Welcome to our institutional newsletter, Crypto Long & Short. This week, we delve into the world of token performance and the hidden driver behind it.
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 protocols. The story of Ranger Finance's rapid decline after a successful ICO serves as a prime example.
Institutional-grade investor relations is the missing piece in token markets, and it's essential for protocols seeking public market investors. Regular investor calls, where management provides forward guidance, are a crucial aspect of investor relations. Maple Finance and EtherFi are leading the way in this regard, with their solid investor calls setting a high standard. 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, and this premium compounds over time. In the crypto space, Maple's ability to deliver on its guidance has been rewarded by the market, with its token price rising significantly.
Similarly, EtherFi's projection of a 55% reduction in customer acquisition cost has given investors something concrete to hold them to. However, guidance without delivery is merely marketing, and investor relations in crypto doesn't end with a dashboard – it's just the beginning.
Guidance and accountability are at the heart of credibility for protocol teams, and it's this credibility that builds conviction in public investors. In another article, Martin Burgherr, chief clients officer at Sygnum Bank, discusses the quiet but significant shift in how institutional capital moves through crypto markets. Major trading firms are increasingly separating where they hold assets from where they execute trades, signaling a broader evolution in digital asset market structure. This shift is driven by the need to reduce capital inefficiency and counterparty risk.
Firms like Wintermute and Nomura's digital asset arm Laser Digital are already operating in this way, using collateral held in regulated bank custody while maintaining full access to exchange liquidity. The infrastructure is being built by institutions that intend to use it, and it's changing the economics of running an institutional crypto trading operation.
As the market matures, we can expect to see more institutions participate at scale, driving growth and adoption in the crypto space.