Jane Street's top crypto trader shares the wisdom
Thomas Uhm, one of Jane’s Street’s premier crypto traders, is confident about the financial industry’s adoption of cryptocurrency, in spite of some lingering challenges.
Jane Street set up its crypto trading desk in 2017, which Uhm joined the same year. He began building out Jane Street's crypto team shortly after that, several years ahead of its competitors.
Speaking at the Digital Asset Summit in London this week, Uhm called the adoption of crypto elements by banks and other institutions “very, very fast” – by their standards. By crypto standards, though, Uhm said banks' rate of adoption is “very, very slow.”
Turner Batty, another foundational member of Jane Street's crypto team, said in January that Jane Street had dozens of employees working on crypto globally and that the number of people the electronic trading firm employs in the area has "never been higher.”
Nonetheless, Jane Street doesn't appear to have done much crypto hiring in recent months, although it did bring in Virginia Romano, a former head of business development at Coinbase, to work in New York recruitment this September.
Traditional finance firms are restrained by their bureaucracies, Uhm said. “For these large asset managers, these pension funds, to get any product whitelisted, you have to get the approval of a very large degree of communities within an organization… It takes a while to work through that process.”
Tax complications are another issue. Uhm said crypto is listed as an “intangible asset", meaning that every time it fell in value it had to be written down. "But you couldn't write up the value of crypto as it went up until you sold,” he explained.
The Financial Accounting Standards Board changed their accounting system for crypto to what Uhm called a “fair value accounting system”, which he believes “does remove some of the barriers that are that we're seeing for, specifically corporate treasuries or public companies.”
The move would allow businesses holding cryptocurrencies to revise their price upwards as well as downwards, and therefore impacts balance sheet valuations.
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