Crypto-world: Putting the hedge back in hedge fund
Over the last few years I’ve seen much of the very promising global macro trading talent jump ship and head to the dark side- cryptoworld! The reasons are plentiful; volatility, uncertainty, arbitrage, excitement etc. All the stuff we used to love in the currency markets 30 years ago. Even the market lull of the last 6 months hasn’t stopped this drain of talent. We are seeing all of the big banks and investment firms investing in crypto-trading teams and traders will always tend to gravitate towards where the money and excitement is.
In addition, the necessity for a market hedge has become less relevant, or at least less rewarding, over the past two decades. Now we see cash-rich investors worrying that their cash becomes less relevant and they start looking for hedges in the next great disruptor field, digital currencies. The big challenge is of course to find traders who actually know what they are doing in a market that is still so new to everyone.
But there exists an even bigger problem that the financial community hasn’t quite gotten to grips with yet. The people who truly understand the digital space, the young twenty-something technologists and evangelists, distrust the traditional banking world with a passion that probably isn’t misplaced. The world’s financial markets have always operated on the assumption that everything has a price; in the case of the oft-maligned post-millennial generation, this assumption may be seriously challenged.