Specialist
Former head at Anchorage Digital Bank National Association (Anchor Labs Inc)
Agenda
- Anchorage and peers' operating environment across cryptocurrency financial services
- Competitive dynamics between Anchorage and competing cryptocurrency platforms such as Coinbase (NASDAQ: COIN), Bakkt (NASDAQ: VIH), Gemini and Binance
- Assessment of offerings across trading, staking and custody through Anchorage's federal bank charter
- Outlook for H2 2021 and beyond as cryptocurrency continues to grow
Questions
1.
Could you give an overview of what Anchorage does and its role in the broader cryptocurrency ecosystem?
2.
Could you outline some of the evolutions around crypto custody? What were the earlier days like compared to where we are now?
3.
How would you describe the current offering environment for Anchorage and its peers? What 2-3 concerns or drivers impacting the company should investors monitor?
4.
How are you assessing institutional demand? Most people I talk to expect an acceleration in institutional adoption, but what’s your take on that? What custody innovation or regulation would further drive institutional crypto adoption?
5.
What kind of regulation are you expecting? SEC [Securities and Exchange Commission] Chairman Gary Gensler is positive on crypto and some regulatory clarity seems likely. What potential positive or negative scenarios could come from this that would impact companies such as Anchorage?
6.
Could you outline Anchorage’s competitive landscape? I understand it’s difficult to compare players considering that Anchorage started in custody but now does trading, governance, lending and so on, but top players have mixed offerings across the board. How you would rate the quality of the key players?
7.
Do you think that Coinbase or any other large, well-capitalised competitor could replicate Anchorage’s security protocol system? My understanding is that trading in and out of your positions gets very tricky with some other custody solutions. Do you think that Coinbase is inclined to develop a similar solution – but not necessarily replicate it – that offers the same trading functionality?
8.
You mentioned that cold storage is being commoditised and that even Anchorage is experiencing pricing pressures. Do you think the company is perhaps better-insulated here than peers given its differentiation and custody iteration?
9.
What are your thoughts on potential trading fee erosion across the board over time? A possible concern about Coinbase for an investor is the threat of trading fees being compressed and continuing to drop. I believe the company’s current average fee is about 0.57%.
10.
Do you think Anchorage’s lending business could be threatened by potential broad crypto price declines? This business seems to be the mid-to-long-term play for the company. How might long-term price decline impact lending businesses such as this?
11.
How does Anchorage’s federal banking charter really enable the company to operate differently vs peers? What’s the significance?
12.
How does Anchorage’s federal banking charter differ from Avanti or Kraken that became Wyoming-chartered SPDIs [special purpose depository institutions]? Credibility aside, how might these companies differ operationally based off their licences?
13.
Anchorage has discussed an aspiration to offer crypto banking as a service. What might this offering involve and how might it compare to what NYDIG and FIS are trying to enable banks with?
14.
There’s been an increased interest in DeFi [decentralised finance] from the institutional side. How is Anchorage positioned for DeFi’s rise? I’m aware it’s custodying DeFi tokens, but do you think that Anchorage has an advantage over peers with its custody, perhaps for reasons that differ from its current advantage?
15.
You mentioned that adding assets to platforms and properly custodying them the way Anchorage does comes with a sizeable financial commitment. Although Anchorage has a great custody solution, it doesn’t support all the assets that institutional investors are interested in, which has caused some customers to move elsewhere. Do you think that Anchorage is approaching the point where it has the necessary assets to keep institutional investors, or is the cost perhaps too high?
16.
You mentioned Silvergate Bank, which has a huge role in the crypto ecosystem. What are your thoughts on its SEN [Silvergate Exchange Network] offering and how does that compare to Signet, Signature Bank’s offering?
17.
What are your thoughts on Signet, which I believe is Signature Bank’s comparable offering?
18.
Who out of the players we’ve discussed today – Coinbase, Gemini, Anchorage – do you think could be long-term market winners and losers? Are there any up-and-coming players we should know about?
