This episode is sponsored by and The Sun Exchange.
Emerald is an asset manager that previously focused on community banks but, unlike many of its peers, could not stay away from the lucrative business of crypto. Since 2019, Emerald has been investing in companies serving the crypto industry, including Silvergate Bank, Galaxy Digital and Grayscale’s ether and bitcoin trusts. (Grayscale is a CoinDesk sister company.)
This seemingly progressive move got Emerald downgraded by the professional investment analytics source Morningstar from Bronze to Neutral. “Emerald Banking & Finance has moved outside its circle of competence,” Morningstar analyst Eric Schultz wrote, adding that “a big shift into cryptocurrencies in late 2020 and early 2021 calls the discipline of the approach into question.”
Steven E. Russell, however, doesn’t think he moved anywhere beyond his competence: He got into crypto in 2017 by starting with bitcoin, then adding ether and getting into altcoins. “Now I look back and think, well, that was really stupid,” he says of some of his altcoin investments.
However, the experience demonstrated that crypto is the future not only of investments but of financial services as a whole, Russell believes. Now that Emerald is in crypto, more and more clients and even rival funds are approaching Russell asking about that “crypto thing,” what is DOGE, etc.
Russell walks us through his thinking on how the capital markets will have to evolve because of the impact of crypto. “We think [decentralized finance] is really going to change the industry,” Russell said. Listen to Ben, Anna and Danny discuss Emerald’s approach to crypto investments and its vision of asset management of the future.
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