Digital Asset Firms Lure Wall Street Talent from Citadel to Pershing

Talent is fleeing the legacy financial world at an increasing rate in favor of digital assets. In the 2017 boom & bust, only the bravest of souls of the banking system fled into the Wild Wild West of crypto.  The crypto […]

article-image

share

key takeaways

key takeaways

  • As growth rates fall in the legacy banking system, talent is seeking greener pastures in digital assets
  • Inefficiencies in crypto markets create vast opportunities, luring would-be builders of a new financial infrastructure

Talent is fleeing the legacy financial world at an increasing rate in favor of digital assets.

In the 2017 boom & bust, only the bravest of souls of the banking system fled into the Wild Wild West of crypto.  The crypto universe has since matured and the capital raised during that previous bull run went into building projects that are starting to bear some fruit.

Now, some of the people who helped shape institutions in the public market are waking up to the colossal growth opportunity afforded by digital assets. In the early 1990s, the equity market operated with enormous gaps in efficiency and as those gaps closed, it led to an enormous boom of liquidity and financial innovation.

CrossTower is a global digital asset trading firm that is trying to solve a lot of these same problems. It’s CEO, Kapil Rathi helped build out the infrastructure at some of the largest exchanges in the world including CBOE, BATS & ICE. Co-founder Kristin Boggiano, who serves as president, is a veteran securities attorney with experience across multiple regulators, and at institutions including Merrill Lynch, Guggenheim Partners, and the law firm Schulte, Roth, Zabel.

They recently hired Greg Bunn as Chief Strategy Officer, who spent 20 years at Deutsche Bank where he served as Global Co-Head of Prime Finance.  Bunn also led one year as Head of Counterparty Strategy at Citadel, one of the biggest hedge funds on the planet, before making the move into crypto.

The Opportunity

Bunn watched the evolution of market structure in his seat at Deutsche first hand and sees a major opportunity in crypto.  In an interview with Blockworks he said, “We can see in every traditional asset class the progress from a fragmented market to a connected one.  I see the same patterns in the equity market in the 90’s versus what is happening in crypto now. Decentralized worlds still need to be connected.”  

BitGo, one of the largest crypto custodians with over $16 billion of assets, has also succeeded in securing talent from legacy finance. The firm recently hired Jeff Horowitz as Chief Compliance Officer, who before serving at Coinbase spent 12 years as CCO at Pershing, a subsidiary of BNY Mellon that holds over $2 trillion in assets.

As collateral and custody progress in cryptocurrency, so should liquidity, and that is the holy grail for institutional investors.  On liquidity Bunn says, “Flow begets flow, so we are doing partnerships with some retail platforms to incentivize participation in the markets.  CrossTower is launching a long only vehicle that will trade at NAV with a very competitive fee.” 

Once the market structure gets more efficient and liquidity becomes more pervasive, cheaper products can be offered to the marketplace.  The human capital that saw the 1990s evolution now sees this opportunity.

Michael Moro, CEO of Genesis Trading says, “The amount of talent that has recently left Wall Street and jumped to crypto is emblematic of numerous things.  But I really think it boils down to the fact that all of us are witnessing the birth of a new asset class, which really is a once-in-a-lifetime opportunity.  The 2017 rally was largely retail-driven, but 2020/2021 was when the institutions really scaled into it.  The ‘Blue Ocean’ opportunity in crypto today cannot be passed up, and I trust we’ll continue to see the talent migration for many more years.”

Tags

    Upcoming Events

    Hilton Metropole | 225 Edgware Rd, London

    Mon - Wed, March 18 - 20, 2024

    Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

    Salt Lake City, UT

    WED - FRI, OCTOBER 9 - 11, 2024

    Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

    recent research

    Research report - cover graphics (1).jpg

    Research

    In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

    article-image

    BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

    article-image

    Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

    article-image

    The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

    article-image

    While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

    article-image

    Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

    article-image

    DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit