Goldman Sachs’ Blockchain Spin-off: A $10 Trillion Crypto Market Catalyst?

• Goldman Sachs plans blockchain spin-off to enhance financial asset transactions.
• Tradeweb Markets partners with Goldman to bring traditional assets to blockchain.
• Crypto market surges to $3.2T, raising speculation of a $10T market cap.

Goldman Sachs is spinning off its digital-assets platform into a separate entity. This new company will serve as a hub for large financial firms looking to create, trade, and settle financial instruments using blockchain technology. The bank plans to finalize the spinout in the next 12-18 months, pending regulatory approval.

Goldman’s decision comes as financial institutions increasingly adopt crypto-based technology for traditional asset management and the reinvigorated interest among the wealthy individuals to the crypto market, according to Tony Edward, Founder of ThinkCryptoPod.

Creating an Industry-Owned Platform

To expand its platform’s commercial use cases, Goldman Sachs has begun discussions with several potential partners. Their goal is to create a digital-asset platform owned by industry players to increase scalability and adoption across financial markets.

Tradeweb Markets, one of the first strategic partners, is committed to collaborating with Goldman to find new ways to bring traditional assets to the blockchain. This collaboration will improve the efficiency of asset issuance, trading, and settlement processes by utilizing blockchain’s capabilities.

Goldman’s ambitions go beyond just facilitating transactions, Goldman wants to support the tokenization of funds, enabling their use as collateral within blockchain systems. The idea is to build a scalable marketplace where various participants, including family offices and other institutional investors, can trade with increased efficiency and security.

Crypto Market Surge and Outlook

Meanwhile, the broader cryptocurrency market has seen a surge, with the total market capitalization recently reaching an all-time high of $3.2 trillion according to Lark Davis. Bitcoin continues to dominate, holding a 58.7% share of the market, while Ethereum accounts for 12.4%. 

Also, Ethereum’s gas fees are low, at just 25 Gwei, making transactions cost-effective. As a result, trading activity has increased, with daily trading volume climbing to $181.12 billion, which reflects growing investor interest.

The Fear & Greed Index, currently at 84 out of 100, indicates strong market sentiment and sits firmly in the “Greed” zone. With this market momentum, analysts speculate that the total crypto market cap could reach $10 trillion in this cycle.