- The investment bank’s crypto division, Zodia Markets Ltd., is in active discussions to acquire part of Elwood Capital Management Ltd.
- This strategic move is supported by billionaire hedge fund manager Alan Howard and is anticipated to finalize this month, as reported by Bloomberg on July 9, 2023.
- Elwood Capital provides over-the-counter (OTC) crypto trading and settlement services.
Acquisition of Elwood Capital: A Game-Changer for Zodia Markets Ltd.
A Strategic Acquisition Amidst Growing Bank Crypto Ventures
The acquisition of part of Elwood Capital Management Ltd. by Zodia Markets Ltd. marks a pivotal development for the investment bank’s crypto division. This move aims to leverage Elwood Capital’s licenses as a virtual asset service provider and investment business in Jersey, enabling a shift towards enhanced OTC settlement services. Last month, Standard Chartered revealed plans to establish a BTC and ETH trading desk in London, signifying its bullish outlook on the crypto market.
Background and Implications of the Deal
Elwood Capital, a sector of Elwood Technologies founded by Alan Howard in 2018, raised $70 million from prominent investors, including Goldman Sachs Group. Howard has been actively reinvesting proceeds from the sale of crypto companies into his firm, Brevan Howard Digital. The acquisition by Zodia Markets, a venture initiated by Standard Chartered in collaboration with Hong Kong’s BC Technology Group in 2021, underscores a strategic alignment focusing on high-speed, wholesale cross-border settlement services.
Zodia Markets’ Strategic Shift in Focus
Zodia Markets launched its crypto exchange in mid-2022, amidst a bearish market, and had to cease operations early in 2024 due to insufficient demand. The firm has pivoted towards leveraging its relationship with Standard Chartered to offer robust settlement services between fiat currencies and stablecoins. Currently, its OTC settlement operations handle daily trading volumes of $50 to $60 million, positioning the firm as a significant player in the crypto settlement arena.
Future Prospects and Standard Chartered’s Bullish Crypto Outlook
Standard Chartered remains optimistic about the future of cryptocurrencies, particularly stablecoins. In a recent blog post, the bank emphasized the integral role digital assets will play in the future of financial services. Geoff Kendrick, the bank’s head of digital assets research, has projected Bitcoin to reach a price of $150,000 in 2024, despite its recent downtrend. Such bullish predictions underscore the bank’s confidence in the long-term potential of cryptocurrencies.
Conclusion
The acquisition of Elwood Capital by Zodia Markets Ltd. is poised to significantly enhance its capabilities in the OTC crypto trading and settlement sector. This strategic move aligns with Standard Chartered’s broader vision of integrating digital assets into mainstream financial services. The ongoing developments and bullish predictions by industry analysts highlight the growing acceptance and potential of cryptocurrencies in the global financial landscape.
