The Wall Street financial institution Goldman Sachs has added another stake to the growth of the evolving crypto space, featuring a $58.5 million fund for cryptocurrency custodian BitGo.
Details of the Deal
Announced on 18th October, the Series B fund increases the Silicon Valley-based company’s whole fundraising to almost $70 million. Also, part of the funding round was made by the Galaxy Digital Ventures, a crypto fund established by Mike Novogratz. Blomberg was the first one to break this news, highlighting that both Goldman Sachs and Galaxy Digital donated nearly $15 million to the funding round.
“If you are investing in any other asset class, you’re probably not worried about the asset just disappearing- but this one, people still have that fear,” Mike Belshe, BitGo’s co-founder and CEO, told Bloomberg in an interview, “we’ve got to conquer that.”
Launched in 2013, BitGo currently has approximately $2 billion in customer properties, which are spread across 95 various digital currencies.
A few weeks ago, BitGo obtained regulatory sanction from the South Dakota Division of Banking to provide certified digital currency custody services, making it the first controlled custodian created specifically for crypto assets.
Nevertheless, it is easier to obtain approval from regulators than to convince vigilant establishments to trust you with their assets. Obtaining financial funding from a company like Goldman Sachs will greatly raise the trust of many other firms to entrust their assets to BitGo.
A Swelling Market for Crypto Custody
In the meantime, BitGo must raise its competitive edge to outsmart the strong competition from legacy financial firms that are on the verge of creating blockchain products. This week, Fidelity Investments- the fifth-biggest property manager worldwide with 27 million customers and $7.2 trillion in properties under management- reported that it was starting a separate firm known as Fidelity Digital Asset Services to cater for digital currency custody and trade transaction services for its institutional clients.