Young Wall Streeters are going wild for crypto. Their bosses don't know what to do about it.
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Goldman Sachs polled its interns earlier this year on everything from posting to TikTok to the climate crisis. One takeaway: 21% said they'd invested in cryptocurrencies.
Given that Wall Street and its workforce are typically heavily regulated and tracked, I found this striking. In the past, financial institutions have waged war on their staffers communicating on encrypted messaging apps, such as WhatsApp. Now, they're facing a generation that's bypassing brokerage accounts to make investments from their crypto wallets.
At the same time, these firms are looking to get in on the crypto craze themselves, with Citigroup this week appointing an executive to lead a new
Until then, as Reed Alexander and Alex Morrell reported this week, young Wall Streeters are making bank on crypto. Read on for a Q&A on their reporting.
Also in this week's
- April Koh built a $2 billion mental-health startup by age 29. But a fast-paced culture there created "a systemic issue of burnout."
- Clubhouse went from the poster child of VC-backed hype to an app full of "drama rooms" and unhappy creators. This is the story of its rise and fall.
- The Reddit reckoning had short-sellers scrambling. Now they're back with a vengence. "I gave these meme guys, these Reddit guys too much credit," one told Insider.
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Reed Alexander and Alex Morrell take us inside their reporting on how young Wall Streeters are making crypto trades — and what banks' compliance departments are saying about it.
What prompted you to look into young Wall Street trading crypto?
Reed: Alex and I had seen headlines about senior folks on Wall Street making bank on personal crypto trades. We were curious what junior bankers and financial advisors were up to — and how their firms might be thinking about oversight. Wall Street typically has a lot of rules around what workers can invest in, but we discovered that few have any guidelines in place right now that pertain to digital assets.
How are these Wall Streeters able to get around red tape and invest in crypto?
Reed: Cryptocurrency is still very much an emerging asset class, and many on Wall Street are scratching their heads over how to police it. Using digital wallets instead of their brokerage accounts is one avenue they're taking to buy crypto without having to turn over any information about their investments to their employers. But it's unclear how long this flexible environment may last.
How are banks responding to these crypto trades their employees are making?
Alex: It's something of a mixed bag, but primarily it's watch and wait right now. Since most banks don't have significant business operations involving crypto, they're not taking great pains to clamp down on employee trading. That could change if banks get the go-ahead from regulators to embrace digital currencies. We're already seeing some signs of this at places like Goldman Sachs, which has been more eager to pursue crypto than some of its competitors.
April Koh has built a mental-health unicorn backed by Tiger Global by age 29. But the irony of Spring Health, the startup she founded in her senior year at Yale, was that the mental health of some of its employees deteriorated amid a rush to take on more customers.
In a moment when many are reevaluating their priorities and putting a greater emphasis on their mental health, the story reflects a broader debate about startup culture. At Spring Health, moving fast sometimes contradicted the self care it was selling.
Clubhouse was the breakout app of the pandemic, a place for creators to talk over a trendy and social audio platform. But now, the app is struggling to stay relevant and keep its users happy.
"No one really talks about it anymore," one venture capitalist said. And it isn't for a lack of funding. Its user base is dwindling, and so-called drama rooms are hobbling the app.
During the Reddit meme-stock boom earlier this year, retail traders slated short-sellers as sworn enemies.
Many predicted the end of an era. "Wall Street's Most Reviled Investors Worry About Their Fate" blared one New York Times headline.
But today, some short-sellers are thriving more than ever.
More of this week's top reads
- Zillow's CEO took a hit over the recent iBuying fiasco. But he's probably "already planning the next thing."
- The last market bubble taught Henry Blodget how to approach speculation. He shares three lessons ahead of the next bubble.
- Having trouble with procrastination? This productivity hack can help you cut down screen time by 40%.
- Google Cloud salespeople are "frustrated" and worried about layoffs after finding out they might be ineligible for 25% of their huge cash bonuses.
- Amazon is struggling to break into the lucrative market for SaaS business applications.
- Happy hours, holiday parties, and office gossip are back. For remote workers, the FOMO is real.
- China's Xi Jinping is tightening his grip on the country. His plans impact the future of the entire world.
Compiled with help from Phil Rosen.
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- Big unlisted companies may come under tighter regulatory norms
- IndianOil unveils India's first green hydrogen-run bus that emits just water
- Not comfortable with NPAs in urban co-op banks says RBI, asks lenders to focus on governance
- Off-screen love stories: Cinestars who married famous personalities outside the industry