Navigating Token Performance: The Crucial Role of Investor Relations

Welcome to Crypto Long & Short, our institutional newsletter. 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 the missing piece in token markets is institutional-grade investor relations. A key aspect of investor relations is regular investor calls where management provides forward guidance, as seen in teams like Maple Finance and EtherFi. Research shows 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 crypto, this dynamic is beginning to emerge, with protocols like Maple and EtherFi setting guidance and delivering, resulting in token price increases. However, guidance without delivery is merely marketing. Investor relations in crypto require more than just a dashboard; they demand guidance and accountability. Martin Burgherr, chief clients officer at Sygnum Bank, discusses how institutions are separating custody from execution in crypto, signaling a significant shift in digital asset market structure. This change allows for more efficient use of capital, as collateral can be held in regulated bank custody while still accessing exchange liquidity. The infrastructure is being built by institutions, and this separation is expected to make institutional participation possible at scale. According to a survey, 73% of institutional investors plan to increase their digital asset allocations this year, with a focus on counterparty risk. The migration to this new market structure is already underway.