By Daniel Lanyon on Tuesday 26 April 2022
Crypto has been on the hype train for many years but now, in 2022, more and more people want to work in the fast-moving space.
In 2022 crypto is everywhere. Except for Google, where searches for Bitcoin are down to pre-pandemic levels.
While investing in cryptocurrencies such as Bitcoin is as volatile as ever, down 55 per cent since its 10 November high of $68,000, for fintech veterans and incumbent bankers alike, crypto is rapidly becoming the next big career move.
London's investment bankers and financial regulatory class are turning to crypto in droves. The Bank of England's fintech lead Varun Paul, for example, is leaving after 13 years to take on a role at Fireblocks.
Meanwhile, Binance has hired the Financial Conduct Authority's Steven McWhirter as its new Global Director of Regulatory Policy. Matthew Chamberlain, the boss of the London Metal Exchange recently left to join digital asset custodian Komainu in January 2022.
We are seeing a series of high-profile departures from the traditional finance sector to the crypto space as crypto is transforming countless sectors with innovative products.
Why? What’s going on? Is crypto eating fintech?
Innovators vs Scalers
“Fintech was the big sexy thing for the last five years. And now it's one of the least sexy areas because there are so many big companies, the regulations got tougher, the board is now all grey hairs and people from banks,” Chad West, formerly an early Revolut employee tells me.
West joined Revolut in its first few years and after a brief spell at grocery delivery startup Dijia, which was acquired by rival GoPuff last year, is now VP of marketing for crypto wallet provider Argent.
“One thing I'm seeing is more people like me or others from fintech move in, and then we bring people with us,” he said.
In the early days of a boom you tend to get generalist innovators, West says, who enjoy the scrappy fast-paced world of getting a startup from zero to one. Or as Revolut famously emblazoned on the walls of its first office ‘get shit done’. These are ‘innovators’.
“[Innovators are] people who are generalists. They are multi-skilled, usually have high levels of creativity and they have the burning desire to move fast and break things,” he said.
When a company reaches a point of critical mass, four or five years in things start to change. As the need for ‘innovators’ reduces, the need for ‘scalers’ increases, West says.
“These are people who are generally coming from a bigger industry or bigger companies and will bring with them a lot of processes, a lot of bureaucracy and a lot of politics. There's a need for those folks. They've got that skill and expertise of working in much larger organisations, building structure,” he said.
“The innovators don't thrive in that environment at all, though. They don't like bureaucracy. They don't like going through an endless process. They don't like working with people who are polar opposite to how they think. So it's not a classic point of the people you need in years one to four are not the people, you need the four to eight, in the journey.
“So all these innovators naturally then start to hop off, all they care about is what's the next best thing because they go back into their natural environment where they thrive.”
“So all these folks are naturally piling over into crypto because it's kind of like doing fintech all over again. So that's my sort of analogy. But I think there's a little bit of a statement.”
Crypto, crypto everywhere
Crypto’s increasing legitimacy crystalised in 2021 and has moved from strength to strength despite the crash in the market for Bitcoin and other assets, particularly in the UK.
London is becoming a world leader in cryptocurrency. A jobs platform recently revealed the number of employers currently seeking staff in the crypto industry, showing the US as the highest number of vacancies at 3,893 with the UK as second with 954 vacancies with most of these roles are based in London. Canada came in at third with 386 current vacancies.
Globally, investors poured more than $28bn into start-ups in the crypto and blockchain sector last year, a 400 per cent rise from 2020, according to PitchBook, demonstrating just how bullish - and hype-driven - the trend has become with more cash being put to work.
Even JP Morgan CEO Jamie Dimon recently appeared to offer something of volte-face on earlier crypto sceptical comments, when said “Decentralized finance and blockchain are real”.
Nearly one in five (18 per cent) of UK adults now own cryptocurrency, according to Gemini, an exchange for currencies, and other tokens. However, nearly half (45 per cent) of those who invested did so for the first time last year.
UK consumers are crypto curious, with 49 per cent of UK respondents who do not currently own crypto saying they are interested in learning more or likely to buy it in the next 12 months. Of those identified as ‘crypto curious,’ the majority (55 per cent) are women.
“Last year was transformational for cryptocurrency ownership, with significant growth in UK adoption. A high proportion of UK investors see crypto as a long-term store of value, suggesting more people are recognising crypto’s part to play in a diversified investment portfolio,” said Blair Halliday, Head of UK at Gemini.
Stablecoins and NFTs
The UK government has made some of the loudest noises of any major nation backing a move to a crypto-friendly economy.
John Glenn, economic secretary to Treasury, stood in for the UK chancellor Rishi Sunak recently to deliver a paean to the UK's future as a 'crypto hub' as well as more practical applications for blockchain technology in a speech.
This included the use of stable coins in the payments system and potentially the use of distributed ledger technology in government capital markets.
Oh, and the Royal Mint, founded 886 A.D, is going to start pumping out NFTs this summer.
Nonetheless, the regulatory regime for crypto is opaque at best, and downright confusing at worst while the FCA has only managed to recently hire an interim lead for its dedicated ‘digital assets unit’.
For all the unwavering 'crypto maximalist' belief that crypto usurps the traditional order of government and rule makers, regulation seems to be the biggest nut still to crack.
“It's very similar ‘early days’ in terms of the people, but I can see that potentially changing quite quickly, based on the regulatory sort of legal landscape,” he said.
“Crypto is still very much a tech-savvy, elite club. You hear a lot of talk from companies about how they're improving usability and going more mainstream, and I'm just not buying it.”
“I think when you still look at things from onboarding flows, educational materials, or just general usability, it's overly complex. It's overly technical, and I don't think many milestones have been made there.”
Crypto’s hiring spree among the UK’s fintech and incumbent banks alike does seem to chime with a strong regulatory theme. West says a lot of people from regulators or big banks are moving into crypto to help the industry navigate incoming regulations.
“I don't think it's because crypto companies want to employ that calibre or that type of profile. It is because there's so much uncertainty and worry around regulation, that they're queuing up to hire get these big wigs in - whether they're public policy people or regulators - it’s to try and protect themselves,” West said.
“I think there's a big fear. And that's why a lot of these types that aren't, innovators are also joining in at an early stage as well. You haven't really seen so much of that in fintech in the first couple of years,” he added.
Does West have any advice for someone moving from banking to crypto? Yes, prepare for an uphill battle to learn the ropes, he says.
“People think banking is difficult. It's really not, it's actually very, very simple and easy to understand. With crypto, I'm still learning and I'm having to read every single day. The technology is changing every six months as we're now moving from layer one to layer two blockchain."
“You need to be quite technical to work in crypto, and you have to be comfortable knowing that everything that you learned in the last six months could potentially be irrelevant. You have to start from scratch again. There’s a hell of a lot of technical jargon and you really, really have to understand the back end of this industry, which is no easy task.”
“I remember in fintech I'd happily sit in meetings and be able to talk very competently and be outspoken. And now I'm quieter and listen.”
A silver lining though for those making the leap to a career in crypto is the apparently quicker route to monetisation for crypto firms compared to fintechs such as neobanks which need to scale before hoping to approach turning a profit.
“Generally speaking, I think they pay a lot better than FinTech. There is no doubt about that. There's a lot of revenue generation from the get-go and they make decent money. So they're in a position to be competitive on the salary range. as a result of that, they're, they're attracting good calibre talent,” West.
Perhaps a job (and salary) in crypto may even prove to be a higher returning bet than a punt on bitcoin.