London-based Crypto Asset Management Arm to Close on Blockchain.com

(Bloomberg) 11 months after its initial launch, Blockchain.com announced it was ceasing operations for its asset management division. Making it yet another victim of the protracted bear market in cryptocurrencies.

The Cayman-based company began managing assets for institutional clients last year, a week after closing a capital round with a valuation of $14 billion.

The subsidiary, which has its headquarters in London, submitted a request on Monday to have its name removed from the UK companies registry. BCAM, also known as Blockchain.com Asset Management, had not yet submitted any annual accounts.

“Blockchain.com Asset Management began operations in April 2022, just before the macroeconomic situation began to quickly deteriorate. We decided to stop operating this institutional product as crypto winter approaches its one-year anniversary, a spokeswoman wrote in an email.

In association with Altis Partners, the subsidiary was created. According to BCAM’s Chief Strategy Officer Charlie McGarraugh from a year ago. The company’s first launch strategy followed the value of Bitcoin in relation to the dollar. According to McGarraugh at the time, the asset manager intended to provide “algorithm-based risk-managed exposure” to Bitcoin and a product that controls exposure to tokens used in decentralized finance.

Over this extended period of low client demand, market shocks, and shaky prices, a constant stream of cryptocurrency businesses has reduced their workforces. Cut expenses, or declared bankruptcy. Since the beginning of the year, crypto enterprises, including Blockchain.com, have eliminated thousands of positions.

Blockchain.com announced in January that it intended to let off roughly 110 employees, or 28% of its staff. After the collapse of the platform’s client, the defunct cryptocurrency hedge fund Three Arrows Capital. It also let go of roughly 150 employees last year.

According to Bloomberg News, Blockchain.com’s valuation was reduced from its previous level to anywhere between $3 billion and $4 billion as a result of an endeavor to attract new capital in October.

In a recent announcement, Blockchain.com, a leading provider of cryptocurrency products and services. Revealed that its London-based crypto asset management arm is set to shut down. This news comes as a surprise to many in the crypto community. As the platform had been gaining momentum in the market. In this blog post, we’ll take a closer look at the reasons behind the closure and its potential implications for the industry.

Background

Blockchain.com was founded in 2011 with a vision to make cryptocurrency accessible to everyone. Over the years, it has become one of the most trusted and widely used crypto platforms. With a user base of over 70 million across 200 countries. The platform offers a range of products and services, including a digital wallet, exchange, and institutional services.

In 2018, Blockchain.com launched its asset management arm in London. The goal was to provide investors with a convenient and secure way to invest in cryptocurrencies. The platform offered a range of investment options, including actively managed funds, index funds, and bespoke portfolios. The service quickly gained popularity, attracting a diverse range of investors, including high-net-worth individuals and institutional investors.

Reasons for Closure

Despite its early success, Blockchain.com’s asset management arm has struggled to compete in an increasingly crowded market. The closure is a result of a strategic decision to focus on the core business and streamline operations. In a statement, the company said that it had “made the difficult decision to sunset our asset management offering” and that it will be “shutting down the fund and returning capital to investors.”

The closure is also in line with the company’s broader strategy of expanding its core products and services. Blockchain.com is looking to invest in new areas, such as decentralized finance (DeFi) and non-fungible tokens (NFTs). To provide users with more diverse and innovative solutions. The closure of the asset management arm will free up resources and allow the company to focus on these new initiatives.

Implications for the Industry

The closure of Blockchain.com’s asset management arm is unlikely to have a significant impact on the overall crypto industry. However, it does highlight the challenges that asset managers face in this rapidly evolving market. With more and more players entering the market, competition is becoming increasingly fierce. To succeed, asset managers need to differentiate themselves by offering unique and innovative products and services.

Another implication of the closure is the impact it will have on the investors who had invested in the fund. While Blockchain.com has said that it will be returning capital to investors. It remains to be seen how quickly and smoothly this process will be executed. Investors may face delays or other issues in accessing their funds, which could erode trust in the platform.

On a positive note, the closure could also lead to new opportunities for investors. With Blockchain.com’s renewed focus on DeFi and NFTs. Investors may be able to benefit from new investment products and services in these areas. These markets are still in their early stages, and there is a lot of potential for growth and innovation.https://moneydigitals.com

Conclusion

The closure of Blockchain.com’s asset management arm is a reminder of the challenges that asset managers face in the crypto industry. Because Of intense competition and rapid technological change, asset managers need to stay agile and innovative to stay ahead.  While the closure may be disappointing for some investors, it also presents new opportunities for the industry as a whole. Because We can expect to see more innovation and disruption in the crypto asset management space in the years to come.https://moneydigitals.com/the-10-most-popular-types-of-cryptocurrencies/