Welcome to Crypto Long & Short, our institutional newsletter. This week, we delve into the world of token performance and the importance of 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. A key component of investor relations is regular investor calls, where management provides forward guidance, as seen in the examples of Maple Finance and EtherFi.
Research has shown that the value of forward guidance lies not only in providing it but also in its accuracy. Firms that consistently meet or beat their guidance enjoy a measurable stock price premium. In the crypto space, Maple has demonstrated this dynamic, setting guidance and delivering on it, resulting in a significant increase in token price. However, guidance without delivery is merely marketing, and investor relations in crypto require a deeper level of accountability and credibility.
In another article, Martin Burgherr, chief clients officer at Sygnum Bank, discusses the shift in how institutional capital moves through crypto markets, with major trading firms separating custody from execution. This change signals a broader evolution in digital asset market structure, allowing for more efficient use of capital and reduced counterparty risk. As the infrastructure catches up, firms are now using collateral held in regulated bank custody while maintaining access to exchange liquidity.
This development is expected to fundamentally change the economics of running an institutional crypto trading operation. The maturing market structure is also reflected in the growing interest of institutional investors, with 73% planning to increase their digital asset allocations this year. As the crypto sector continues to grow and mature, it is essential to stay informed about the latest developments and trends.