From Early Michael Saylor Bet to Billions in Deals: How Jefferies Became a Crypto Powerhouse

It all started in 2019, when a relatively small software company called MicroStrategy (now known as Strategy) knocked on investment bank Jefferies' door after being turned away by Wall Street giants.

At the time, Michael Saylor's firm had a market cap of nearly $2 billion and was looking to raise capital to buy bitcoin—something bulge bracket banks were reluctant to support.

Jefferies took a chance on Saylor, marking a pivotal deal for the investment bank and the digital assets sector.

Now, Saylor's firm is worth about $111 billion in market cap, other companies are buying bitcoin for their balance sheets, and large Wall Street firms are piling into the digital assets sector.

And Jefferies? The firm is now a full-service investment bank for the crypto and blockchain space, and it's doing billions in deals without the crutch of a trillion-dollar balance sheet or FDIC-insured deposits.

“We don’t change our stripes too often, but when we see opportunity, we move fast,” Alexander Yavorsky, head of FIG investment banking at Jefferies, told CoinDesk in an interview.

The crypto commitment

The game-changing MicroStrategy engagement in 2019 kickstarted a much deeper foray into the asset class for Jefferies.

By 2020, Jefferies had become the first major full-service investment bank to dedicate a senior banker exclusively to crypto. Tim O’Shea, now co-head of digital assets coverage, spends 100% of his time on the asset class.

But don't call them a crypto shop as Jefferies has been consistently doing deals across the board, putting the firm sixth globally in the last twelve months, according to data from Dealogic.

Diving deeper into deals that Jefferies worked on, the firm revealed that it has advised on 120 transactions with over $150 billion of deal value across fintech, market structure, and exchanges since 2015.

This track record, particularly handling deals that involve applied technology and complex regulatory footprints, uniquely equipped Jefferies to handle the hybrid world where crypto meets traditional finance.

“We are a full-service investment banking firm, rather than a crypto shop,” Yavorsky said, "but we’ve built deep sector knowledge, and we know how to structure deals and move quickly."

Over the past three years, Jefferies has steadily increased its involvement in crypto and crypto-adjacent dealmaking, building a track record across capital markets, M&A, and restructuring.

One of the standout deals the firm advised was NinjaTrader on its $1.5 billion acquisition by Kraken, a notable example of consolidation between traditional trading platforms and digital asset exchanges.

The Jefferies team brings the "incredible expertise and talent required to advise on transactions of this size, they are incredibly dialed into the crypto and capital markets universes," Martin Franchi, CEO of NinjaTrader, told CoinDesk in an email statement.

"Understanding the needs of folks in the space were native to how they think and in our case, helped bring together the worlds of TradFi and DeFi for a highly strategic deal that benefits not only both firms, but also our customers,” Franchi added.

Navigating complex world of crypto

What really set Jefferies apart is that the investment bank didn't just stick to the usual deal-making advisory for the industry. With an industry as dynamic as crypto, the bank stayed nimble to take on a much more complex mandate.

It played a key role in one of the industry's most high-profile collapses, serving as adviser to the Official Committee of Unsecured Creditors in the FTX bankruptcy, where it worked to help recover value for stakeholders.

Meanwhile, the bank continued supporting traditional financial institutions that entered the crypto space.

It advised J.C. Flowers on its investment in LMAX, and worked with Victory Park Capital on the SPAC merger with Bakkt.

Beyond advisory roles, Jefferies has executed capital raises for major players like Galaxy Digital (GLXY) and DRW, and has been active in the crypto mining sector through multiple fundraising and advisory engagements.

The firm has also provided strategic advice on a range of crypto exchange transactions, reflecting its broader involvement in infrastructure and market structure developments within digital assets.

A growing influence

Though not a crypto-exclusive investment bank, Jefferies’ activity in the sector points to a growing comfort with the complexities of digital asset finance, and a willingness to engage where traditional firms have often hesitated.

With the lines between centralized and decentralized finance continuing to blur, and infrastructure firms increasingly in M&A crosshairs, Jefferies looks poised to remain one of the most active and experienced investment banks in the digital asset space.

Read more: Bitcoin Mining Profitability Down 7.4% in March as Prices, Transaction Fees Fell: Jefferies

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