Goldman Sachs Divests R3, then Invests in Axoni
Fortune reports that Mega Bank, Goldman Sachs has divested from R3, the important Blockchain startup created in 2014. Goldman Sachs did this by choosing not to renew their $100,000 yearly membership and failing to meet fundraising goals. R3 is currently looking to sell 90% of its equity to investors, primarily the big 9 mega banks. Many mega banks have continued their investment in R3, but Goldman Sachs decided to opt out, probably to reduce risk in contrast to their other investments.
Investors Swap Investments in “Blockchain” Related Funds
This doesn’t mean they have entirely defunded blockchain start-up investments, instead they have chosen to fund Axoni. Investing among other prominent blockchain investors such as Y Combinator, Marc Andreessen, and F-Prime. According to reuters, Goldman Sach’s investment is said to range between $15 million to $20 million. In a seemingly strange move, they are collaborating with J.P. Morgan Chase on this particular venture.
Their efforts highlight how individuals making up these giant banks have keen interest on the Blockchain technology that powers Bitcoin. I believe the ultimate goal for them is in some form to separate the underlying engine that powers Bitcoin in it’s current form, the Blockchain ledger tech and use it to build their own proprietary version of the current form of Bitcoin.
Banks Still Researching Blockchain Technology
“Banks need to re-evaluate their infrastructure, and blockchain has the power to do that.”
It becomes harder and harder to dismiss Bitcoin as only relevant to basement dwelling crackpots when governments and billion dollar institutions continue to pour their time, energy, and money, into furthering the research and development of it. Reasons for doing so aside, mega banks, such as Goldman Sachs are betting their own cash on previously nebulous technologies. With mega banks throwing money into blockchain related start-ups, it’s a major sign. Blockchain could be utilized by banks to reduce dependence on centralized systems, as hacking becomes more of a problem.
Blockchain Investments add to Bitcoin’s Rising Credibility
Investments by mega banks have proven to add to the reputability of blockchain-based technologies, primarily Bitcoin. It would be easy to assume that mega banks are investing in blockchain to diversify their funds, as well as develop their own platforms. One explanation offered is that the banks are interested in utilizing the technology to reduce the cost of some of their back office transaction fees. What we do know is betting against Goldman Sachs, is a risky one, especially short-term. If they’re curious as to where this technology eventually leads, it’s worth staying update on.