Blockchain.com has announced the suspension of its asset management arm due to the prolonged crypto winter, as reported by Bloomberg. The company cites the challenging market conditions as the reason for its decision, which comes less than a year after the launch of the service.
scoop: @blockchain has suspended its asset management arm, moving to shut down the unit exactly 11 months after it launched. in that time, the firm cut hundreds of jobs and saw its valuation potentially slashed to a fraction of its former $14bn size
on Terminal now, web soon 🔜 pic.twitter.com/PhaKP0a6mk
— Emily Nicolle (@emilyjnicolle) March 9, 2023
Blockchain.com: Short-Lived Crypto Asset Division
After a funding round that increased its valuation from $5.2 billion to $14 billion, Blockchain.com Asset Management, or BCAM, started operations in April 2022. In the same month, Standard Custody & Trust Corporation was selected the new subsidiary’s custody partner.
It collaborated with Altis Partners to manage its portfolios with Blockchain.com technology. It stated that it will provide “regulated crypto investment products for institutional investors, family offices and high net worth individuals.”
Image: IT PRO
Last year, Blockchain.com fared exceptionally well. Despite its current valuation of $3 billion to $4 billion, it just concluded a fundraising campaign that allowed it to reach a $14 billion valuation in March 2022. This enabled the company to launch its asset management service the following spring.
This is one of several reduction-related measures taken by Blockchain recently. The Cayman Islands-based firm announced in January that it was laying off 28% of its personnel as a direct result of the prolonged crypto winter.
The term “crypto winter” is often used to describe a bearish market cycle in which the value of cryptocurrencies such as Bitcoin, Ethereum, and others decline sharply, leading to a decrease in investor confidence and a decrease in the overall market capitalization of the industry.
During a crypto winter, the cryptocurrency market experiences a prolonged period of significant price declines, reduced trading volumes, and investor pessimism. This can result in a slowdown in the development of blockchain technology and the adoption of cryptocurrencies.
Closure To Be Announced
Blockchain.com has not yet publicized the decision officially. Yet, the subsidiary has submitted an application to be removed from the UK businesses registry, which is currently accessible to the public.
With its asset management division, Blockchain.com provided a tracking investing strategy for the Bitcoin-to-dollar exchange rate. Bloomberg reports that it also intended to give “algorithm-based risk-managed exposure” to Bitcoin.
Crypto total market cap currently at $887 billion on the daily chart | Chart: TradingView.com
And yet throughout the crypto winter, Blockchain.com witnessed numerous landmarks. During the course of 2022, it was registered in multiple countries. In June, it also signed a custody deal with Anchorage Bank and other trading platforms, and in October, it worked with Visa to develop a cryptocurrency card in the United States.
The company’s first gazette notice for voluntary strike-off, which will alert creditors of the subsidiary’s closure on a broader scale, will be published on March 14.
-Featured image from Nairametrics
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