Investment Bank Moelis Ventures Into Blockchain Despite Crypto Bear Market
Key insights:
- The billionaire-founded firm will act as an advisory to crypto and blockchain companies.
- Managers do not fear market volatility and see it as an opportunity.
- Moelis was hired as a consultant by troubled crypto broker Voyager Digital.
The New York-based investment bank founded by billionaire Ken Moelis is setting up a division to focus on deals with global blockchain and crypto companies.
The new venture will be led by global head of media investment banking and Moelis (MC) co-founder John Momtazee. Moelis joins several prominent venture capital firms that continue to pour millions into the emerging industry despite a 70% crash in digital asset markets this year.
According to the July 25 announcement, longtime venture investor Lou Kerner is joining the firm as a senior advisor to the new division.
No fear of crypto bears
John Momtazee, who previously led Broadcasting Investment Banking at UBS Investment Bank, said: “We love the timing. We think that collecting on good days and saying ‘Here we are ready to help’ feels less genuine than when there is a challenge ”, before adding “any disruptive technology is going to have volatility”.
Moelis is no stranger to the crypto industry. The firm was hired as an adviser to embattled crypto broker Voyager Digital, which suspended withdrawals and filed for bankruptcy earlier this month. The investment bank has also worked with San Francisco-based fintech firm Ripple Labs and blockchain security and intelligence company CipherTrace.
Momtazee added that with more than 50 unicorns and nearly $20 billion in capital raised for crypto and blockchain firms last year, “blockchain technology is as transformative to the global business landscape as the Internet was in the late ’90s.” He added that the company saw strong long-term prospects for the application despite current market volatility.
He said there was significant interest from the firm since more than 30% of CEOs already had crypto wallets. “I suspect junior bankers and mid-level bankers are actually more active,” he added, “this is a young person’s world.”
Ken Moelis is also bullish on digital assets, comparing the crypto sector to the “gold rush of 1848” in an interview with Bloomberg last year. The billionaire also invested in stablecoin issuer Paxos in 2020.
Moelis & Co. assists its clients in achieving strategic goals by offering comprehensive, integrated financial advisory services. It operates from 21 locations worldwide and has advised on more than $3.5 trillion of transactions since its inception.
Crypto markets in retreat
As expected, a volatile week for crypto markets is unraveling, with a 5.1% decline in total market capitalization over the past 24 hours. The total cap is now back at $1 trillion, having lost $100 billion since the end of last week.
Bitcoin (BTC) has fallen 4.6% in a fall to $21,097, while Ethereum (ETH) has dumped 7.1% to $1,422 at the time of writing.
A rate hike by the Federal Reserve on Thursday followed by gloomy GDP news in the US could cause markets to fall further towards the end of the week.
