Updated: Aug 29
Alloy Lab’s Alchemist Fund is pleased to announce we joined other strategic investors Morgan Stanley, Affirm, New York Life, Mass Mutual, FIS and Fiserv in investing in NYDIG’s Series B round.
The Alloy Labs’ Alchemist Fund is a vehicle for the bank members of the Alloy Labs to gain strategic insights and relationships in areas that are poised to disrupt banking. There is no greater potential disruptor to banking than cryptocurrencies, an ecosystem that has overcome countless challenges to bootstrap a decentralized, multi trillion-dollar asset class.The hype of the highflying, speculative prices and meme-based currencies have overshadowed the potential seismic change crypto could bring to bear on the underpinnings of financial markets.
There are an infinite number of ways to invest in the emerging crypto and DeFi space. We chose NYDIG for very specific reasons that we believe sets them up to be a market leader.
Compliance & Security First
Of the number of opportunities we’ve looked at, NYDIG is far and away the most sophisticated in their approach to two things community banks care about deeply: compliance and security. NYDIG is at the forefront of these key issues. They don’t try to skirt, circumvent, or be cute about the importance of working within existing regulations and standards.
NYDIG is very focused on how it fits into the existing financial ecosystem. They build tangible, in-demand use cases rather than pursuing far reaching hype. We believe their focus on readily addressable problems will serve them well in the long term.
Serve the Masses
NYDIG is built to bring the ability to buy and hold Bitcoin to the masses. Their larger vision of doing the same thing for payments and other use cases meshes well with our focus on community banks’ key customers, who aren’t necessarily crypto enthusiasts or digitally savvy.
NYDIG’s business model works for both banks and consumers. Fees are aligned so everyone wins … no Robinhood transaction model here!
While some exchanges and custodians are reliant on customer trading to drive their revenue models, NYDIG is a straightforward, incentive aligned, model. Unlike most crypto companies, NYDIG’s products will lead to strong financial performance during peak bull and bear markets because they aren’t based on trading volume. NYDIG’s cash flow will further supports investments into new crypto product and service development, which ultimately expands their sources of revenue and the market’s overall crypto adoption.
The 50+ bank members of the Alloy Labs Alliance are excited as several of them begin to implement NYDIG, with more adding it to their roadmaps. We are working closely with NYDIG on the “Serve the Masses” thesis to make cryptocurrency a safe and powerful experience for consumers. It doesn’t hurt that two key executives, Patrick Sells and Mark Gabriel, both worked for Alliance member banks before joining NYDIG —no better proof point that Alloy Labs attracts the innovators who are creating the future of finance.