The institutional herd is coming, or so crypto optimists once said. The Block reports that institutional-centric offerings in this ecosystem have begun to lose talent, as this facet of the Bitcoin market loses its status as an oasis in the market drought.
But is it really the end for institutional participation in the cryptocurrency world? Maybe. Maybe not.
CoinList Loses Wall Streeter
Per an exclusive report from The Block, CoinList, a crypto startup focused on giving blockchain projects a proper platform, recently lost Rob Salman. CoinList spokespeople explained that Salman, formerly of Charles Schwab, Bloomberg, and the Nasdaq, left his position as the head of business development at the firm.
The Wall Street alumnus was responsible for building out CoinList’s institutional branch, specifically through the creation of a so-called alternative trading system (ATS). Interestingly, The Block claims that CoinList’s institutional venture is still on track.
Regardless, this underscores that Wall Street isn’t entirely prepared for this space.
Just weeks earlier, Jamie Selway left Blockchain.com’s Principal Services branch, which focused on institutional clientele. It was claimed that while Selway was a valuable member of the San Francisco-headquartered team, “that segment” of the market has slowed as the “needs of professional investors” have grown over the last year. And as such, the company determined that it was best if it handed over the institutional reins to more Bitcoin-focused businesspeople, who would be more fit appealing to “crypto-native” firms, funds, and investors.
Don’t Worry, Crypto Still Looking Hot
With the aforementioned developments mind, a clear argument can be made that the incumbents of the legacy world aren’t actually enamored with this asset class. But, many argue that this is far from the case. In fact, some insiders note that this investor subset is slow to move, rather than hesitant to take on risk in any way, shape, or form.
Mike Novogratz, a Goldman Sachs partner turned head of a crypto-centric merchant bank, recently took to Twitter to note that work is being done “under the hood” when it comes to institutions and Bitcoin. Novo, as the Wall Street veteran is also known, is likely referring to the vast array of infrastructure plays that may entice institutions into this ecosystem in the coming months.
Even ‘on top of the hood’, prospects are looking bright. Bakkt, for instance, secured a $182.5 million cheque from the Intercontinental Exchange (ICE), Novogratz’s Galaxy Digital, Boston Consulting, among other crypto-friendly groups at the start of 2019.
Bakkt competitor ErisX has also made strides in recent months. Per previous reports from Live Coin Watch, the Chicago-based upstart recently secured a handful of notable hires. After inviting Joe Lubin of Ethereum and ConsenSys to join its board, Wall Street legend Tom Chippas called on employees of the CBOE, Youtube, and Barclays to foray into the cryptocurrency realm.
More controversially, JP Morgan, the world’s sixth largest bank, recently unveiled its own cryptocurrency (if you want to call it that). For those who missed the memo, the bank-backed asset will be tied to physical U.S. dollars and will first be based on Quorum, JP Morgan’s private Ethereum-based chain. Eventually, the asset will go multi-chain, with interoperability solutions allowing for JPM Coin to be transacted in different ecosystems.
Umar Farooq, the Wall Street institution’s blockchain division lead, claims that his team intends the venture to eventually be a multi-purpose asset for the bank’s operations, whereas “anything, where you have a distributed ledger, [that] involves corporations and institutions” will use the stablecoin. For now, however, the JP Morgan executive made it clear that the newfangled offering is intended to bolster the company’s internal, yet international corporate transactions.
Although the venture has been deemed inherently centralized, it is clear that the heavyweights of the traditional world are keeping a close eye on this space, in spite of the crash in the value of Bitcoin.