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Investment Banking

Investment Banking: The Blockchain Revolution

Last Updated on October 4, 2021

What are Investment Banks?

Conventional banking is the traditional financial system that has been around for centuries. While it has served us well, it is now obsolete and incapable of meeting today’s financial needs. Fortunately, a new financial revolution in Investment Banking is upon us. This revolution has been made possible through Blockchain technology – an ingenious invention by a group or person known as Satoshi Nakamoto.

The financial crisis of 2008 showed us that the current banking system is broken. It is fraught with corruption, fraud, and a lack of transparency.

Who are ‘Traditional’ Financial Institutions?

investment banking specializes in large-scale projects which require massive funds – such as real estate development, mergers & acquisitions (M&A) activity, and initial public offers/share issues. Think Goldman Sachs, Morgan Stanley, and JPMorgan Chase. They’re typically headquartered in major international cities like New York City, London, and Hong Kong. You’ll often find them in the top 10 largest banks in the world.

Traditional finance institutions like investment banks usually deal with public lenders such as government institutions, multinational corporations, and large financial companies (insurance companies). Their role is to channel capital from these large-scale institutions and make it available for use by private individuals and small businesses.

Why The Blockchain Is Crucial To investment banking: Transparency & Security

The blockchain represents a revolution of epic proportions. It brings unmatched security and transparency to the table, which is absolutely essential for investment banks. Transactions are encrypted so that they cannot be tampered with or altered once completed – making them highly secure. They are also immutable – meaning they cannot be deleted – which ensures complete accountability at all times, safeguarding against corruption.

The blockchain’s decentralized nature means there is no central hub that can be exploited by hackers or compromised in any way – making hacking attempts virtually impossible because all blocks are simultaneously stored on each computer within the network. If there is a problem, users have real-time access to multiple backup copies of their data – so they’re not facing a situation where they’ve lost everything overnight without being able to do a thing about it.

How investment banking are Redefining Investments for Our Digital Future

In the ever-changing technology world, it is easy to forget that there are large financial markets behind all of the blockchain projects and cryptocurrencies that we hear about on a day-to-day basis. However, while many in the crypto space focus on tokens and coins as investments, the investment banks have been working quietly to create new investment opportunities using digital assets.

To give a better understanding of what some of these recently created opportunities look like, let’s take a moment to discuss private equity funds. Private equity funds are one way for investors to gain exposure to new types of assets without actually purchasing them directly. This works by pooling together money from multiple investors into one big fund. Then this fund looks for good assets that would yield a profit if bought. If they find something, the fund buys it and shares the profit with all of its members. This is a great way for investors to gain exposure to digital assets without actually buying them directly, which would normally cost much more money.

Investment banking is working on creating Digital Asset Investment Funds that will allow you to buy tokens or coins without having to purchase them directly through an exchange. Instead of purchasing tokens or coins, you will be able to purchase equity in these investment funds using USD or other fiat currencies. Since this fund owns digital assets, when the value of their holdings increases in terms of their target currency (USD for example), then your share in that gain increases as well. These funds are essentially just like traditional private equity funds that we discussed earlier, except they invest in digital assets such as cryptocurrencies and blockchain-related companies. So instead of just owning a piece of the company like you would through an IPO, you also own that company’s cryptocurrency or token.

This type of fund is incredibly attractive to investors for multiple reasons: It allows them to gain exposure to investments in new and innovative technologies without having to purchase and manage those tokens directly, which might require technical expertise beyond their knowledge. It allows investors early access to promising new projects because these funds can be bought through traditional investment channels such as banks, financial advisors, etc… This means that an average investor who has no previous experience purchasing cryptocurrencies can now do so easily. The entire process is similar to how one might buy stocks on the stock market.

The first Digital Asset Investment Funds were only recently created and are currently available for accredited investors (individuals whose annual salary is above $200,000 or have a net worth of over $1 million). However, as regulation around cryptocurrencies and blockchain-powered companies continues to evolve we can expect this asset class to continue growing by leaps and bounds. The more that digital assets such as cryptocurrencies and tokens become mainstream investments, the easier it will be for everyday people to invest in them.

So why should you care? If you missed out on investing in Bitcoin or Ethereum early on, then these investment opportunities could provide another way for you to gain exposure to cryptocurrencies and blockchain-related projects through financial markets without actually having to purchase and manage those assets directly.

Mainstream Myths on the Industry and Why They’re Just That – Mainstream

“You’re going to work 100-hour weeks, be chained to your desk, and eat cold pizza at 2 a.m.,” said the older brother of my college roommate who was already working in finance. When he told me about the hot women and rich lifestyle I could enjoy if I joined him, it was an easy decision — after all, we were business students and this seemed like the best path for someone with limited street smarts but strong analytical skills. In fact, as soon as I arrived on Wall Street as a summer intern during my junior year of college, one of my first bosses taught me that Wall Street operates on two speeds: “hot chick” speed and “Grandpa Pete” speed.

In freshman orientation at Harvard, they warned us in no uncertain terms: “A career in investment banking or consulting will require you to work 15 hours a day, and many weekends,” said one of the speakers. A classmate asked why we would need to work so hard — we were in college after all — and was reassured by another speaker that this was just for a summer internship, he wasn’t expected to continue working like that when school started.

In my experience on the Street, I think every young professional has been told that “bankers” work long hours. This is true but only half the story because these people do not tell you that junior investment bankers generally spend their time doing administrative tasks such as organizing conference rooms, lining up cabs and cold-emailing potential hires.

“You get to make the world’s most interesting, intelligent people do whatever you want,” said my friend who was already working in the industry. I guess that was true but I found out later that I didn’t really work with these people, just their assistants, and associates. At Goldman Sachs, summer interns described themselves as “the lowest of the low.” “It’s like working your way up from the mailroom to the assistant,” wrote one intern on his blog. The investment banking culture at big banks typically dehumanizes junior employees, encouraging them to act like entitled tools. They are given titles such as analyst or associate without much responsibility attached so they can perform menial tasks designed merely to impress senior bankers (toiling away in an open plan office environment, competing with other employees to be noticed by senior bankers).

Promotions are decided primarily by your ability to make your bosses look good; if you do something nice for them they will take care of you. And what better way is there to make people like you than by helping them save time?

“Hedge funds are about making huge returns, not following rules or working hard,” said my cousin who works in a hedge fund. He was right but the only reason he could coast on his past performance was because of employer-of-the-year awards and trophies lining his office walls. Like most professionals in finance, he defined being successful as being rich instead of doing great work – it’s a common mind trap that leads many young financiers to adopt an entitled attitude.

“You’ll be at investment banking, over the summer of 2010 before he started full-time in their M&A division after graduation. While it’s true that junior bankers do more glamorous work than trainees on the corporate side, they too arrive around 7:30 or 8 a.m. and stay until 6 or 7 p.m., working longer hours than most people in Western countries (including residents of many developing nations). For example, just after signing purchase papers for his new $5 million apartments on Park Avenue during his first year out of college at Goldman Sachs, my friend roamed the streets of New York for an hour at 10 p.m. with his new girlfriend because he was too tired to carry on a conversation and stopped caring about looking normal or unpretentious. “You would never be caught dead near work during the day,” wrote another friend who worked in M&A, “but at night you’ll go out and stay out until 4:30 am.”

Challenges Faced by Modern-Day investment banking Employees and How AI is Helping Us Overcome Them

The relationship between man and machine is going to develop even further going forward. In the financial sector, this is certainly true as well. In the past few decades, computers have been used in various ways to better serve clients and investment banking alike.

In finance, there has been a clear shift away from manual processes for many years now. With machines performing more complex tasks, it’s only natural that humans’ roles would change a bit as a result – a trend that will continue into the 2020s and beyond.

What are the Main Skills of an Investor & How to Acquire Them?

Since investing is much more than just making money, understanding your inner self well enough will be crucial for success .

Like car driving, investing is a learned skill. While it can take years to get comfortable with your inner self and make big bucks at the same time, the proper attitude will speed up the process.

First of all, you should believe in yourself and never give up. Then, it’s recommended that you study before taking any actions. It may not be applicable for everyone but I like to think of this as an ongoing learning process. However, even if it sounds boring sometimes (it does), there’s nothing more exciting than finding something new about yourself or becoming aware of facts that can lead to better results. Also worth mentioning is that good decisions require good information, therefore always use quality sources and do some research on your own.

It’s also worth mentioning that making mistakes is good for you. As they say, only photogenic people don’t make them! So in case, something goes wrong (very unlikely), don’t make a fuss about it!

Every experience is valuable in some way. Just stay positive and learn whatever can be learned from each situation or outcome. With practice, I’m sure anyone will become an expert in no time using this approach.

Since we’ve mentioned many different skills here, let’s make a list before going any further:

  • Emotional skills/psychology
  • Decision-making skills
  • Physical endurance
  • Learning skills
  • Discipline

I’ll go more in detail about each one of these. But first, let’s take a look at the pros and cons of investing to see why it’s so important to have all or most of them covered. And don’t worry, I’m not going to mention any pie in the sky stuff even though you’re bound to learn something new here too.  

  Again, keep in mind that these are just the main skills since there are many others that can be equally important depending on what you need them for. For example, if your goal is making money, you will need to have many of the skills listed here. But if your goal is something else, some of them may not apply at all or they can be replaced with other skills.

Using only one example, let’s take a step back and think about what really makes an expert investor successful. Why are some people making millions using just their wits while others who are equally smart are losing money? Of course, there are many answers to that question but I’ve found out that most successful investors work on themselves very hard before doing anything big. So again, investing begins with understanding yourself first!  

Every new skill you acquire means better results! This is because it gets easier to make decisions based on your knowledge, so it’s very useful to study even if you’re not interested in finance.

Continuing with the list of skills that every investor should have:

  1. Emotional skills/psychology is definitely one of the most important ones especially when things go wrong. Learning how to stay cool under pressure will help you avoid reckless decisions since your emotions can lead to rash behaviors and bad results. So if you know what I mean, confidence is a must! However, keep in mind that learning doesn’t stop there since other areas require attention as well such as patience, discipline, and risk management, all of which lead to better results over time.   
  2. This brings us to our next skill which is decision making. Making decisions without having the necessary knowledge, especially in the financial world is one of the biggest mistakes that most people do. As I mentioned before, good decisions require good information.   
  3. This leads us to our next skill which is physical endurance. If you want to be successful in trading or investing, you’ll need it too. There are some traders who make millions while sitting behind their desks (they either have a degree in finance or they manage money for other people) but there are also many others who spend countless hours making calls and watching screens on their feet. Therefore, always remember that if you plan on working more than 15-20 hours per week then get ready to move around quite a bit because this will lead to better results over time.   
  4. Learning new things is one of the most important skills in life! And this leads us to our next point which is the ability to learn. As I’ve mentioned before, anyone who wants to survive in the financial community needs to learn something new every day because if they fail to do so, their competitors will take over their market shares.
  5. So staying up-to-date with all the changes that are taking place in this world is mandatory for success! And finally, let’s not forget about discipline since it’s also very beneficial for investors just like athletes need discipline when working out. If you’re disciplined enough, you can become a billionaire by being patient and waiting for good opportunities instead of doing everything yourself! For example, Warren Buffet is very disciplined when it comes to investing which is why he’s one of the richest men in the world.   

We are creatures of habit by nature, but human beings are capable of changing their behavior when they know certain risks exist. Therefore, knowing what you should do instead is equally important as knowing what not to do.

Well, that’s it. As you can see, there are a lot of skills needed to become a successful investor. We have identified the most important ones and described them in detail.

Good luck!

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