Goldman Sachs once again invested in a blockchain infrastructure service company. What is the reason behind it?

Goldman Sachs’ head of North American digital assets says blockchain is a key driver of innovation in the financial services industry.

Goldman Sachs continues to double down on the crypto asset space. In April, the banking institution allowed its high-net-worth clients to invest in Bitcoin-based investment products, relaunching its crypto trading desk and has been open to this asset class ever since.

Now, Goldman Sachs has participated in a $28 million Series A investment in blockchain infrastructure provider Blockdaemon. This round of investment was participated by Greenspring Associates, BlockFi, Support, Voyager Digital, Illuminate Financial, Goldman Sachs, etc.

Blockdaemon has achieved significant growth in the past year, reaching a valuation of $5 billion. By the end of 2021, the company expects to be valued at $50 billion, and their products provide leverage options to more than 25 million registered users.

During the same period, Blockdaemon has deployed more than 10,000 nodes in 40 blockchain-based networks. These nodes are distributed in more than 20 regions around the world. In addition, the company has also expanded its grassroots staff to improve operations.

According to the press release, the success of the Series A round demonstrates institutional demand for access to “secure blockchain infrastructure,” with the company aiming to “revitalize” the legacy financial system and its services.

Konstantin Richter, CEO and founder of Blockdaemon, said:

“This funding is a significant milestone for Blockdaemon. With investment from industry-leading financial technology providers and venture capital firms, this round of funding will enable us to further expand our node infrastructure services, add to our growing team, and strengthen our presence in emerging markets around the world, while deepening our existing strategic relationships with financial institutions around the world.”

Richter added that Blockdaemon offers its clients a “simplified” gateway into the blockchain industry and provides tools for “scalable operations,” the latter of which Goldman Sachs may be particularly interested in.

Goldman Sachs is betting that crypto assets can go mainstream, and Blockdaemon allows its institutional clients such as Goldman Sachs to hold and deploy nodes, providing a secure, scalable and "reliable" service.

By acquiring them, the company can enter Ethereum’s Beacon Chain (Eth 2.0), Bitcoin and its Lightning Network, Cardano, Polkadot, Cosmos, and many others. These services are provided through the cloud and the Blockdaemon marketplace.

Oli Harris, head of digital assets for North America at Goldman Sachs, added: “Blockchain is a key driver of innovation in the financial services industry, and Blockdaemon is powering its infrastructure. We are excited to join them as they continue to make institutional-grade blockchain technology available to all who want to take advantage of it.”

Banking institutions have also invested in crypto research company CoinMetrics. Goldman Sachs led its $15 million Series B round in May. At the time, Mathew McDermott, the World Bank's global head of digital assets, said data was critical to mainstream crypto adoption.

As of now, Bitcoin is trading at $33,500. The cryptocurrency by market cap has experienced a lot of volatility over the past day after losing the critical support of $35,000. Currently, this level has turned into resistance and needs to be reclaimed before BTC price resumes its bullish momentum.