A few months ago, global investment bank Cowen Inc., announced the launch of its digital asset division, Cowen Digital, LLC. Not only does the new division offer trade execution and custody services, but the new unit is also providing digital asset analysis specifically for institutional investors.
Launch of Cowen Digital
In late March, New York-based investment bank Cowen Inc. announced that it launched Cowen Digital, a standalone unit providing the same suite of services that institutional investors have come to expect when they invest in any asset class. The new division offers secure high touch trading; custody services through their partnership with PolySign’s Standard Custody & Trust; fund administration; and digital asset analysis.
Cowen Digital’s digital asset analysis offering, managed by digital data scientist David Kroger, provides corporate access, two weekly pieces covering thematic and market oriented issues, a monthly deep dive analysis of important crypto market developments, access to Washington Research Group’s policy insights on the crypto markets, and coverage of ad hoc client requests. The unit is also building a data warehouse and portal to provide customers with access to high quality crypto data. In addition, Cowen Digital is looking to build tools to help their institutional customers value their digital assets.
Drew Forman, the Managing Director and Head of Cowen Digital, explained the firm’s rationale for launching the new unit, saying “In the past few years, our institutional customers have been expressing a growing interest in the digital asset sector. As we evaluated this market we realized that no one was providing 360 degree coverage for institutional investors in the crypto space. This is why we decided to build out a complete service offering for our customers. Cowen Digital is looking to become the “go to” partner for institutional crypto investors. The provision of a high quality digital asset analysis offering will help us become a true thought leader in the digital asset space.”
At first glance, it looks a little strange for Cowen Inc. to be pouring significant resources into Cowen Digital in the midst of the current crash in the crypto markets. However, Cowen Digital’s management expressed confidence in the endeavor and felt it was currently a great time to build a crypto business because of the amount of time it takes institutional investors to onboard a new asset like crypto. In addition, staffing their crypto unit has become easier in the current bear market as many digital asset professionals have found themselves out of work in response to the difficulties being experienced by many crypto firms.
On the analysis front, Cowen Digital is looking to grow its unique data driven digital asset analysis service, leveraging Cowen’s expertise with its Kyber Data Science unit. In addition, the unit is collaborating with Cowen’s equity research department to obtain a deeper understanding of publicly traded crypto related companies, and with Washington Research Group to understand the key policy developments in the quickly growing area of digital asset regulations.
Cowen is one of the first global investment banks to commit to the digital asset space. As a result of this commitment, we suspect that Cowen Digital will continue to expand its digital asset analysis offering throughout 2022 and 2023 by hiring more analysts and data scientists – a move that will enable it to be well positioned when the crypto market recovers and buy-side investors look to jump into this new asset class.