Finance

How Revolut, Fidelity and Binance are looking to capitalise on the crypto crash


Crypto may be in the doldrums, but established brands across banking, fund management and digital assets see the crash as a chance to expand in the space.

Challenger bank Revolut announced on 3 August that it would significantly widen its crypto offering to its millions of customers across the UK and Europe by adding 22 new tokens to its trading platform.

Marcus Sotiriou, a crypto analyst at GlobalBlock, said the expansion was “a bold move”, but one that ultimately made sense.

“Revolut is attempting to capitalise on the collapse of other crypto businesses, and therefore acquire a bigger market share,” he said.

“Building and integrating new products when it is cheaper to do so and prices are down could be forward-thinking… The companies that are putting the work in now to provide the infrastructure to onboard more users, may be the ones to reap the rewards during the next crypto upswing.”

Crypto lender Celsius, broker Voyager Digital and hedge fund Three Arrows Capital are among several big names in the sector to have hit the wall since the implosion of stablecoin terraUSD and its paired cryptocurrency luna sent shockwaves through the sector in the spring. 

Meanwhile, companies including crypto exchange Coinbase and trading platform Robinhood have made more than 3,700 combined job cuts in recent months, as tumbling valuations hit business models across the industry. 

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In July, Ari Redbord, head of legal and governmental affairs at blockchain intelligence firm TRM Labs, described the collapses and job losses as “a winnowing out of less sophisticated projects”.

More established brands see a chance to cash in. As well as Revolut, asset manager Fidelity and crypto exchange Binance are also looking to make hay while others struggle. 

Fidelity has embarked on a hiring spree across its nascent digital assets business, while Binance recently said it would hire an extra 2,000 people by the end of 2022.

On 3 August, the world’s biggest crypto exchange signalled its intent to double down on external investments too, by putting its co-founder Yi He in charge of its venture capital arm, Binance Labs. 

Yi He will look to identify early stage blockchain and digital assets-based projects that are deemed capable of disrupting the existing financial system, with the ultimate goal being to “expedite widespread adoption” of Web3 — a popular marketing term used by crypto evangelists to describe a supposed third iteration of the internet that is driven by blockchain.

Binance chief executive Chanpeng ‘CZ’ Zhao said in a statement that the so-called crypto winter presents “an unparalleled opportunity to identify those projects with the tenacity to thrive in tough market conditions”.

Charlie Erith, CEO of Bytetree Asset Management, said “long-term investment continues to pour into the space,” with many venture funds putting “substantial sums of capital to work across the ecosystem”. 

“Activity in the sector, in terms of technology progression, continues to grow, regardless of the price behaviour of the cryptocurrencies,” he added. “There are a lot of investors who feel that the weak pricing environment is an opportunity to learn and get started.”

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To contact the author of this story with feedback or news, email Alex Daniel

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