Cryptocurrencies were once considered a fringe asset class, but the finance industry is now taking them seriously. As the industry matures and gains legitimacy, an increasing number of investors, ranging from traditional financial institutions to new startups, are pouring money into it. The valuations and growth rates are difficult to ignore, particularly when it comes to the infamous Bitcoin, Ethereum, Ripple, Tether, and other well-known cryptocurrencies. Although the high valuations and growth rates are appealing, the true value of crypto assets lies in the underlying technology.
The Search for Talent
Wall Street is looking for talent to fill digital assets teams. The positions range from first-year analysts to senior management and managing directors. However, some of the best talent is choosing startups over well-known Wall Street firms. They recognize that startups pose greater risks than established players, but they also believe that they offer greater rewards.
The big, traditional names include JPMorgan Chase, Credit Suisse, UBS, Deutsche Bank, Wells Fargo, Citigroup, Capital One, Barclays, Morgan Stanley, and Goldman Sachs. They have groups dedicated to cryptocurrency and the underlying blockchain technology.
JPMorgan has one of Wall Street's largest crypto teams. It has over 200 employees in its Onyx division. Onyx is the division that created and launched JP Morgan's crypto, called JPM Coin. JP Morgan focuses on using blockchain and JPM Coin to reduce financial services' pain points. The move into the crypto market is despite CEO Jamie Dimon's constant criticism of the market.
For example, international payments usually involve a complex network of correspondence banks to get a payment from one side of the world to the other; JP Morgan handles $6 trillion of such payments daily to more than 100 countries. Using blockchain, participating banks can validate transactions and save money on remediating mistakes. Processing checks will also be more straightforward and potentially save the industry 75% on costs.
Will Talent Choose Traditional Players or Startups?
The crypto industry is growing and offers opportunities for Wall Street and startups. Wall Street has the disadvantage of regulatory compliance, meaning they move slow on projects, but once they get started, they can scale into the billions quickly. On the other hand, startups have few hindrances and can be bolder in their ventures.
But if you want to make a name for yourself in a bold, new, innovative, and cutting-edge innovation, there is a brand liability for working in a traditional financial institution. If you want to make a name for yourself in the industry, you are better off in a startup.
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