Despite the volatility and the failure of stablecoins like UST, institutional interest in cryptocurrency continues to grow. Many traditional asset managers are now launching new cryptocurrency funds and investing in platforms and assets. New tokens are constantly being developed, and new investment mechanisms including derivatives, staking, and liquidity pools add both opportunity and complexity to the risks that must be understood and quantified.
Cloudwall Capital, a new digital asset risk management company, has raised $6.3M in seed funding led by LocalGlobe and Illuminate Financial to help it develop a solution that would connect traditional finance with digital assets and decentralised finance. The funding round saw participation of investors such as IA Capital Partners, Eberg Capital, and NEMO Ventures, as well as founder and operator angel investors from the decentralised and traditional finance sectors, joined them.
Cloudwall plans to use its seed money to expand its team to 15 employees by the end of the year and further develop its platform, with an early access programme set to debut this summer.
Cloudwall Capital, which was founded in 2021 by Kyle Downey, Jia Yng Wee and Ilya Kulyatin is developing Serenity, a new product that will provide institutional investors with risk management insights to help them build portfolios and manage the risks associated with digital assets, allowing them to invest with confidence. For those who do not know, Kyle Downey spent 17 years at Morgan Stanley in various senior technology roles related to its investment bank. He quit to launch New York-based Cloudwall Capital as a fintech firm building a digital asset risk management system.
Rise of digital assets market
This comes at a time when the digital assets market has shown immense volatility. According to the company, this platform intends to assist investors in more precisely assessing risk and correlation, making better investment decisions, and demonstrating to their investors that they have institutional-grade stacks to aid their job.
The cloud-based platform combines risk management and research to provide investors with a comprehensive view of their assets and prospects. It enables investors to access historical data from a variety of sources, including centralised exchanges and blockchain data, in order to analyse and demystify the digital asset market, including the capacity to break down the entire market. Investors will be able to run simulations and stress tests on their portfolios using the platform’s unique statistical and machine learning algorithms to evaluate how they will perform.
Kyle Downey, co-founder and CEO at Cloudwall Capital, said, “Digital assets underwent explosive growth between 2020 and 2021, with almost five years of growth taking place overnight. Recent market gyrations have only increased the case for a digital asset platform to manage risk so that institutional investors have the tools and platforms to help manage their portfolios and risks. We’re building Serenity to do just that and we’re excited about the potential for this platform to enable more people to invest in digital assets and unlock trillions of dollars of assets on the blockchain.”
Jia Yng Wee, co-founder and COO at Cloudwall Capital, said, “It’s becoming clearer to institutional investors that they should invest in digital assets if they aren’t already but they don’t have the tools to help them embrace this new market in a way they are used to. We’re building Serenity to provide this solution and supporting the careful growth of this industry. It’s incredibly rewarding to be working at the convergence of traditional finance with digital assets and there is so much potential for us to have an impact.”
Though NFTs and cryptocurrencies are the focus of much of the present interest in this field, anything might be tokenized in the future in what Cloudwall refers to as the Blockchain Economy. Stocks and bonds will be included, as well as real estate, art, antique cars, intellectual property rights, commodities, account receivables, and more.
Institutional investors want tools to gain access to this new economy and invest with confidence; according to a poll conducted last year, seven out of ten institutional investors anticipate investing in or purchasing digital assets in the future.