Forget moving into private equity, or hedge funds, or even fintech – more young people are now making an early exit from Goldman Sachs and other large banks because they’ve already made a fortune from…cryptocurrencies.
While many senior bankers fear crypto could undermine the financial system – Jamie Dimon, in words he now regrets, famously called bitcoin a “fraud” last year – those lower down the pecking order have no such qualms. They see digital currencies as a means to generating enough money to leave their day jobs, reports Bloomberg. In March, Adrian Xinli Zhang made director at Deutsche Bank in New York aged just 29, but departed that same month on the back of his earnings from trading bitcoin in his spare time, sources told the news agency.
He is not alone. “I’m in a position where it doesn’t make sense to work at BlackRock anymore,” says Asim Ahmad, who poured his savings into Ether and then left his job at BlackRock’s London office. “The one-day volatility of my portfolio is higher than my salary, so if I get a few investments right then I’ll have made the same as my yearly wage and everything else on top is a bonus.”
At least three front-office staff members at Goldman in New York – including Jonathan Cheesman, 36, and Justin Saslaw, 28 – have quit the firm after making crypto windfalls, reports Bloomberg. Some young bankers are making money not just from trading the new currencies, but from taking advantage of market inefficiencies, including price variances on different exchanges.
What are these ex-bankers doing now? Perhaps unsurprisingly, some are setting up firms in sectors related to crypto. Zhang is reportedly working on a trading platform for digital assets, while Ahmad helps manage a fund that invests in blockchain businesses.
Although the total number of young bankers making large sums from digital currencies remains low, a crypto generation gap among finance professionals certainly appears to be opening up. “You’ve seen a bifurcation internally at many larger houses where senior managers are very skeptical about crypto, while graduates and younger team members are very positive,” says Adam Grimsley, co-founder of crypto hedge fund Prime Factor Capital. “The youngsters may have less intellectual baggage and may be more open-minded, but they also have less responsibility for managing risk and working out the practicalities of bolting on crypto to the existing business.”
Separately, crypto isn’t the only newfangled career option out there for bankers – you could try firewalking. Julius Cardoza spent more than 20 years at HSBC, including a stint as CEO for Belgium where he says he was “working silly hours”. Cardoza now runs a London life coaching firm – HSBC is among his clients – and teaching people to walk over hot coals is one of his services. “Firewalking is transformational for the rest of your life because after that there’s nothing you’re frightened of because you have already tested yourself to the limits of what you think you can achieve,” he explains.
Meanwhile:
The top 25 hedge fund managers earned an average of $615m in 2017. (CNBC)
Political turmoil in Italy is particularly bad news for European banks. (Wall Street Journal)
Umberto Giacometti, HSBC’s private equity co-head for Europe, has left for Nomura. (PE News)
Morgan Stanley’s $2 trillion dream. (Barrons)
UBS recruits the UK’s former EU commissioner as Brexit adviser. (Bloomberg)
Goldman Sachs is turning into a commercial bank. (Business Insider)
Meet the “J.P. Morgan of Europe”….BNP Paribas. (Bloomberg)
This year’s market turbulence brings back bad memories for traders. (Bloomberg)
James Gorman is just like LeBron James. (Business Insider)
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