Navigating Token Performance: The Importance of Institutional-Grade Investor Relations

Welcome to the Crypto Long & Short institutional newsletter. This week, we examine the missing piece in token markets: institutional-grade investor relations. Jordan Brewer discusses how poor investor relations can lead to the downfall of a project, while Martin Burgherr breaks down the evolution of digital asset market structure and its implications for institutional participation. A key aspect of investor relations is providing regular forward guidance, which can significantly impact token valuations. Research has shown that companies that consistently meet or beat their own guidance enjoy a stock price premium, and this dynamic is beginning to emerge in crypto. For instance, Maple Finance and EtherFi are leading the way in providing regular investor calls and guidance, which has been rewarded by the market. However, guidance without delivery is merely marketing, and investor relations in crypto require a deeper level of accountability and credibility. Meanwhile, institutional capital is increasingly separating custody from execution in crypto markets, which signals a broader evolution in digital asset market structure. This shift is driven by the need for capital efficiency and reduced counterparty risk, and is being led by major trading firms and institutions. The infrastructure is catching up, with firms using collateral held in regulated bank custody while maintaining access to exchange liquidity. As the market continues to mature, we can expect to see increased institutional participation and a more efficient market structure. Other notable developments this week include the growth of bridges between traditional finance and crypto, and the devastating impact of smart contract exploits on the market.