Welcome to Crypto Long & Short, your institutional newsletter. This week, we delve into the world of token performance and the missing piece in token markets: robust investor relations.
By Jordan Brewer, investment analyst at Runa Digital Assets, we learn that poor investor relations can lead to the downfall of even the most promising projects, as seen in the case of Ranger Finance. Brewer emphasizes the importance of regular investor calls, where management provides forward guidance, as a key component of investor relations. Maple Finance and EtherFi are cited as examples of protocols that have successfully implemented this approach, resulting in rewarded token valuations. Research highlights the value of accurate forward guidance in stock price premiums and the compounding effect of consistently meeting or beating guidance.
In the context of crypto, Maple's delivery on its guidance has led to a significant increase in token price, outperforming competitors. However, guidance without delivery is mere marketing, and investor relations in crypto require a deeper level of accountability and credibility. In a separate article, Martin Burgherr, chief clients officer at Sygnum Bank, discusses the quiet yet significant shift in how institutional capital navigates crypto markets. Major trading firms are now separating custody from execution, holding assets in regulated bank custody while maintaining access to exchange liquidity.
This evolution signals a broader maturation of digital asset market structure, with infrastructure being built by institutions to support this change. The separation of custody and execution enables collateral to be held in a regulated environment, earning yield and reducing capital inefficiency.
As crypto markets continue to mature, institutional participation is becoming increasingly possible at scale, with 73% of institutional investors planning to increase their digital asset allocations this year.