The crypto talent war is heating up as big money managers warm to digital assets

The crypto talent war is heating up as big money managers warm to digital assets

Date: 09 Jun 2021

At the height of the last rash of cryptocurrency mania in 2017, Daniel Adler created an online crypto and blockchain job board while he learned about the space that, at least for the traditional investment community, seemed to burst out of nowhere.

Adler took an eight-week course online to learn about blockchain, the technology that underpins cryptocurrencies. He was working in financial services in London at the time and took time away to learn how to code and build his own product that would center on the growing industry.

People were drawn to crypto en masse back then, lured by the soaring price of bitcoin — up to about $18,000 a token — and other popular digital coins. By now, we know how that story ended: Fortunes were made. Then prices crashed, and languished for the better part of two years. 

Bitcoin is now up more than 400% in a year and trading near $50,000 apiece. Like other digital currencies, the coin is highly volatile, plunging early Thursday after Tesla CEO Elon Musk tweeted that his electric automaker would stop accepting it as a form of payment. 

Still, big money managers like Morgan Stanley are wading in. The smart money is giving crypto fans something that resembles a second chance at mainstream institutional adoption, and wealthy clients an opportunity to get in on the gains while they last. 

"What you're seeing right now is quite unprecedented. Everyone is hiring right now, and that's across roles," Adler, who runs Cryptocurrency Jobs, told Insider. "I've never seen anything like it since I've been involved in it."

As legacy firms start building out crypto capabilities in units like asset management and research more aggressively than they have in the past, they are going after relatively new talent set to arrive on Wall Street.

Crypto lures people of all stripes, Adler said, from high-school teachers to lawyers, college dropouts, and people in academia. And for many, "it's about building a decentralized, censorship-resistant, permissionless world," he added.

That cultural difference between traditional and decentralized finance presents an extra hurdle for asset managers looking to lure investors, analysts, technologists, and other professionals in the emerging industry.

Major firms are now going after a narrow and competitive pool of employees who have track records in a relatively nascent space. 

A 'paradox' in the search for crypto talent   
The wave of old-school firms have come out with first-time crypto investment offerings this spring as prices have surged. The crypto exchange Coinbase went public last month in a direct listing, signaling wider acceptance of digital coins as a viable investment.

Morgan Stanley recently made three bitcoin funds available to some wealth-management clients, and the custody giant BNY Mellon created a unit to start holding digital assets on behalf of clients.

Meanwhile, CoinDesk reported JPMorgan was considering offering an actively managed bitcoin fund to private-wealth clients this year, and UBS has started exploring offering crypto investments to rich clients, according to Bloomberg. JPMorgan declined to comment on hiring plans, and UBS said in a statement that it was "monitoring the developments in this field of digital assets closely."

Fidelity doubled down on digital assets this spring as it filed to launch a bitcoin exchange-traded fund, and BlackRock earlier this year started investing in bitcoin futures for the first time through two funds.

The challenge for legacy firms is finding employees who are at once crypto-savvy and understand how traditional financial-services firms work, said Neil Dundon, the founder of Sydney recruitment agency Crypto Recruit.

"When recruiting, it's a bit of paradox in itself, as crypto, as we know, was invented as a countermeasure to the traditional finance space," Dundon said.

"Before, it was very difficult to find candidates with both skill sets, but lately we have had a huge influx of candidates coming out of these traditional firms," he said. "The problem is that most only have superficial crypto experience — namely they bought some bitcoin or ethereum on Coinbase."

This time around, relative to the boom of 2017, Dundon said his clients seemed more confident in hiring into this space. He said he had made recent placements such as a salesperson at a New York institutional crypto exchange.

A talent pool with a foot in 2 worlds 
Lauren Wachsman, the executive director at Russell Reynolds Associates, said she was having more conversations around crypto-focused roles across firms and that legacy players were "slowly developing and introducing crypto offerings."

"We have seen more demand for product and engineering roles, some institutional in nature," she told Insider.

Deepali Vyas, a global cohead of fintech in Korn Ferry's financial-markets practice, told Insider her team was advising asset-management clients on adding roles such as a head of research for digital assets. Vyas said she had seen "unusually high demand" for crypto-related roles in the past year and that more fund managers were looking to add crypto offerings. 

"They do not see this as a current trend, but rather getting comfortable that cryptocurrency is becoming a well-defined asset class," she said.

Across public job listings, it shows. The number of jobs posted on LinkedIn with "crypto" or "blockchain" in the title has risen to a record high of 62 roles, according to an analysis of more than 300 financial-services firms' hiring since early 2016 conducted by Thinknum Alternative Data for Insider. 

A live job listing for a lead analyst covering crypto and blockchain at Morgan Stanley says the analyst will "build a cryptocurrency franchise." It adds the firm prefers a candidate with a background in blockchain or crypto and a minimum of five years of experience working in financial markets. 

 

Staffing up as regulators zero in
Gary Gensler, President Joe Biden's pick to run the Securities and Exchange Commission, is the first head of the US securities regulator that has blockchain and crypto bonafides. He has taught courses on those spaces at MIT and is seen as having a deep understanding of the industry. 

Still, Gensler is considered a regulator who will take a tough stance on Wall Street's operations, a new chapter many legacy firms will wrestle with as they start to allow clients to invest in crypto. 

In the SEC's first public statement on crypto since Gensler was confirmed, the regulator said Tuesday that bitcoin and bitcoin futures were "highly speculative" investments and investors should consider the lack of regulation in that market. 

And while he was just recently confirmed, and it remains to be seen how crypto regulation could take shape for exchanges and asset managers, Wall Street is pushing ahead with its plans.

Recruiters see these worlds melding more aggressively — eventually. While younger generations have embraced crypto more than older investors, Dundon of Crypto Recruit said he saw a clearer difference in acceptance across sectors. Those in traditional finance tend to be more conservative, he said, adding: "The thought of crypto melts their brains."

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