Investment Bank Moelis Ventures into Blockchain Despite Crypto Bear Market

Key Insights:

• The billionaire-founded firm will act as an advisory to crypto and blockchain companies.
• Executives do not fear market volatility and see it as an opportunity.
• Moelis was hired as an advisory by the embattled crypto broker Voyager Digital.

The New York-based investment bank founded by billionaire Ken Moelis is setting up a division to focus on deals with global blockchain and crypto companies.

The new venture will be headed by global head of media investment banking and Moelis (MC) co-founder John Momtazee. Moelis joins several prominent venture funding firms that continue to pour millions into the fledgling industry despite a 70% crash in digital asset markets this year.

According to the announcement on July 25, longtime venture investor Lou Kerner is joining the firm as a senior adviser to the new division.

No Fear of Crypto Bears

John Momtazee, who previously headed Broadcasting Investment Banking at UBS Investment Bank, said, “We love the timing. We think that to pile in on good days and say, ‘Here we are, ready to help,’ feels less genuine than when there’s a challenge,” before adding “any disruptive technology is going to have volatility.”

Moelis is no stranger to the crypto industry. The firm was hired as an advisory to embattled crypto broker Voyager Digital which suspended withdrawals and filed for bankruptcy earlier this month. The investment bank has also worked with San Francisco-based fintech firm Ripple Labs and blockchain security and intelligence company CipherTrace.

Momtazee added that with more than 50 unicorns and nearly $20 billion of capital raised for crypto and blockchain firms last year, “blockchain technology is poised to be as transformative to the global business landscape as the Internet was in the late 90s.” He added that the company saw strong long-term prospects for its application despite current market volatility.

He said there was substantial interest from within the firm as more than 30% of managing directors already had crypto wallets. “I suspect that the junior bankers and mid-level bankers actually are more active,” he added, “This is a young person’s world.”

Ken Moelis is also bullish on digital assets, likening the crypto sector to the “gold rush of 1848” in an interview with Bloomberg last year. The billionaire also invested in stablecoin issuer Paxos in 2020.

Moelis & Co. assists its clients in achieving strategic goals by offering comprehensive, integrated financial advisory services. It operates from 21 locations across the globe and has advised on more than $3.5 trillion of transactions since inception.

Crypto Markets in Retreat

As expected, a volatile week for crypto markets is unraveling, with a 5.1% decline in total market capitalization over the past 24 hours. The total cap is now back at $1 trillion, having lost $100 billion since the end of last week.

Bitcoin (BTC) has dropped 4.6% in a fall to $21,097, while Ethereum (ETH) has dumped 7.1% to $1,422 at the time of writing.

A Federal Reserve rate hike on Thursday followed by gloomy GDP news in the U.S. could send markets tumbling even further by the end of the week.