by Joseph Young
Timothy Tam, a former statistical arbitrage trader at Goldman Sachs and senior trader at major Asian hedge funds who managed more than $1.5 billion by trading equities, foreign exchange, and convertible bonds, recently explained why he had to leave Wall Street to enter the rapidly growing cryptocurrency sector.
Escaping Wall Street
On Entrepreneur Europe, Tam outlined his successful career in the finance sector and the experience he garnered by holding a top position at the world’s most prominent financial institutions. Tam’s reputation in the finance industry allowed him to raise over $20 million for his own fund. With the $20 million fund, he acquired 22 family homes in the US, generating over nine percent in annual revenue.
Despite the achievements and financial stability he secured throughout his career, Tam was eager to leave Wall Street and the traditional finance industry to the exponentially growing blockchain and cryptocurrency sector. Eventually, Tam left his comfort zone, high salary, and established reputation in the finance sector to enter the cryptocurrency market.
In 2016, Tam officially resigned from his responsibilities at significant funds in Asia and was appointed as the CEO of CoinFi, a financial intelligence platform for cryptocurrency investors that provides analysis, trading algorithms, and curated research.
Although the cryptocurrency market has experienced exponential growth over the past few years, Tam admitted that his decision to migrate from traditional finance to crypto at the time was perilous. Tam also noted that his entrance into the cryptocurrency sector was based on one crucial prediction; that cryptocurrencies like bitcoin and ether could become a mainstream asset class in the mid-term. He said:
“To be clear, I don’t recommend this path. It’s a risky one to take, and it’s riddled with potholes. But if you’re an entrepreneur worth your salt, you should be paying attention to the crypto space. Failing to do so could be costly.”
In 2016, polished regulatory frameworks and practical policies were non-existent. Governments were trying to crack down on the industry, and leading markets like the US, Japan, and South Korea were not equipped with sophisticated and secure cryptocurrency trading platforms. The state of the cryptocurrency market two years ago was incomparable to today’s conditions, and at the time, influential financial institutions such as Goldman Sachs, the New York Stock Exchange, Morgan Stanley, JPMorgan, and Nomura were not considering the adoption of cryptocurrencies.
Tam noted that he has become significantly more optimistic in regards to the embrace of cryptocurrencies as an emerging asset class. Companies have started to facilitate the rising demand from institutional investors for cryptocurrencies and banks have begun to build products that can be used by their clients to invest in the cryptocurrency market. Tam wrote:
“The crypto market’s unorganized, shallow liquidity pools means institutional investors looking to deploy tens of millions of dollars into the cryptocurrency markets face significant difficulty executing those orders efficiently. The result? Companies like Caspian and Omniex are developing institutional level offerings to address this gap, and Coinbase is rolling out systems to cater to traditional institutional investors.”
Similar Trend in Japan
Former Barclays trader Daisuke Murayama also left the European banking giant for bitFlyer, Japan’s biggest cryptocurrency exchange. Murayama revealed that he took a pay cut to move from the finance sector to crypto because he no longer saw a future in traditional finance. “I just didn’t see a future in traditional finance,” he said, emphasizing that the majority of services provided by banks including offshore banking will inevitably be replaced by cryptocurrencies and companies within the cryptocurrency industry.
More talents and experienced executives are leaving the finance sector to work with emerging startups in the cryptocurrency industry. Such trends can be considered as a driving factor that will likely allow cryptocurrencies to be acknowledged as a dominant asset class in the long-term.