Nomura’s Crypto Unit Faces Challenges in Profitability
According to banking giant Nomura Holdings Inc., its cryptocurrency unit, Laser Digital, may take longer than initially anticipated to become profitable due to the recent downturn in the crypto market. Laser Digital was launched by Nomura in September 2022 with the goal of achieving profitability by 2024. However, the unit has been impacted by the volatility and regulatory changes in the crypto sector. Laser Digital’s CEO, Jez Mohideen, acknowledged these challenges in an interview with Bloomberg, stating that factors such as declining volumes and shifting regulatory requirements have caused delays in their profitability journey.
The Impact of Market Turmoil on Laser Digital
Shortly after the launch of Laser Digital, the crypto market experienced a significant correction following the collapse of FTX. This market downturn resulted in a liquidity crunch and increased regulatory scrutiny, eroding over $2 trillion from the cryptocurrency market. These adverse market conditions have added further obstacles to Laser Digital’s path to profitability.
Nomura’s Optimism in the Crypto Space
Despite the challenges, Mohideen remains optimistic about the future of digital assets. He believes that the entry of well-established financial giants like BlackRock Inc. and the increasing interest from institutional investors will bring positive changes to the crypto industry. BlackRock has recently filed a request to introduce exchange-traded funds (ETFs) for spot Bitcoin, indicating growing institutional adoption.
Expanding Operations and Building a Strong Team
In addition to its current operations, Laser Digital has obtained a license to operate in Dubai, enabling it to expand its business segments. The company aims to introduce trading, asset management, and venture capital services in the emirate. Laser Digital has already recruited 70 professionals and plans to hire an additional 20 individuals over time. Furthermore, they are establishing an office in Tokyo to support their global trading activities, with plans to hire 4 to 6 personnel for the Tokyo office.
Hot Take: Navigating Challenges to Unlock the Potential of Cryptocurrency
While Nomura’s Laser Digital may face delays in achieving profitability due to market volatility and changing regulations, the company remains committed to navigating these challenges. The entry of major financial institutions and the growing interest from institutional investors indicate a promising future for cryptocurrencies. By expanding their operations and building a strong team, Laser Digital aims to position itself as a key player in the crypto space. Despite the potential delays, the long-term potential of cryptocurrencies and the opportunities they offer cannot be ignored.
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