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I live in Miami, in the free state of Florida. When I arrived six years ago as a refuge from New York City its main attraction was good weather, great real estate deals, a friendly business climate, nice lifestyle and, oh yeah, no ever-increasing state income taxes. But something has been happening. For better or worse, Miami has become Cryptocity.

Examples include:

• This weekend’s Formula 1 Grand Prix sponsored by Crypto.com
• The Miami Heat arena was America Airlines Arena but is now FTX arena, the name also on baseball umpires’ uniforms
• Thousands attended Miami’s April Bitcoin conference
• Blockchain.com will bring 200 employees to the Wynwood district
• Miami’s Mayor backs the crypto movement asking, “how can I help?” build the crypto world in his city: “We are literally taking the gravitational centers of America, in finance it was New York and tech it was Silicon Valley, and we’re just basically yanking it down and making it Miami,” Suarez told the crowd of newcomers, visitors and longtime residents.”

The same Bloomberg article that quotes Mayor Suarez also offers some insights into the serendipity and unusual networking that fuels the crypto growth in Miami, a city that is now fifth in VC investments in crypto startups.

“Moxies [bar/restaurant] is where Sonlin and Konings [head as of a firm named Security Token] became friends with John Pittman, one of the bartenders. Eventually, they lured Pittman into working for their company—a deal that was sealed after a 3 a.m. pitch at their apartment with a presentation titled “Wall Street is Dead.”

This type of untraditional networking is characteristic of the new crypto world and Miami’s anything-goes attitude, where even bartenders are finding themselves in the startup spirit. These days, Pittman still mixes drinks at Moxies on Mondays and Fridays. At Security Token, he works in sales and content creation.”

Let me interject a small bit of recent reality:

• The Bloomberg article notes: “Suarez embraced a MiamiCoin token last year that has fallen about 94% from its peak, according to CoinMarketCap.”
• As I write this, Bitcoin is down almost 45 percent over the last year (but up 30,000% since its inception)
• And my own view of the future that flows the words of William Goldman about Hollywood film success: “Nobody knows anything…… Not one person in the entire motion picture field knows for a certainty what’s going to work. Every time out it’s a guess and, if you’re lucky, an educated one.”

The significance of crypto and events in Miami impacts banking in at least three ways:

Employees. Banks may think that the type of person attracted to crypto has no relevance to banking, but in fact he or she (mostly he’s) possesses many of the characteristics banks should look for in their employees: energy, risk-taking, strong analytics, self-confidence.

What these employees will not do is suffer through a dumb bureaucracy or suffer fools. Loyalty is an outmoded commodity to many of them, but it is also an outmoded commodity to an increasing number of banks.

Making a big bet. Miami is making a bet on crypto and its future. The city will be hurt but not destroyed if and when the crypto craze falls to earth.

For decades FIC has recommended segmentation, selecting the industries, customer segment, and products in which to develop expertise. Being all things to all people is unsustainable. But banks need to avoid going all-in on one concept, as many banks did with commercial real estate. In recent years a handful of banks suffered dramatically due to loan to the taxi industry while other, better diversified, banks managed through the problem with relative ease.

Making money when others don’t. Conference providers, book publishers, and other support groups are making a ton of money off crypto as should crypto trading companies. The firm offering crypto based IRAs may be successful as well, but its clients may suffer. These players are exploiting a growth opportunity for as long as it lasts; once gone, they move on. Conference providers, in particular, need to jump on the new big thing and abandon areas that no longer draw crowds.

Banks need to consider how to emulate the flexibility with which they operate rather than continue to push faded products and services.

I cannot claim to understand how to value Crypto or NFTs. But banks can learn from this new world and consider what it means to them if Crypto and similar innovations, some of which are unknown today, become part of their permanent landscape.

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FIC works with senior management and Boards on issues that are critical for a bank’s sustainability and growth. We emphasize practical solutions that we customize to a company’s capabilities and culture. Reach FIC at cwendel@ficinc.com.