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Crypto Executives Search for Financial Redemption in the Persian Gulf
With bitcoin in the doldrums, top industry players traveled to Abu Dhabi to score deals with deep-pocketed Emirati investors.
Abu Dhabi: The word went out among those gathered for the crypto conference: The Big Money guys were here. Representatives from a $330 billion United Arab Emirates sovereign-wealth fund were said to be circulating—if only they could be found.
Many of crypto’s biggest players trooped to Abu Dhabi last week, hoping to secure deals with deep-pocketed Emirati investors who could inject fresh vigor into the industry following two months in the doldrums.
Crypto executives careened around the U.A.E. capital, dashing between a half-dozen different conferences, a “Whale Only” night at a secluded beach club, and champagne-soaked parties aboard superyachts. They traded intel about exclusive dinners with star guests, and sought out supposed gatekeepers to the royal family.
At the Bitcoin MENA conference was Michael Saylor, founder of the largest bitcoin-buying firm Strategy, whose share price has more than halved since midyear. He said he had been touring the Gulf to pitch “hundreds of investors”—including sovereign-wealth funds—on his plan to accumulate ever more of the digital currency through myriad financial instruments.
He displayed a presentation, which he said he had shown to potential investors, that portrayed Strategy as a space rocket fueled by bitcoin, headed toward a “$20 Trillion Idea.”
The president of Metaplanet, a Japanese hotel-operator-turned-bitcoin-hoarder whose shares likewise have collapsed, said on stage it was looking to raise money via a new preferred-share plan called “MARS.”
Other prospectors included the Trump family’s go-to investment bank, Dominari Holdings, and the asset-manager arm of Korean conglomerate Hanwha Group, which said it plans to make Abu Dhabi a regional hub as part of a push into crypto products.
The crypto-market downturn caught the industry off-guard. Many participants expected that President Trump’s unbridled support for the sector would lead to accelerating adoption and boundless gains. But while U.S. stock markets have remained close to record highs, bitcoin lost steam in October after a cascade of market liquidations stung traders and exchanges.
And Trump’s legislative agenda for crypto has stumbled, with some Democratic lawmakers hitting the brakes on a new bill to create a regulatory framework for the digital-currency market.
The U.A.E.’s appetite for crypto, however, has only grown.
Last week, Binance, the world’s largest crypto exchange, said it had received full approval from Abu Dhabi’s financial regulator to operate its global trading platform from the capital. A state-backed Emirati investment firm bought a $2 billion stake in Binance earlier this year.
A unit of Mubadala, the sovereign-wealth fund, disclosed in November it had tripled a bet on bitcoin, building a position then worth about $518 million, while Mubadala separately recorded another bitcoin holding via an exchange-traded fund worth $567 million the same month. A spokesman for Mubadala declined to comment.
And Abu Dhabi’s government is luring crypto startups to set up shop in the city’s financial center by offering early financing, free office space and other perks.
“The liquidity, decision makers and infrastructure are all here,” said Kristiina Lumeste, founder of Klumi Ventures, an Abu Dhabi-based venture-capital firm that is raising a $100 million crypto-focused fund from local investors.
The crypto industry split along tribal lines during the week. The hardcore faithful headed to the bitcoin conference with Saylor, whose fans tailed him around the event in the hope of getting a selfie, as his minders begged them to let him leave.
Organizers honored Saylor with a bright orange jacket, with the bitcoin symbol sewn onto its front pocket.
Binance founder Changpeng Zhao, whom Trump pardoned in October after a jail term for an anti-money-laundering violation, strode onto stage wearing a pair of orange high-tops emblazoned with the words: “Trump. Crypto President.”
The pardon followed Binance’s efforts to boost the Trump family’s own crypto venture World Liberty Financial, The Wall Street Journal has reported.
A lawyer for Zhao said the pardon was “completely unrelated to any of Binance’s actual or purported business transactions.” Binance doesn’t have “any direct or indirect financial relationship” with the Trump family or their businesses, the company added.
World Liberty previously said it never facilitated or influenced a decision on Zhao’s pardon.
Zhao and Binance executives a few days earlier had hosted guests at Abu Dhabi’s Grand Prix on a three-story yacht moored trackside by dozens of other mega craft. Hundreds danced late into the night on decks mounted with disco balls, smoke machines and laser lights.
On Monday, Zhao attended a dinner in the St. Regis hotel that included another Trump pardon recipient: the president’s former campaign chairman Paul Manafort, who told the conference he helped persuade Trump of crypto’s merits.
Zhao’s lawyer said many speakers at the conference attended the dinner. Manafort didn’t respond to a request for comment.
The other tribe, the institutional money crowd, hung out at the Abu Dhabi Finance Week conference on the financial district’s waterfront.
Executives from blue-chip U.S. crypto companies Coinbase and Circle mixed with Wall Street figures—including Bridgewater hedge-fund founder Ray Dalio and Blackstone CEO Steve Schwarzman—and representatives from traditional-banking stalwarts UBS and HSBC.
Abu Dhabi’s crown prince attended the opening, along with senior executives from Mubadala and other sovereign-wealth funds. A shop run by the organizers offered Abu Dhabi-branded T-shirts and hoodies with the logo “Capital of Capital.”
Basil Al Askari, co-founder of Abu Dhabi-based crypto brokerage MidChains, which is backed by Mubadala, said there were a lot of U.A.E. first-timers looking to return home with a quick deal.
Several people he met made the “rookie mistake” of assuming he worked for a major U.A.E. investor just because he was Emirati and was wearing a traditional thobe.
Except for a few outliers, he said it typically took a few years of relationship-building, as well as commitments to develop operations here, to persuade a sovereign-wealth fund or major family office to invest.
The fortunate few who did so got to trumpet new deals. In a presentation, RockawayX, a venture-capital firm with about $1.8 billion in assets, called the U.A.E. “the new Wall Street of digital finance,” a week after announcing it would be acquired by a company backed by an Abu Dhabi investor.
“They’re not looking for people to parachute in and leave with a bag of cash,” said Samantha Bohbot, chief growth officer of RockawayX, which had set up a U.A.E. headquarters and a local incubator hub for crypto projects. “You must have some substantive skin in the game, and stay the course.”
Write to Angus Berwick at angus.berwick@wsj.com
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