A $2 Trillion Crypto Survey Is Coming for C-Suite

A $2 Trillion Crypto Survey Is Coming for C-Suite

After a period of turmoil that still rocked crypto companies to the core, a wave of management turnover is now sweeping the industry.

convulsions that define Cryptocurrency The market plummeted earlier this year and shock waves across the industry have subsided. Now comes the change in C-suite.

More than two dozen senior executives — from Alex Mashinsky, the charismatic and controversial co-founder of the now-bankrupt crypto lender Celsius Network to Brett Harrison of FTX US, and Jesse Powell, outspoken president of FTX rival Kraken — have left their jobs in just the past two months.

While a variety of special reasons have been given for the mass exodus, it is clear that the turmoil that rocked the market starting in the spring took a heavy toll. It would be hard not to, after $2 trillion worth of cryptocurrency has evaporated this way. However, market watchers also see another common thread: the combination of a greater presence of institutional investors, increased regulatory scrutiny, and tighter portfolio restrictions at venture capital firms is causing a reassessment of the type of management needed for the next phase of crypto. Some say the recent lull in the market may itself herald a turnaround, as conventional finance takes a bigger share.

Gone are some of the founders famous for their stoic personalities and social media feuds with rivals and skeptics — replaced, in some cases, with an executive style more gritty than the traditional world of finance. Mashinsky, for example, was replaced on a temporary basis during Celsius’ bankruptcy proceedings by Chris Ferraro, whose biography includes 18 years at JPMorgan Chase & Co.

Stefan Aulet, CEO of FRNT Financial Inc. Some founders can “move forward because the industry has become more professional and they come from an era when it was a bit more tinny.”

crossing the chasm

Among other notable shifts in recent months: Michael Saylor, a software executive turned Bitcoin evangelist, has relinquished the title of CEO of MicroStrategy Inc.; Sam Trabuco has left the position of co-CEO of cryptocurrency exchange Alameda Research; Michael Morrow has left as CEO of Genesis Global Trading; Aya Kantorovic left FalconX Limited, where she was Head of Enterprise Coverage; Voyager Digital Chief Financial Officer Ashwin Prithipaul has resigned from his position at the crypto broker, which has also succumbed to bankruptcy.

For RA Farrokhnia, a professor at Columbia Business School, the changing of the guard is not a unique phenomenon when looking at the history of high-tech products. His current coding environment looks like a new chapter from the 1991 classic Crossing the Chasm.

In this book, author Jeffrey A. Moore discusses the “spread of innovations” theory, which attempts to explain how new technologies spread, and describes the chasm that emerges between innovators, early adopters, and more realistic casual users. World Health Organization Come later.

“Suddenly, you’re not just dealing with early adopters, you’re slowly starting to cross the gap,” said Farrukhnia, executive director of the Columbia Fintech Initiative.

“Fingering” in play?

Even before this year’s massacre, crypto was going through this kind of development. The track acted as an accelerator. In particular, the collapse of the UST stablecoin from Terra blockchain helped send Celsius, Voyager Digital as well as hedge fund Three Arrows Capital into bankruptcy proceedings while also causing pain for many other companies. Suddenly issues such as budgets, controversial figures and questionable business practices are more acute than they were during the bull market last year.

“There is definitely finger pointing at institutions,” said Wilfred Day, CEO of Securitize Capital, a digital asset management company. “Someone has to take the hit. That’s the feeling I saw.”

To be clear, not all of the transformations meant an outright departure, and some say they’ve been in the making for a while. Kraken’s Powell remains at the company as president, while MicroStrategy’s Saylor – now CEO – has partly relinquished his role as CEO so he can focus on the company. Bitcoin strategy. But combined, the changes may still Signal Modification of the content within the cryptocurrency.

The maturity of the industry will show, according to Daye, as more endowment funds and other large institutional investors continue to arrive, “giving that gold stamp of approval.” Already, giants from BlackRock Inc. To Fidelity Investments and Bank of New York Mellon is making its own way.

It’s not just the new administration difference Which is mitigated in order to avoid scaring off a pension fund or endowment looking to plunge into cryptocurrency. Some traders say that even the latest price action in the market bears the imprint of increased participation by institutions.

‘playing chess’

After crashing from its record of nearly $69,000 about 11 months ago, Bitcoin has been mired in a trading range – just above and below $20,000 – since June. This, combined with the tendency of cryptocurrencies to move in the same direction as stocks, is a result of the increasing influence of institutional investors and the exodus of retail traders, according to Michael Savai, co-founder of trading firm Dexterity Capital.

Safai said in a recent episode of “What’s Happening” audio notation. “Now, institutional players are smart. So when we were playing checkers a couple of years ago, we play chess now. And when you play chess, things get tight and these guys keep things in the same range while we’re figuring out prices.”

For venture capitalists investing in cryptocurrency, the growing presence of major financial institutions is a rare bright spot that helps legitimize an industry rocked by hacks and scams.

“It is clearly strong enough and we have enough liquidity now in this space to make it attractive to larger institutions,” said Lauren Stefianian, partner at cryptocurrency firm Pantera Capital. “It’s been something that the industry has been striving for, for many years.”

BlackRock partnership with Queen Piece Global Inc. is helping its clients trade Bitcoin, and BNY Mellon’s launch of crypto custody platform are promising signs for cryptocurrency, according to Matt Walsh, co-founder of Crypto VC Castle Island Ventures. He said increased institutional interest sets this current bear market apart from previous “crypto winters” – the industry’s parlance for a long-term downturn – signaling a greater maturity for the industry. And what about the last group of executive departures? He says they represent a “natural ebb and flow”.

“We will likely see more high-profile management talent entering the space — people who have taken companies IPOs before, people who have run large, highly regulated financial institutions,” Walsh said.

However, for many venture capitalists, the economic downturn has caused a reassessment of the sector. Once he became the biggest fan of the industry, venture capital started to take a dip with cryptocurrency funding Startups It fell 37% to $4.44 billion in the third quarter compared to the same period in 2021, according to research firm PitchBook.

“These markets make it difficult for all companies to raise capital,” said David Backman, managing partner at CoinFund. While cryptocurrency deals are still happening, they are fewer in number and have far fewer valuations than the ultra-high price tags that many crypto companies were able to capture last year.

Backman cited increased regulatory oversight as one of the driving factors driving changes in C-encoded populations. Yuga Labs, creator of the Bored Ape Yacht Club non-fungible token set, and crypto exchange Coinbase have attracted the attention of both we The Securities and Exchange Commission on the possibility of offering unregistered securities. He said that greater scrutiny often “requires a different type of executive” who are more experienced and better equipped to handle this type of situation.

For Thomas Klukanas, General Partner and Head of Project at BlockTower Capital, this crypto winter is a mixed bag. His company raised $150 million this month for crypto investments, but Clokanas said BlockTower plans to spread the capital over two-and-a-half to three years as the market stabilizes — a slow pace for cryptocurrencies, but typical of a benchmark venture capital. He advises companies that are part of his investment portfolio to get 18 to 24 months of financial protection as a boost, and said he expects to see more layoffs in the future. Companies like Blockchain. com and Gemini Trust Co. And Crypto.com has already reduced their workforce.

Klocanas still sees great promise in crypto and welcomes the greater regulatory scrutiny that the new maturity of the industry has brought. He said proper regulation would have prevented crises such as centigrade temperatures. The collapse and subsequent bankruptcy of the crypto-lending platform resulted in clients shutting down $200 million worth of their holdings of digital assets. He said that these types of platforms cannot exist if the cryptocurrency industry is to survive and eventually bring in billions of users.

“No one wants them life Savings to be able to disappear at any moment when they thought they were using a savings account,” he said.

But if cleaning the house in order to get to the next level, it means changes at the top.

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