#5: Christopher Newhouse (ex-GSR trader)

So for me right now, I don't see a scenario where I would be comfortable just being long options and that's usually the trade I like to take. I have the unique opportunity to speak to Chris Newhouse who is a former trader at GSR. GSR are one of the largest market makers in crypto and so Chris has a unique perspective on the crypto markets, especially how the options markets trade. He brings all that kind of unique insight to this podcast and it's the first time where we've really picked a trader's brains on how they think about the market, how they quote on various markets and his views on where we're going now in this low volatility summer and how best to position yourself for it. Enjoy the episode with a market maker and a thought leader in DeFi. Well today I am delighted to be joined by Chris Newhouse who was previously a trader at GSR. How are you Chris? Good. How are you, Hoth? Thanks for having me. Oh, you're welcome. I am well other than like an onslaught of negative news headlines. So I'm hoping that you can change the tone and leave us with a bit more of an optimistic take for listeners, listing in. This is the 13th of June today. And so I'm speaking in the midst of the kind of regulatory onslaught by the SEC. What's your personal thoughts on everything that's going on there? Chris. Yeah. It's been crazy. It's definitely a landscape that is ever changing, especially on the regulatory front. Right. I think that the biggest things that I'm concerned about from the regulatory standpoint are definitely a lot of decentralized venues coming under fire right now. But I mean, whenever I see stuff like this, I also start to see more volumes coming to DeFi. I start to see people starting to move firms to different locations. So Andrewson's opening an office in the UK. We have a dare bit based in Dubai now. So it seems like builders are going to continue to build. They're just going to relocate and adapt to some of the regulatory concerns that are going on right now. And how about yourself, where are you based, Chris? So I'm based in New York right now. I've been living here for about 10, 11 months. I'm here with my fiance. She's fully remote so she can follow me wherever. But I've been, I was previously a trader, GSR for around 10, 11 months and wrapped that up to pursue some exciting things in the option space. What's my non-competes finished? Understood. And does all this kind of regulatory stuff make you want to move country? So are you quite happy with the Web 3 ecosystem in New York? Yeah, that's it. That is a really good question. It's something that I have to think about a lot, especially as a trader. There are a lot of different firms who have kind of started to move their headquarters down to the Bahamut. It cover the US time zone. There are a lot of different firms who are spinning up in Zug, London, Singapore, Dubai, more cryptocurrency, regulatory, friendly landscapes. Ideally, just being young and having recently graduated college and getting married soon as well, I'd love to stay in the US. This is where I was born, where I went to college. This is where all my friends are. But I'm more concerned about staying in crypto, right? So if I want to stay in crypto, which I 100% still believe in and still want to do, I have definitely been open to maybe relocating to London or Europe or some of these more kind of crypto-currency-friendly environments from a regulatory perspective as well. So just being a trader, it's definitely something that's on the forefront of my mind here, especially with all the crackdowns that are going on SEC, DOJ, things along those lines. But for me, I'm always going to go where crypto is going to be and I think that it, as of right now, seems to be pivoting out of the US. But we'll see. We'll see. Very interesting. And so at the onset, I didn't get a chance to ask you for a little bit of background about yourself. So you were a trader at GSR. Could you tell us a little bit more about GSR and your experiences there and what else you've done in the crypto space as well? Yeah, definitely. So GSR, their leading cryptocurrency market-making firm focused on kind of providing liquidity in the spot, Delta 1 and options markets. My role there was as an OTC trader. So I focused specifically on kind of everything to do with the OTC option space, which is heavily, heavily involved in the Altcoin options markets. We'll probably cover that later as well. Trade a little bit of Bitcoin in ETH options and then kind of made markets on the spot OTC liquidity provision side as well. A little bit of background about myself. So I was a graduate from Georgia Tech in 2022. I co-founded a blockchain club there, founded our quantitative trading club there, and was the head of research for our venture capital club there, focusing specifically on crypto side of things in my spare time. So I write some content for a paradigm trading, OTC platform. I write some content for a darebit. One of the largest cryptocurrency options exchange is out there on the centralized venue side of things. I have recently started kind of a mentor type role for outlier ventures. So I'm going to be mentoring their DeepFighter Award and I have a couple of things coming up with them in the next couple of weeks. And then I'm an ambassador for Vertex Protocol. It's a deep by kind of exchange. That's an amazing background, dude. And if I could unpack some of that. So you've got experience on the trading side of things as a market maker. You've got experience working for a options protocol and they're kind of inner workings of how they work. And then also getting deeper into the VC ecosystem and working closely with kind of DeFi projects. With all of that kind of combined, what do you see as the areas of real kind of growth and optimism within DeFi right now? Yeah, that's a great question as well because that's something that kind of bloats around in the VC space as well for me. And this is especially, you know, this is especially for me like one of the biggest areas. Given all the regulatory concerns and regulatory kind of hurdles that everyone's having to overcome right now, I think that one of the most interesting aspects and areas for growth in crypto is definitely what it'd be DeFi. And from what I've kind of seen and from what I've heard and from what I've seen in volumes as well. DeFi options. That's always something that I want to be bullish on. The thing is with DeFi options, it is all about a game of liquidity. Deribit is the most liquid venue as the tightest spreads. You can get so much size off on Deribit combined with paradigm that sometimes it is a non-starter to play around in DeFi. However, for small size, for retail, and I think eventually DeFi is going to be one of the largest kind of options trading spaces available in terms of just this transparency and kind of just the holy ethos of cryptocurrency. I think that DeFi options is something that's very interesting in the next couple of years. Do I think it's going to take off volume wise in the next year? Probably not. I think that Deribit has such a foothold on the market right now, especially for Bitcoin and ETH that it will be very difficult for a lot of these DeFi options protocols to kind of take market share away from that. However, I do think that for the altcoin option space, some of these DeFi protocols are really interesting to me, especially for what they're doing to kind of highlight and bring transparency to some of the altcoin options. Right now, altcoin options are primarily traded OTC. It's one of the things I was quoting at GSR. It's one of the things that a lot of these OTC deaths will quote as well. They're quoting everything from the top 25 market cap coins, depending on how their risk appetite is. They can go even all the way up to the top 500 market cap altcoins. Whenever you start thinking about altcoin options and the landscape there, it starts to get really, really sticky, especially whenever you start quoting some of the more ill-equent altcoins. But yeah, I think the DeFi specifically is going to be one of the leading reasons that these altcoin options are going to be able to take off. That's my perspective there on the DeFi options last year. Very interesting. I put myself in the position of a retail user who is looking to, let's say, buy some calls or puts on Bitcoin or E. So you're right. The majority of the liquidity is on Deribit. Often the best pricing is on Deribit, even though there are unchained equivalents, so you could trade on Dopex or Liver or Premier somewhere like that. When you say you were an OTC trader, OTC stands for over the counter. So there were other parties coming to you at GFR thing. Could you make a bid or an offer on this call or put on another altcoin, a top kind of 20 altcoin, like you said? And that was your job as a good summary of what it means to be an altcoin OTC trader. Yep, perfect summary there. I was quoting everything from top 25 stuff all the way to top 200, top 50. One of the biggest things that we think about whenever we're quoting altcoins is first of all kind of liquidity of the underlying. Whenever you're quoting options, you need to be able to hedge your delta somewhere. So one of the biggest things that all market makers kind of take into account whenever they quote these things is how liquid is the underlying. And whenever you realize like, okay, once you start quoting these top 500 altcoins, like first of all, the spreads there, you can definitely make a lot of money as a market maker on those just because the spreads are very wide. It's not a bit, it's a very, very opaque market. However, one of the biggest concerns you need to think about is first of all, wrong way risk in terms of what's the, is there any sort of information asymmetry? Whenever you start getting to these 250 500 market gap altcoins, like sometimes there's definitely the potential for an insider or a whale to want to be buying these calls right before it news release or something on those lines. That's something we definitely have to think about whenever we price those and quote those. Another thing that we kind of think about in the OTC, altcoin space is how deep is the liquidity of the underlying because that's how we kind of hedge the delta whenever we price these options for counter parties. So if a client comes in and they want to buy $5 million of top 100 altcoin call, we really need to think, okay, is this size going to impact the market? If the underlying altcoin only trades $1 million a day and we need to hedge $5 million of delta, that's probably going to be seen in the spreads. So that's one of the biggest things that we think about being an OTC altcoin kind of option market maker. That those are some of the things we think about. And I think that these protocols, such as AVO, they kind of have these top 25 altcoins, it's been applied voles. I think that that is a big deal. a step in the right direction towards bringing transparency to a very opaque market for sure. And I think the one that transparency comes in, once the volume starts to pick up, the thing about the options markets is it's so, it's so circular, it's very chicken and egg problem. You need liquidity, you need people to trade, you need volumes. Market makers aren't incentivized to provide liquidity if the volumes of the retail flow aren't coming in. So it's one of those circular things where hopefully it gets better and I think it definitely will. One of the biggest things I like to focus on is user interface and user experience. That's something that I think you guys are emphasizing at pair as well. And I think that that is one of the biggest ways to pull retail consumers away from some of the other competing protocols is who has the best user interface, who has the best user experience. The liquidity will come, it's very circular. So you need to get that, those initial retail trading volumes there first, market makers start to get incentivized in terms of providing liquidity, starts bringing more kind of retail traders, and then eventually start getting the institutions flowing in as well. Very interesting. And so AVO, which you mentioned, which is AEVO, that's the options platform launched by Ribbon, which will have a focus on a wider range of underlinings where you can buy calls and puts on the missile, correct? Yep, that is correct. Great, and one final question about your time at GSR then. Who are the primary participants, if you're allowed to say in the OTC option space, is it hedge funds, is it people hedging their flow, is it VCs, who's on the other side of those trades, typically? Yeah, being completely kind of a generic, I would say that it's definitely some of the VCs and projects, but it also goes to the nature and core of GSR. So we were a crypto native market maker first and spun out the OTC business as well. So just generally in terms of clients who kind of trade these VCs and projects, is it the same with the other companies as well, winter, mute, jump, things along those lines? I'm really interested. One, and the difference with AVO is it is being built in a decentralized manner, is that correct? That is correct, yes. Very interesting. So on the topic of volatility, we've seen Bitcoin and ETH volatility kind of fall off a cliff over the past few months. Even as the market is going down, volatility isn't really moving. Could you help our listeners kind of understand what dynamics are at play here with the gods to Bitcoin and ETH fall? Yeah, definitely. I mean, the month of May was just, it was so dire for anyone who has long volatility. One of the biggest things, and I was taking note of, a lot of institutions were also taking note of, is this large ETH calendar trade that kept going on where they were kind of selling the back months, buying the front months, things along those lines, really expressing a longer dated volatility in terms of the term structure. From my perspective, one of the things that's definitely been consistent over the past months that looks to be changing is the spot volatility correlation. So as spot was increasing, volatility was increasing as well. I think that that was one of the biggest kind of narratives going on during the January to March timeframe, maybe a little bit of April as well, until we started to kind of cool down. I think that once we kind of got out of the December doldrums of 20, 30 handle and Bitcoin volatility, and we started to pick up a little bit more momentum, I think a lot of people started to flow back in the market chasing that upside, they never really materialized. Well, depends on how you look at it. There's definitely a lot of upside the materialized from 16K to 30K, but kind of once we touch that 30K point, that's whenever a lot of stuff started to kind of die down from my perspective. There are a lot of different narrative trades going on as well between the each repella upgrade, the CPIs, the FOMC, things along those lines. So from an options trading perspective, and a little bit more into to pair as well, kind of focusing on those narrative based trades, a lot of the stuff that I would do as an options trader, focused a little bit more on the pair trade and the relative value between Bitcoin and E-faltility. But like you said recently, it has just been so dire. So one of the biggest things that I've kind of seen, and it's something that you highlighted as well as, right now as we're kind of fading the market, implied volatility isn't really picking up, and that's kind of just the nature of what implied volatility means. So whenever you kind of think about implied volatility from that perspective, it would seem to me that market participants don't think volatility's going to increase as we continue to slowly grind down. It's typical in what I would say would be range bound markets, which is literally what we've been in for, looking at trading to you now. We've been in this range for almost three months, this kind of 26K to 30K range, you've been in for around three months right now. So until we start picking up, back towards that 30K mark, or until I think we nuke below the kind of march highs, I think that volatility's going to continue to decline, not financial advice or anything, but that's just from my perspective. It's just so dire recently. - Yeah, and so one way to position yourself for that would be just to sell options. So selling call options or selling put options, which is a little bit more dangerous selling calls. Obviously, you can be long the underlying against it. Very kind of interesting. And if somebody wanted to be long Bitcoin volatility or eth volatility, what's one of the best ways to implement that trade? - Yeah, for me, so being a US user, I cannot really do it through darebit, but I would say that's probably, obviously, the number one. It is the most liquid venue you can kind of go, just like you said, if you want to be long, but if you want to be short volatility, you can sell options there, the collateralization and kind of institutional grade trading platform they have is definitely good for that in terms of capital efficiency. However, there are also kind of ways you can get around this and start playing around on DeFi. One of the biggest things about these DeFi options though is usually they're going to be a little bit more, they're going to have to be a little bit more collateralized whenever you're going short options. I've played around with a variety of protocols. None of them kind of get as open into this darebit, but if you were looking to be short volatility, that's definitely one of the ways you could do it using something like AVO or Lyra or some of these kind of DeFi options protocols. Yeah, that's one of the biggest things that comes to the top of my mind. I know that there are also a lot of DeFi primitives as well, such as squeath and things like those lines, but I haven't really experimented or played around with too much of that, mainly just the primarily on the option side. Very cool. And so you're saying now obviously not financial advice, but we're expecting this kind of range bound price action in Bitcoin and ETH despite all the strengths that we're seeing in equities. Is that taken you by surprise at all? Yeah, that is definitely taken me by surprise, I'd say. It seems like crypto has decoupled from the equities markets in the way that nobody wants where equities are kind of rallying and crypto is just sitting here in the range. Altcoins are nuking things on those lines. We had the CPI print today. Crypto is kind of barely moved. Equities decently green. One of the biggest things I've taken a look at as well is these AI stocks. And I used to trade in a video and AMD at ton back whenever I was in college and first getting into trading. I was a computer engineering major before I switched. So I had kind of understood the semiconductor stocks and how they're moving in things along those lines. And it is absolutely crazy to me that probably one of the biggest trades this year has just been long to video since January. It is, I feel like I wish I got into that one. He didn't have your Nvidia calls. No, no, I wish I did though. The earnings report was crazy. I remember that coming out and just seeing the gap up like 25% higher. And I was just thinking, wow, whoever bought these kind of like, you know, teeny out of the mud is there about 100 X and sure enough they did. - Wow, well, is that something you see continuing? This kind of strength in the graphic chip, like a space. - Yeah, that's, it's really tough. Navidias kind of hit that high consolidated recently. I think that one of the interesting ones now is people are looking at AMD's response. I think there's definitely some news. I haven't looked too much into it, but I've heard some news about AMD wanting to release something to kind of compete in that sector there in terms of the equities. And then kind of just, I mean, like you said, crypto markets are all about narratives, right? And I think that the biggest thing that's been popping in the kind of equities markets is, you know, definitely the AI narrative and things on those lines. And it's been really, really interesting to see the projects in crypto that have exposure to some sort of decentralized compute or artificial intelligence there, right? One of the biggest projects that I've been looking at is Render. And that was one that was kind of performing decently well with the AI narrative. Now there's a lot of different kind of trades that are going on. Like I said, there's the, you know, short centralized exchange tokens, long decentralized exchange tokens, a lot of different things that are going on kind of in the background of the market meltdown between Bitcoin and ETH. Now all these altcoins are starting to pop up. And there's a lot of interesting narrative based trades that you can kind of take on here. Are you betting on the layer one layer two? Or are you betting on layer ones against each other? Are you betting on layer two's? What layer ones do you want to focus on? Like whenever the SEC kind of went after coin base, he started releasing all these, okay, these tokens look like securities, things along those lines. Now there's an entire narrative of, okay, we'll be short the quote-on-quote security tokens and along some of the other tokens that have the same exposure. So there's a lot of different interesting pair trades that are kind of going on right now in crypto that, you know, I haven't really taken too much in part of, but super interesting stuff to be trading right now, I'd say from a per standpoint. Absolutely. And maybe we can get into some of those pair trading narratives after I just want to go back on AI first of all. So Nvidia has had this kind of huge rally on the back of the, kind of GPU requirements of chat GPT and then all the subsequent kind of products that have been built off that. They've seen this huge demand for their, for their processes and for their chips and cards. Is there anybody building at the intersection of AI and crypto? You briefly may, and render that's kind of really got your attention. And could you help our listeners maybe understand a bit better about what the narrative is there? - Yeah, I haven't really done too much research into kind of the intersection between AI and crypto. I know that there's definitely, that's actually one of the biggest things I know VCs are trying to look at just because it's literally just two big narratives. You have the crypto narrative and you have the AI, so there are a lot of kind of VCs who are interested in kind of trying to find that intersection. But for me, the biggest one that stood out was renderers specifically because it's kind of like a decentralized compute type project from what I've kind of gathered. And like you said, the reason kind of NVIDIA has had such a rapid expansion in terms of its price is specifically after the earnings report was released, NVIDIA had forecasted next quarter's revenue to be significantly higher than all the analysts on the street were predicting. I mean, they were kind of pointing that back to, as you say, the GPU requirements of kind of chat GT and these AI. So from my perspective, render was the biggest one to stuck out to me and haven't really done too much research on kind of the other intersections between AI and crypto. Fair enough. Well, definitely something to keep an eye out on and this idea, I think there was a thesis written by multi-coin which I encourage anybody to go out and read all about their thesis at the intersection of AI and crypto and how decentralized computers is pretty much the only thing they really see at the moment. But there's a lot of interesting stuff. Potentially to make as well. So for founders, I encourage you to go down that rabbit hole a little bit. Speaking of rabbit holes, so pair of trading is like you said, narrative trading. What are some of the narratives that you're kind of looking at at the moment? So you mentioned decks versus sex. Could you give an idea of maybe what that could look like in practice? Yeah. So I guess one of the biggest ones that, one of the biggest ones you could put on is, I would say, short B&B and then long something like dy/dx or GMX. I'd say that those two are probably some of the bigger ones. They have deep liquidity. That's kind of taking up. It also is kind of betting not only against decentralized exchanges, but it's also betting on the narrative that's playing out with the US regulatory landscape in terms of that attack on Binance. So from a pair trade perspective, I think that the short B&B long GMX or dy/dx is definitely a trade that could have been put on. I would say that that's probably the biggest kind of sex versus decks. I mean, there's also the uniswap that you could put in there as well as well as a couple of other protocols, but that's the biggest one that would stick out to me. I know, you know, FTT and all that stuff is in there, but not too sure on that one. B&B is the one that sticks out the most to me. Very speculative. And how about do you have any thoughts on like layer ones or layer twos and one out performing the other? Yeah. So that's one of the other things. I think I've done a little bit of reading into it. So, you know, don't quote me here, but I'm pretty sure like on the coin base or one of these where the SEC was saying, okay, these are securities. These are not securities. Things along those lines. I'm pretty sure, maybe I'm wrong. I'm pretty sure Solana was on there at some point in terms of being deemed a security. Yes, but not sure there. If it was though, one of the biggest things for me right there would have been long-eath short Solana. And it's funny because I used to be very, very, very bullish on Solana. Like every trading firm was backing it. Everyone was involved in Solana at such a good kind of product market fit in terms of pitching to the trading firms and kind of bringing people on board there. But Solana has definitely been one of the hardest hit cryptos over the past couple of days. I'd say I'm just looking at June 10th. It was down 10% day before that. It was down 8%. Looking at E if it's like not even it's not really close. So from a pair trade perspective there, layer one betting, I'd be kind of long-eath short Solana if you wanted to bet on that narrative. Makes total sense. And how about the flipping Eath versus BTC? Where do you sit on that one? Yeah, yeah. I think that I'm actually very bullish on Eath over Bitcoin just because of how we saw the options markets grow and expand in the first quarter of the year. From my perspective, it started to look like institutions were interested in getting their exposure to crypto through Eath as well. It was just a little bit more of a volatile asset, but also had kind of these narratives behind it in terms of Eath's Shepalla and some other kind of strong narratives I thought that could definitely push Eath above Bitcoin in the late end. Not maybe not the near future, but ideally in the future. For me, Bitcoin has always been kind of that digital gold narrative, macro trade. For me, Eath has been a little bit more focused on betting on the technology of crypto in terms of betting on these specific applications and betting on kind of an ecosystem. I like to take that bet a little bit more just because I kind of fully believe in crypto. I fully believe in the technology. I love what it wants to do and what it wants to accomplish. So for me, I'd rather take the bet on getting exposure to that technology through something like a layer one decentralized like application platform than just taking the bet on Bitcoin as a macro asset from that perspective. So you weren't dancing on stage up Bitcoin Miami this year? No, no, no, I was not. I actually went to Eath Denver. I went to that one and I was really bullish on what I was seeing there. I saw a lot of builders who are, you know, I mean, if you're still building in the, in kind of this bear market, like props to you, that's the kind of people that I want to work with down the line in the future. Just because the price isn't there, it doesn't mean the technology isn't there. The technology still exists and what people want to accomplish in crypto is still there. So everyone who is still building right now props to you, these are the kind of builders that I want to see succeed in the next couple of years. That's amazing. Very, very well said. And one of the things I like about you, Chris, is not only do you have that technical understanding of the crypto markets and the blockchain technology, but you've worked on the market making side and you have like an institutional lens on how it all works. But at the same time, you're just passionate about the, about defiant and defiant use cases so much so that you've become an ambassador for vertex protocol. Now I have to admit, my attention span is quite short these days. So I haven't read up fully about vertex. So could you do E-Life 5 on vertex and why you chose to work with them? Yeah. One of the biggest things for me, vertex protocol, it's a decentralized exchange, all in one, you can trade, earn, borrow, they have integrated money markets. One of the biggest things for me in terms of why I kind of wanted to work with vertex is just, first of all, I kind of know in the backgrounds of the founders. It's so funny. I was literally, so back whenever I was a graduate at, or my last year at Georgia Tech, I was playing around on Discord, right? You see, you meet everyone in crypto, Discord or Telegram. And I was on Discord and I was in a quantitative trading, like recruiting Discord. And I actually met the co-founder and I think lead developer on that kind of protocol in Discord. We had just been messing around pinging and then six or seven months later, I end up at GSR and I find out that GSR is kind of working with them, a bunch of other market makers are working with them, a lot of people are investing in them, a lot of the big trading firms have invested in them. And I thought, wow, this is one of the crazy moments in crypto where it's just such a small world. So one of the biggest reasons in terms of why I want to get involved with vertex is just I knew the backgrounds of the founders, I met them in person. And then second of all, they're doing a lot of things on the decentralized exchange space that kind of focus a lot on the user experience, the user interface. Like I said, that is probably one to be the number one way that you attract customers from competing exchanges is just by having a better experience. I think recently they released kind of like one click trading where you only have to sign a transaction once instead of having to sign all these different transactions. That's something that just makes the user experience so much better. Like I said, you know, like I said multiple times, user experience, user interface, the easier it is for me to interact with your protocol and the easier it is for me to use it, the more likely I'm going to use it. So that's one of the biggest things that kind of drove me to vertex is the focus on user experience, user interface, I knew the founders, they have such strong and solid backing from a lot of the traditional kind of trading firms as well as some of the crypto native market makers. I think that's definitely going to be a protocol that's going to be very nice to interact with in the future. And I also think it's going to be one of the leading kind of dexes in the future as well. The volumes have gotten crazy now. I think they've traded over a billion dollars of volume and that's the shift from centralized exchanges to decentralized exchanges. Like I said, the only protocols that I want to work with are protocols that I truly believe in. And I think that that kind of hits it, right? Seeing the migration from centralized exchanges to decentralized exchanges and that's one of the biggest narratives that I kind of want to be behind as well. It just feels like I'm supporting the ethos of cryptocurrency as well. Absolutely. And I think that's where we need to get to if we're going to really grow decentralized trading because right now the experience of trading on finance or even OKX or somewhere like that is still a 10x improvement compared to trading on chain. I know that there's a lot of work being done by teams like dy dx to be able to move that kind of order book trading model. It still feels like we're a little way away and my own personal experience of working with our dev team to build pair protocols such that it's a hard problem to solve. I think in crypto, it's very tempting to just fork the latest product, whether it's a fork of Ubuntu or a fork of GMX. It's actually like step outside of the box and build something new with brand new code. There's a huge opportunity because for the first time in a long time, after the fall out of FTX, after all the news and rumors around finance, the kind of global trading environment is up for grabs. And if you can be innovative in this space as a founder, whether that's a centralized exchange or a decentralized exchange, I think there's a once in a lifetime opportunity to really become the number one leader in five years time from now. So looks like vertex are doing some of the right things where certainly aiming to be the top protocol on Arbitrum, at least for narrative trading. And I didn't come into any other founder who's kind of building at the periphery of DeFi to really have a look at trading volumes because they're still somewhat robust. But we need smart talent to actually come in and build on these things, not just kind of launch token of walk away, which unfortunately the space has been somewhat marred by in recent times. So outside of that, what's your, what's your kind of market view going into the summer then? So you said that way, we should be a bit range bound on Bitcoin and East. Does that mean this is a period of time to accumulate? Should we be looking at buying upside call options for next year? Is it a sitting cash and wait for panic? What's your kind of personal approach to the markets? Yeah. Honestly, from my perspective right now, having been through a couple of these summers as well, like the trading volumes in the summer really start to dry up. Right now, the biggest thing for me in terms of why volatility has kind of been fading the past month is, what's the catalyst? Right? Like what's the catalyst for further upside right now? That's that's something that I've definitely taken note of. And something that I'm is usually at the forefront of my mind is, okay, whenever before I put on a trade, especially if I'm doing something with options, right? I'm thinking, okay, what will be the catalyst? Because with options, whenever you're kind of just directly long options, you kind of, you need something to happen. You didn't apply volatility to increase, you needed directional move to happen. And for me, you know, focusing a lot on the retail trading, usually I'm just long options. I'm not doing anything crazy. I'm not going short. I'm not putting on butterflies or anything like that. I'm usually just long options from a retail perspective. So for me right now, I don't see a scenario where I would be comfortable just being long options. And that's usually the trade I like to take. So from my perspective, I think that you're right. I think this is kind of just like a maybe, sit on cash and wafer panic. Or I think that this is kind of just, you know, time to just accumulate spot if you're interested in kind of picking some up below the range. I think that there will definitely be catalysts in the future. 2024 election. There's kind of the FOMCs and the CPIs that kind of come out, but as we've seen today, like CPI didn't really do too much for the crypto markets. It looks pretty bullish for equities, but crypto is in that sort of, I guess, decoupled phase where now some of the macro backdrops that impact the equities markets aren't really hitting the crypto markets as packed fully as I like to see. So from my perspective, I think that Bitcoin and ETH, I think volatility is going to continue to compress unless we completely blow out of this range towards the downside or the upside. I think that a slow market that's kind of just, you know, in this range and steadily falling, it's definitely going to lead to decrease in implied volatility. So I don't really want to be long options here. And then I guess from, for me, like if I was going to be doing any sort of trading at all, it would probably be using perps honestly. It'd just be kind of like leverage-based trades, looking for a directional move. And I'd probably say that the biggest thing that you should be aware of in these range-bound markets are how quickly the direction and the sentiment can kind of flip. I mean, I'm looking at the charts right now. I'm looking at Monday, June 5th, down 5%, I'm looking at Tuesday, June 6th, up 6%. Like in these kind of range-bound markets, there are definitely periods where you need to be quick to open trades and quick to close trades because when the market is no longer trending and we're just flipping in between a range, like that's your opportunity to be getting in and out of trades quickly. I think that that's one of the biggest things. Whenever you start thinking, okay, are we in a range-bound market or are we in a more momentum-driven market, that's something that I also think about before I put on any sort of trading strategy as well. I think there's a real nugget of wisdom in what you just said, Chris, which is a lot of people are quick to put on a trade and often with leverage, but not so quick to cut it or take profit. I think recently, I've been doing pretty well on my personal portfolio, but my average holding for any trade is about 12 hours, which you're right. When you're trading options, it's too short a timeframe to be paying those kind of spreads to get in and out of a trade, but on perps, you can do that as long as you're willing to take profit. What also kind of helps me a little bit on the trading side of things is I go to bed around the time of the UTC open, so daily market open, which is around midnight 1 o'clock by side. I like to just square off risk and go to bed because what I've realized is one of the things that really has a detrimental impact on my trading is too much screen time. If I'm on trading view or I check it first thing in the morning or last thing at night, the best thing often for me to do is if I'm in profit, take it, go for a walk, get a good night's sleep, whatever it might be, and come back a fresh with the fresh pair of eyes. It's amazing how your biases don't creep in as easily, so you can be long one day. I was long XRP all day today and then just quickly cut it and turn short the market and it's worked out. So big advice from my side there, even though we are getting your advice as a trader more generally with regards to the market. Any tips you could share as an institutional trader for audience, so not necessarily mentioning tokens or projects, but just things that have helped you on your trading journey, which you wish you'd known maybe a few years ago. Yeah. I guess from the institutional trading perspective, it is exactly what you said in terms of the best traders in this industry are ones who kind of get in and get out of trades. They understand their strengths. One of the biggest things that I think Greg Maggedini from Amber Data said this whenever I was reading one of his things is know your strengths and weaknesses and know the type of trader that you are. What that means is maybe you are just biased to be a better long volatility trader than you are to be a short volatility trader. And what does that mean? From my perspective, it's all psychology at all personality. Are you the type of person who can stomach seeing a you know, a decent size drawdown, but you're also the person who will hold it to a 100 X or are you the type of trader who gets in, gets out with quick profit, the quick to cut their losses, quick grab their profit. They're never going to hold on to 100 X, but they're never going to lose 50%. One of the biggest things for me on the institutional trading side is starting to try and think about what kind of a trader I am. And for me, it's kind of a little bit of both. I've started to get a lot more comfortable because I've started to think a lot like you're saying in terms of okay, quick to get in and out of trades, square off risk, keep your stress low because it keeps you unbiased whenever you start going into the markets. So from my perspective, a tip of advice I can give to anyone is kind of understand your personality and figure out what trading style works to thus for you because if you are naturally biased to cut your winners quick, then maybe being long a lot of optionality on the the tail side and waiting for these kind of 5 to 10% moves that are going to end in a 100 X. Maybe that's not you because you're probably going to sell it before it hits the 100 X. And if you trade like that, you're waiting for that 100 X to overcome all the losses that you kind of take as well. So from my perspective, it's really understand what kind of a trader you are. There are people who kind of I'd say be both, but it really depends on also the type of way you're trading. Are you a nerd-abased trader? Are you trading events? Are you trading more of a longer-term time frame? Are you trading a shorter-term time frame? Are you specifically focusing on a directional move? Are you focusing on volatility? There's a lot of different things. That's why I love options so much is because whenever you're trading options, there's a variety of different ways that you can kind of profit in the markets. And I think that that kind of Swiss army knife type of product to be trading definitely gives me a little bit more clarity in terms of myself as a trader. I can focus on collecting data. I can, you know, sell some high implied volatility. I can maybe long some options and focus on a directional move. So many different things to kind of focus on there. So from my perspective as an institutional trader, just figure out what kind of trading style fit your personality. And then I guess a tip as well. I'll just throw this in there. Is from the institutional side, one of the things that one of the metrics that I kind of look at recently is the dealer gamma exposure. It's a chart that's on amber data as well. And what that chart kind of shows is it's speculated dealer positioning. And one of the things to take away from that is if you understand the sophisticated, the positioning of these sophisticated institutions who are most likely delta hedging all their options exposure. Maybe you kind of glean some insight in terms of when they might be buying a lot of spot selling a lot of spot things along those lines. There's a couple threads on Twitter about it. But gamma exposure is one of the interesting ones for me in crypto. It's always, it goes both ways in crypto. There are a lot of people who says it means nothing. A lot of people who says it's really interesting. But from my perspective, the reason I think it actually does mean something is because spot liquidity right now in crypto is so scarce. And it's seeing a dealer having to hedge $10 million of delta and Bitcoin. Like that can push the price. You know, I have one, two percent. I don't know. But also understanding the market microstructure of crypto as well. Those one two percent moves might trigger a liquidation of the perpetuals markets that's millions of dollars of notional wide as well, which then can drive the spot markets reaction as well. So from my perspective, since the cryptocurrency markets are so reactive and spot liquidity is so tight, gamma exposure, if you can kind of isolate it to dealers and figure out where they're hedging. For me, for me, it does kind of mean something. I love that. That's a real kind of piece of our first. So you said, things like ambidata, a great way of finding that data on when a doing desk, when a trading desk might need to sell a whole bunch of Bitcoin or buy a bunch of Bitcoin to offset the options [BLANK_AUDIO] that they've bought or sold on behalf of their clients, and that can be something which you could maybe even frontrun because you know that they need to do those, be adjustments to their portfolio as young, which has liquidation cascade. Very, very good advice. And again, only stuff which you'd really learn if you were speaking to somebody who's been a trader at one of the big market makers. So thank you for that. Chris, we're going to wrap it up here. And typically at the end of each episode, I asked some short fire questions. You've already kind of addressed the first one, which was Bitcoin or ETH. So clearly you're a Bitcoin Maxi and I don't need to ask you that one. But I will go through the other ones with you if you could just give me your like quick fire answer. You ready for those? Yep. Amazing. So you get to have dinner with anybody. Would it be Vitalik or CZ? Dallet. And what is your best ever trade that you've done? That was back. Whenever I was trading equities, there's back in COVID. It was, I think it was a, it was a 150X. So I bought $200 worth of out of the money call options on HYG, which was a high yield bond ETF right before it was a weekly out of the money option. And it was right before BlackRock announced that the government was going to give them money to start buying HYG. And that was, I think one of the largest single day up moves in HYG is high yield bonds. It doesn't really move. It was one of the largest single day up moves. Those options went from one cent to three dollars to 150 to 300 X. And I went from 200 to 30K. So good trade, good trade. Peace for lunch. And so the flip side of that then what's the worst trade that you've ever done? Worst trade, it was over trading the future markets. So it's exactly, it kind of goes exactly into what you were saying is the more screen time does not always mean better. And sometimes the best trade is no trade. So back, I think it was also during COVID. I had made a decent bit of money from that. It made a decent bit of money from some Tesla calls. And I just started trading the futures markets. And I just started to like, I started with Flash Panic. I'm pretty sure I lost the money that I made from from that one trade. But I made a decent bit enough that it didn't lose my entire bank role. But I definitely lost all of that money from the HYG trade over trading the futures markets. Very, very easily done. I think sometimes the best thing to do after a big win is close your account for a week or two. Yeah, exactly. Overconfidence and ego creeps in. It's happened to me multiple times in my life. GMX or dy DX for on-chain trading. Though I've primarily used dy DX because that's the first one that I kind of traded on. And like I said, from my perspective, a lot of people aren't really going to switch unless the technology is significantly better, the fee structure is significantly better. Maybe that is now. I usually do a lot of my trading on centralized exchanges anyways. But dy DX was one of the first decentralized exchanges I used with an order book model. So that's what I'd have to say. Perfect. And given that we're going to be in a relatively low volatility summer that your stable coins do put them in tether or circle. I actually hold both right now in my meta-mask. I have both of them. But I get paid a lot in USDC whenever I do some of these side things. So I put them in USDC, I guess. USDC. Cool. I think that wraps up all our short fire questions other than one final one for you, which is what's the best way to follow you, Chris, to follow your insights and your thoughts on the market? Yeah. You can follow me on Twitter. I'm @cryptodefigye. I do a lot of retweeting of really interesting things. I try to keep it. I like some memes, but the stuff I retweet, I try to keep as insightful as possible, and then I'll also post a lot of the options marketing sites on there as well. Amazing. Well, I will make sure to put that in the show notes. But for today, thank you for joining the Crypto Narrative Podcast, Chris. Awesome. Thanks, Af. Thank you so much. The Crypto Narratives Podcast hosts conversations with thought leaders in the blockchain industry. Nothing in this episode can be constituted as financial advice, nor a solicitation to invest in any of the protocols and tokens mentioned. For more details, please visit the pair protocol discord.