Ever since Goldman Sachs MD Aziz McMahon left Goldman Sachs in May 2021 after allegedly making a small fortune in Dogecoin, jobs in investment banks haven't been quite the same. Even if this year's bonuses are as massive as the early reports suggest, there will always be a sense of FOMO - a $2m bonus for 2021 isn't bad if your 2020 bonus was $1m, but what if you could have made more and worked less at a crypto market maker? Worse, what if by sticking with a bank in 2022 you'll be eroding your potential employability in a future that's all about DeFi? As Bloomberg pointed out in an article before Christmas, everyone in banking is comparing themselves to the crypto teenagers worth $20m, and that can be hard on the TradFi ego.
The fact that Bitcoin has fallen around 12% since the start of January and that Dogecoin is now down nearly 80% from the May high when McMahon cashed out, might give some people pause for thought. But crypto enthusiasts aren't dissuaded, and many have jettisoned thriving bank careers on the strength of their convictions.
Sam Peurifoy, the former Goldman Sachs analyst, who went from the GS analyst class to director of finance at Floating Point Group, a crypto operations platform, to partner at Hivemind Capital Partners, the investment firm set up by former Citi trader Matt Zhang, all in the space of three months last year, is among those confident that crypto FOMO is a justifiable thing and that it's not going away.
2022 is the year when crypto markets will receive increased regulatory attention, and that established firms will receive greater clarify on what's fair game, says Peurifoy. At the same time, he predicts that the metaverse and gaming opportunities will drive growth in NFTs. "This fits hand-in-hand with the underlying social narrative of personal ownership over digital assets and data in a continued pushback against "web2-style" big tech," says Peurifoy, who's now the head of interactive investments at Hivemind.
If you're a Goldman analyst (Peurifoy was on the clean tech investment research team) or any other kind of trad banker, and you're thinking of throwing it all for a crypto job, however, Pleurifoy's advice isn't necessarily to go all-in. He suggests staying local. "- Crypto is still a nascent industry, but a lot of traditional finance firms are spinning up internal teams to explore how they can best leverage digital assets. Depending on your career risk profile and how you feel about your current firm, I'd recommend first poking around and seeing if HR has a way for you to explore your interests without having to jump ship."
If you're really set upon leaving, Peurifoy recommends making sure you know what you're getting into. "Start reading the top crypto research sites and establish a very strong understanding of the different sector components (e.g. smart contract infrastructure, currencies & payment platforms, borrowing/lending & asset management, data & identity, NFTs & entertainment)."
Learning about crypto isn't hard, but it can be a maze. Michael Bressler, the ex-JPMorgan commodities MD who's now the global head of sales at crypto market maker GSR, says the best place to start is so-called 'crypto Twitter.' GSR's own Twitter account is one to follow. "Nobody has 10 years’ crypto experience. At this point, if you have a year of crypto experience, you’ll have more experience than half the market,” Bressler told us shortly before Christmas.
In other words, if you move into a crypto role now, you could be very well-placed come 2025.
One of those who quit for the crypto sector last year and who shows every sign of thriving as a result, is Kyle Downey, a former managing director in electronic trading at Morgan Stanley. Downey left MS after 17 years in October to set up Cloudwall Capital, a platform to help institutional investors manage their digital asset portfolios. In the digital future, every asset will be tokenized in the blockchain economy, says Downey. He considered that vision worth leaving Morgan Stanley for.
Cloudwall Capital is hiring. - It already has a head of operations from Nomura (who is ex-Morgan Stanley) in Singapore and a head of research is Tokyo. If all goes well, Downey says the company is likely to add 15 people this year, mostly in New York and Singapore. Downey is obviously pro-crypto career changes. He says the best thing to do is to start trading: "Trading makes you accountable for your learning in ways that just reading does not. Pretty much everyone I know in the space started this way, and most still actively trade." If you're a coder or a quant, Downey advises finding something to analyze and build: "This space rewards doers more than talkers."
Other suggests are to think long term and to avoid skeptical colleagues. "Look up," says one ex-Goldman trader who's made a small fortune on his crypto investments, referencing the Netflix film featuring Leonardo Di Caprio. "I implored people to have crypto a year ago, but they laughed."
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