Blockchain.com Shuts Down Crypto Asset Management Arm Less Than 1 Year After Launching
Blockchain.com has announced the suspension of its asset management arm due to the extended crypto winter, as reported by Bloomberg. The company cites the challenging market conditions as the reason for the decision, which comes less than a year after the launch of the service.
scoop: @blockchain has suspended its asset management arm and moved to close the unit exactly 11 months after it was launched. at the time, the firm cut hundreds of jobs and saw its valuation potentially shrink to a fraction of its former size of $14 billion
on terminal now, online soon 🔜 pic.twitter.com/PhaKP0a6mk
— Emily Nicolle (@emilyjnicolle) March 9, 2023
Blockchain.com: Short-lived Crypto Asset Division
Following a funding round that raised its valuation from $5.2 billion to $14 billion, Blockchain.com Asset Management, or BCAM, began operations in April 2022. In the same month, Standard Custody & Trust Corporation was selected as the new subsidiary’s custodian partner.
It partnered with Altis Partners to manage its portfolios with Blockchain.com technology. It stated that it will offer “regulated crypto investment products for institutional investors, family offices and high net worth individuals.”
Image: IT PRO
Last year, Blockchain.com did exceptionally well. Despite its current valuation of $3 billion to $4 billion, it just finished a fundraising campaign that saw it reach a valuation of $14 billion by March 2022. This allowed the company to launch its wealth management service the following spring.
This is one of several reduction-related measures taken by Blockchain recently. The Cayman Islands-based firm announced in January that it was laying off 28% of its staff as a direct result of the extended crypto winter.
The term “crypto winter” is often used to describe a bearish market cycle in which the value of cryptocurrencies such as Bitcoin, Ethereum and others decline sharply, leading to a decline in investor confidence and a decline in the overall market value of the industry.
Image: DigiconAsia
During a crypto winter, the cryptocurrency market experiences a long period of significant price drops, reduced trading volume and investor pessimism. This may result in a slowdown in the development of blockchain technology and the use of cryptocurrencies.
Closure to be announced
Blockchain.com has yet to officially announce the decision. Nevertheless, the subsidiary has submitted an application removed from the UK business register, which is currently available to the public.
With its asset management department, Blockchain.com provided a tracking investment strategy for the Bitcoin-to-dollar exchange rate. Bloomberg reports that it also intended to provide “algorithmically risk-managed exposure” to Bitcoin.
Crypto total market cap currently at $887 billion on the daily chart | Chart: TradingView.com
And yet throughout the crypto winter, Blockchain.com witnessed a number of landmarks. During 2022, it was registered in several countries. In June, it also signed a custody agreement with Anchorage Bank and other trading platforms, and in October worked with Visa to develop a cryptocurrency card in the United States.
The company’s first notice of voluntary delisting, which will notify creditors of the subsidiary’s large-scale closure, will be published on 14 March.
– Featured image from Nairametrics
