo is focused on “figuring out what it takes” to secure US$1 trillion.

“The market’s not there yet but our job is to be ready first,” he said.

BitGo, which has headquarters in Palo Alto, California, launched in 2013 with the introduction of the multi-signature hot wallet. BitGo is now a leading processor of on-chain bitcoin transactions, accounting for 15 percent of bitcoin transactions around the world. As of 2018, BitGo holds over US$2 billion in assets and supports over 95 coins and tokens in over 50 countries.

“Institutional investors are gradually realizing that digital assets are going to be a game changer, and they want to participate,” Michael Novogratz, founder of Galaxy Digital Ventures, said in the release.

Rana Yard, a managing director of Goldman Sachs’ principal strategic investments group, said with the rise of institutional investors dipping into the cryptocurrency space, so does the need for security and regulated custody solutions.

BitGo provides institutional investors with that piece of mind. Case in point, in September the company announced it had launched BitGo Trust Company, which is the first qualified custodian built with a purpose for storing digital assets. Through this, institutional investors are provided with security, compliance and custodial solutions for currencies backed by blockchain.

While Goldman Sachs continues investing in the cryptocurrency sector, the financial institution curtailed its plans for its own digital currency trading desk in September. Business Insider reported that its reasons for doing so are because regulations around cryptocurrencies still remain unclear, although it may revisit those plans at a later date.

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.