The convulsions that caused the market to tumble earlier this year have stopped. There is a change in the C-suite.
More than two dozen high-ranking executives, from the charismatic and controversial co-founder of Celsius Network to the outspoken head of FTX US, have left their companies.
The turbulence that shook the market in the spring has taken a toll on the market. It would be difficult to not do it, after $2 trillion worth of digital currency was wiped out in a single day. Market watchers say that the combination of a larger presence of institutional investors, heightened regulatory scrutiny and tighter purse strings at venture-capital firms is causing a reassessment of the type of management needed for the next phase ofcryptocurrencies. The recent calm over the market may signify a transition as traditional finance takes a bigger stake.
The industry has been hurt by the decline in the price of bitcoin.
There is a source for this.
In some cases, a more buttoned-up style of executive from the world of traditional finance has replaced some of the founder's famous personality quirks. Chris Ferraro was brought in to replace Mashinsky on an interim basis during the bankruptcy proceedings.
Stephane Ouellette, chief executive of FRNT Financial Inc., said that the business and industry has matured and they are putting in a new management team to fit the environment.
Michael Saylor gave up his CEO title at MicroStrategy Inc., Sam Trabucco left his co-CEO position at Alameda Research, and Michael Moro left as CEO of Genesis Global Trading.
The changing of the guard is not a new phenomenon according to R.A. Farrokhnia. The current environment looks to him like a new chapter in the history of the business.
The author of that book talks about how new technologies spread and how there is a chasm between early and more pragmatic users.
Farrokhnia is the executive director of Columbia's Fintech Initiative.
This type of evolution was going on before this year. The collapse of the UST stable coin sent Celsius and Voyager Digital as well as hedge-fund Three Arrows Capital into bankruptcy proceedings and caused pain for many other firms.
Daye said that there was finger-pointing in organizations. Someone needs to take the hit. That is the sentiment I have heard.
Some say they were a while in the making, but not all shifts have meant an immediate departure. MicroStrategy's Saylor relinquished his CEO role in part so he could focus on the company'sBitcoin strategy, but the changes still signal a change in the tenor of the market.
Daye believes that the industry will mature as more endowment funds and other large institutional investors arrive. Some of the biggest companies in the world are making their own gains.
The new management teams are getting toned down in order to avoid scaring away a pension fund or endowment. Some traders say that the market's recent tame price action bears the fingerprints of increased involvement by institutions.
After crashing from its record of almost $69,000 some 11 months ago, it has been stuck in a trading range of slightly above $20,000 and below it. That is due to the growing influence of institutional investors and the exodus of retail traders, according to Michael Safai, co- founder of trading firm Dexterity Capital.
Over the course of the last five years, we have seen a lot of institutional flow, but now we are seeing a lot more of it. The institutional players are smarter than before. Two years ago, we might have been playing checkers, now we are. When you play chess, things get tighter and these guys are keeping things in the same range.
The presence of major financial institutions is a rare bright spot that helps legitimize an industry rattled by hacks and scam.
Lauren Stephanian is a partner at Pantera Capital and she said that it is attractive to larger institutions. It has been a goal of the industry for a long time.
According to Matt Walsh, founding partner at Castle Island Venture, there are promising signs for the future of digital currency. He said that the current bear market is different from previous ones because of institutional interest. He says the recent swath of executive departures are natural.
More high-profile management talent will likely enter the space, as they have taken companies public before.
The downturn has caused a rethink of the sector. In the third quarter of this year, funding for the industry's biggest cheerleaders fell by a third to $4.44 billion, according to research firm PitchBook.
The markets make it difficult for companies to raise money. Compared to the sky-high price tags that many companies were able to obtain last year, the number of deals is less and the valuations are less.
Growing regulatory oversight is one of the catalysts for change in the C-suites. The creators of the Bored Ape Yacht Club nonfungible-token collection, Yuga Labs, have caught the attention of the US Securities and Exchange Commission. He said that a different type of executive is needed to handle this type of situation.
In the third quarter of this year, global venture capital investing incryptocurrencies fell to the lowest level in more than a year.
The source is the pitchbook.
The general partner and head of venture for BlockTower Capital is not entirely happy with this winter. The $150 million fund that BlockTower raised this month is intended to be put to use over a period of two-and-a-half to three years. He advises firms that are part of his investment portfolio to have at least 18 to 24 months of financial cushion in case of layoffs. Some companies have cut their workforces.
The new maturity of the industry has brought more scrutiny to the field. He said proper regulation would have stopped crises. The collapse of the platform locked customers out of $200 million of their digital assets. He said that these types of platforms can't exist if the industry wants to survive.
He said that no one wants their life savings to disappear when they think they are using a savings account.
Changes at the top are necessary in order to get to the next level.
With the assistance of a person.
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