While retail interest in digital assets peaked in 2018, crashed and is rebounding now, institutional interest has been steadily growing. Jeanine Hightower-Sellitto is helping that happen. Previously the COO of the ISE, she’s a managing director at Gemini.
She joins us on the podcast to discuss what it means to be a licensed digital asset exchange and the value it provides for retail and institutional investors. We dive into her experience running exchanges and how Gemini is both similar and different than traditional setups. Jeanine shares her views on what it will take for digital asset exchanges to become more influential to expand crypto ownership. We talk about Gemini’s custody business as well.
I spent many years working in financial markets. For 14 years, I worked at NASDAQ in the International Securities Exchange subsidiary, an operator of three options markets. I was COO when NASDAQ acquired us in 2016.
Digital asset exchanges are a new asset class and investor path for many institutions we deal with. It’s interesting — many of the firms I worked with at NASDAQ on the securities side are also participants on the Gemini market. We provide many of the same functions — liquidity, trading and investing.
Crypto native exchange
A crypto native exchange has been built from the bottom up to serve the crypto community. When you think about the technology involved in a crypto asset and understanding the nuances of building on that tech, storing and securing those assets — there isn’t a lot of experience in these assets in the world today. Crypto is only 10 years old.
Being able to find talent and share talent and resources within a company to build for crypto isn’t that common. And you don’t really find it in other companies that have acquired crypto entities or where their core strengths are not crypto. It’s important to understand crypto is a technology and to build for that from the ground up.
Who uses digital assets
Gemini serves a wide variety of customers. We have a really strong retail business where users come directly to the site to trade. We have a user friendly app. That’s one segment. Retail customers like us because of the top notch security we offer and the trust we instill in the marketplace.
We have trading firms that provide liquidity on the platform. Many of them I know from my experience in markets. We have hedge funds and family offices, too. Registered investment advisors also come to Gemini to find ways to service their customers through our platform.
It’s still an uncertain regulatory environment. We’ve been working hard with regulators. Retail customers are creatures of habit — ease of use and traditional channels are important to a lot of customers. That could mean using our app or getting traditional brokers into the mix. That’s something we’re spending a lot of time thinking about. For others, they’re looking for an ETF to get into the asset. Whatever it is, it’s not a one size fit all solution but we’re all working in the same direction to increase crypto ownership.
Cold custody for institutional clients
Cold storage is a different game than exchange. We cater to buy side institutions, hedge funds, and family offices. They seek a different level of asset protection. They typically have very large size holdings and they need white glove services like reporting, controls on who can access funds and improve withdrawals, biometrics and other bells and whistles.
Cold storage has a much longer sales cycle than the exchange business. You’re not only dealing with a feature set that the business wants. We’ve been responsive to our customers’ needs. We now offer immediate access to trade on assets still in cold storage. We can do that because we have both parts of the business. The sales cycle accelerates near the end. Once they have a short list of providers, it really comes down to due diligence. We recently announced a partnership with State Street. That was something that we worked on for nearly two years on a diligence process with them.