177: Sam Bankman-Fried – Leaving Wall Street, Entering Crypto Chaos

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Chat for more information. Tasty Trade Inc. is a registered broker dealer and member of FINRA, NFA, and SIPC. This is the first one. Podcast. Hey, what's up? Aaron Firefield here. This is episode 177. And I'd like to introduce to you a special guest of mine, Sam Bankman Fried.

Sam's trading skill originated from three years at Jane Street, a proprietary trading firm renowned for being one of the largest ETF liquidity providers in the world, and also renowned for their secrecy. In late 2017, Sam relocated to Hong Kong and began his foray into the cryptocurrency market when he co-founded Alameda Research. Alameda trade a range of quantitative strategies such as statistical arbitrage and market making, which are mostly automated but have a layer of human intervention.

In less than two years, Alameda has grown to a point where each day it does approximately one billion dollars of turnover and accounts for somewhere near five percent of global crypto volume. Sam and I got to discuss many aspects of how Alameda operate and how his team have found lucrative opportunity amongst a chaotic environment.

The sound quality on this episode, it isn't perfect, so I do apologize for this. We did the best with what we had, and I'm sure once you get a couple minutes in, your ears will quickly adapt. Anyway, now on with the show. Let's get it going. Here is Sam for episode 177.

I gotta say, I really enjoyed that video you posted uh the other day. I think James, who is probably there somewhere close by, uh filmed that. That was really cool. Um that was nice. That was cool that you guys sort of shared that. I feel as though you don't really get insight like that very often. You know, like most trading professional market makers or like trading desks don't normally share that sort of stuff.

Yeah, yeah, it's pretty rare. I think that a lot it's'cause of, you know, IP sensitivity. People don't want sort of their trading secrets leaking out. And so, you know, it's just generally a a pretty secretive culture. Yeah. And I mean I you didn't necessarily give away anything secretive, like there wasn't really uh much to hide there, but it was just it was just cool to kind of see you trading around a sort of a pretty interesting event like that.

Thanks. Uh yeah, it was it's an exciting time. I mean, you know, I I think it's definitely the most exciting parts of the job are when when trading gets busy. So Yeah,'cause there's certainly a lot of times where it's where it's boring. Well, maybe not quite so many times in crypto. Yep. Yeah. So anyway, that was good. Um, now you as a trader, you your trading uh your training ground was uh at Jane Street, right? Yep, that's right. What was that experience like?

It was really nice. Uh I I think I I had a great time there. They're, you know, very good to me. Uh I guess, you know, I was uh in college at MIT, sort of didn't know what to do with my life. And I had some friends who had interned at Chain Street, so decided I tried out and and I liked it. So I I went back full time.

after I graduated. It it was a really nice environment and I learned a lot there. There was, you know, obviously at the beginning, a lot of uh just sort of learning the ropes, talking to other people. um, you know, learning how they thought about trading and then slowly, you know, expanding the amount of trading that I was doing, starting off with just, you know, a pretty simple uh

case and then you know eventually growing into uh you know more and more products that I was you know first helping out with and then in in charge of trading. Um and but you know you even you know, even the long versa, you know, there's still a lot of communication with the other traders. It wasn't like I sort of siloed off with my section of the universe, uh, or or anything like that. It's a a very

collaborative and uh communicative environment. And what products were you trading there? I take it it wasn't anything crypto related? No, it was not. It was international ETF. Um so I was training US listed ETFs that uh were sort of composed of non-US equity. What does that mean? S say that again, sorry? Yeah. Yeah, so uh so I guess you know we can kind of sort of start at the beginning, which is what is an ETF? So you know an ETF, an exchange traded fund.

It's basically a mutual fund that also trades on an exchange like a stock itself. And so uh you know if you buy a share of an ETF, what you're doing is you're buying a share of a company that has just bought shares of a lot of other companies. So, you know, sort of the the most standard ETF is the uh is called SPY, the S P 500 ETF. And what it does is it just owns a little bit of each of the top 500 companies in America by uh by market capital.

And so if you buy, you know, a hundred shares of spy, you're buying, you know, a little bit of Apple, a little bit of Google, uh, you know, a little bit of Exxon, you know, et cetera. Um, so that's what an ETF is and and uh You know, ETFs have sort of two different properties. The first is that, well, you can trade them on the market like a stock themselves. So if you want to buy a little bit of everything, you could buy 500 different stocks.

Or you could just buy some shares of SPY and you're sort of synthetically getting exposure to the top 500 companies. Um and it also has a s uh primary market mechanism called uh creations and redemptions. where basically you can actually just go to the spy company um and and say, hey, I I'd like to deliver, you know, the 500 stocks and they'll give you back some spy. Or you could give them your spy and they'll give you back the stocks that I do. So that's what an ETF is.

I was trading um US listed ETFs, so ETFs that traded on the New York Stock Exchange. But where the companies that they owned, rather than being Apple and Exxon, you know, they owned, you know, a Taiwan semiconductor uh company or you know Toyota um or uh you know Barclay. So they were US listed funds that traded on exchange, but that owned foreign stocks themselves. Uh okay. I'll move you. Interesting. And how long were you there for? Uh I was there for about three years.

Okay. And whereabouts? That was in the US somewhere. Yep. That that was in New York. Uh so it's working on Wall Street there. uh in their uh flagship office. Okay. And so when did uh Alameda come about? And I am pronouncing that right, yeah? Yep. Yep, Alameda. So I

Alameda came about in late 2017. I left Jane Street. Uh and I I I liked it a lot there and and don't have, you know, any gripes at all. Um, but uh I don't know, I guess felt like there were a lot of things I wanted to try doing in the world and uh And So I I left and uh shortly thereafter uh started exploring crypto and uh you know it looked kind of crazy. You know, you you look at US stock markets and you're used to saying, Well, the things like

Maybe trading at at the wrong price by a hundredth of a percent. Like that's pretty weird. Uh and then you get to crypto and everything's multiplied by fifty. It's like, oh, this thing, you know, it's within a percent. Uh and uh and so it's just like wildly more volatile and dislocated than sort of US stock markets were. And it seemed like, you know, one of two things were true. Either all this data was fake.

and nothing was going on here. It's just like, you know, the sergeant is is just some some mirage. Or it was an extremely exciting opportunity. Uh and you know, sort of started diving into it and it it quickly became clear that yeah, about half the data was fake. Uh but the other half was real and in fact there were some very exciting opportunities there. And and and in particular there's a lot of customer demand for crypto and just not a lot of liquidity being provided to it. And that was

you know, dislocating a lot of the coins on a lot of the platforms and causing a lot of uh sort of arbitrage opportunities. So up until this point you hadn't really had any exposure to crypto? That's right. I I think I could have maybe explained roughly what a bitcoin was and that that's about it. Man, that's pretty crazy. That's uh That's a that's a pretty bold move on your part to leave Jane Street and then sort of decide that, Hey, I'm gonna start a you know, a crypto trading firm.

Yeah, and it's definitely sort of a pretty you know, taking a leap of faith there and and a pretty exploratory move. Um, I don't know, I it seemed exciting. It seemed like, man, this could be really awesome. This this could be just be an unbelievably good opportunity, or there could just be nothing there.

And and you know, if there's nothing there, that's okay. You know, I've wasted a few months of my life, but I gave it I gave it a shot. And, you know, on the other hand, maybe this is like just a spectacular opportunity. And so it seemed like, you know, even though I was Pretty uncertain. It it seemed like uh like just the rescore on trade off was pretty good. Exactly, yeah. I mean it kinda seemed as though you were you were almost looking for a new challenge.

Yeah. So who did you start Alameda with? Like how did you get together the team?

Yeah, so I uh I guess I had a uh college uh friend who was bored as hell at Google um as a as a software developer. Uh who I I sort of worked on some projects with and lived with um back at MIT and uh sorry called him off Uh and he flew over to uh to our fledgling three-bedroom apartment slash office.

um and uh you know started writing the code. Um and then I had, you know, basically friends of mine from uh, you know, various parts of my life and then eventually friends of, you know, the friends of mine that we'd hired. And we sort of just grew out uh organically like that. Okay. And did any of these other people who you brought on what was their kind of knowledge of this market like?

Basically no one had any crypto knowledge. Um, I mean, there were, you know, where'd they come from? Basically, you know, software developers from Google and Facebook. Um And then quantitative traders from Wall Street who had never touched crypto before. And then uh some some friends of mine on the operational side as well. Um but uh but none of us had had uh traded crypto before this. Okay. Fair enough.

Now a lot of people who are gonna hear this podcast, you know, the audience of Chat With Traders Obviously some of them are very active in crypto, but a lot of them aren't. And those who aren't are not going to be familiar with alameder research. So, you know, just in a nutshell before we kind of get into the nitty gritty. How would you describe Alameda? Like what type of firm are you?

Yeah, so we're a quantitative uh cryptocurrency trading firm. Uh we basically do, you know, a combination of arbitrage based trading, sort of quantitative signals and modeling. liquidity, priding, and OTC trading uh across basically all of the major cryptocurrencies and cryptocurrency exchanges.

And so, you know, sort of the most basic thing you could imagine us doing is, well, and on Coinbase, someone's willing to buy a Bitcoin for, you know,$13,000 and on Bitstamp, someone's selling it for$12,900. So you go to Bitstamp, we buy the Bitcoin, we send it to Coinbase, we sell it, and we've made a hundred bucks.

And you know, that's sort of the, you know, the simplest arbitrage you can have in crypto. And two years ago, there's just a lot of that. There's a lot of really simple, large arbitrages. Um over the course of the last two years, things have become a lot more competitive, a lot more efficient.

And the trades that we're doing are are more complex now. And so you can imagine, you know, trades that involve multiple different exchanges at once, multiple different products all against each other, uh derivatives as well, and trying to understand the relationship between a future and the underlying. Um, you can think about the various fiat currencies that are involved in crypto and You know, you might think, Oh well I can price Bitcoin against Japanese yen, she's multiply

Bitcoin, Japanese dollar by, you know, the F or you know, the FX exchange rate. But in crypto, nothing's what it seems. And a lot of these fiat currencies are only really sort of fiat currencies. And you look at, you know, the the kimchi premium, which is the, you know, Korean bitcoins trading at you know as high as a fifty percent premium to the rest of the world. How can that happen?

Well, the reason is yeah, it was only sort of against Korean wand. It was against this thing called Korean One, but you couldn't actually like take it out of the cryptocurrency exchange and buy dollars with it and get those out of the country. Like you you might have wanted to. And uh, you know, the Korean wand is itself sort of a restricted currency.

Um and then you can look at uh, you know, a lot of stable coins, which there's sorta US dollars, but sort of not, and maybe it's not free to turn them into US dollars. And and so, you know, there's a lot of things in crypto where you can kind of see arbitrage as

a significant piece of how you think about them, but they're not it's not just a Bitcoin or just a dollar. It it's something a little bit more complicated and nuanced than that. And you know, over time our trading has has started to expand it to like more and more nuanced trades um as sort of the most obvious ones have gone away.

Okay. So just kind of reading between the lines and going off some of the comments you've made there, it sounds like when you first viewed the crypto market, you saw that there were a lot of arbitrage opportunities to be had there. What were some of the greatest difficulties or, you know, the challenges that you came across uh maybe some unexpected issues once you actually started to dig a little deeper and you started to really get into things.

Yeah, it was super interesting because you know you look at these whatever Coinbase versus Bitstamp arbitrage and you're like, look, I I don't need like to know machine learning to do this. Literally I'm just buying a Bitcoin for twelve nine hundred and selling it for thirteen thousand and and I just made a hundred bucks. And so you you can ask, well how can that be? Like if it's that easy and anyone can see it, why is it still there? And the reason is

Well, a lot of the reason is sort of the infrastructure. You know, there's a lot of things you take for granted when you're trading US equity. If you buy a share of Apple on the New York Stock Exchange and you sell it on NASDAQ at a higher price, you just made money and and you're done. You've successfully completed your trade. And you sell it on Coinbase, well, okay.

You actually didn't have a bitcoin on Coinbase. You had one on BitSamp. So how are you selling on Coinbase? Well, I guess first you got to send the Bitcoin from BitSamp to Coinbase. What if you can't withdraw from BitStamp? What if you can only get$100 a day out of the exchange? And you start running into things like withdrawal.

where, you know, on a lot of exchanges it's actually very difficult to do a large trade because you'll just get your money stuck. They'll like severely rate limit how quickly you can withdraw any of your funds from the exchange.

And so that can make it quite difficult to do one of these. You know, what else happens? Well, you know, as I said, let's say that uh, you know, there's a Bitcoin trading in some stable coin somewhere. So a stable coin, it's a token that theoretically represents a dollar.

Um, but the key there is that theoretically, what makes it a dollar? Well, the only thing that would really make it a dollar is if you could just like hand someone the token, get back a dollar. And you could hand someone a dollar and get back the token.

But for a lot of stable coins, the way that you actually create these stable coins, maybe it's expensive. Maybe you have to pay a percent in order to create them. Maybe you have to pay 3% to redeem, or maybe you can't redeem. Maybe they just don't allow it.

And now you're like, I don't know, like I can buy a Bitcoin for$12,900 and then I can sell it for 13,000 stable coins. Is that good? Is that an arbitrage? Well, it really depends on what you're gonna do with those stable coins. Do you have a way to turn those into dollars? Do you have the right? account on the right platform to do it? Are you going to run into limits? Even if you can do it, they're going to send a wire transfer to your bank. Will your bank shut your account down?

Uh it turns out that if you go to Bank of America and you're like, Hey, you know, we're we're a bunch of uh, you know Twenty year olds, you got this cryptocurrency trading startup. Like to send like lots of wire transfers through a lot of international businesses. And yes, this is this is Bitcoin trading to be clear. They're gonna be like, No, that's you're like the worst client that we've like there's just no way, right? Like

Imagine the the anti-money laundering know your customer risk for them there. They're like, so we can't track anything you're doing, right? Like not only can we not track it, it's not even happening on US platforms. And so now you're like, well, okay, I thought I had this arbitrage, but now my bank account got shut down because I tried to do the arbitrage. And you kind of keep layering things like this on top of each other. And what you realize is that really the devil's in the details here.

And that even a simple looking arbitrage can become quite complex operationally. And what you have to do is you have to have great Accounts on the exchanges, you have to understand exactly what you can and can't do. how much you can get in and out. You have to understand the time that it takes to move a coin around the blockchain. You have to have a bank account that's willing to work with you and work with the platforms that you need to use. You have to have the capital to do these trades.

Um, you have to figure out how are you hedging any positions that you're putting up there in a realm where you can't short sell on most venues. Um, and you have to take into account, you know, risk associated with, you know, hacks in crypto. Um, and you know, these things they just keep piling on and on and on. And at the end, what you realize is actually there's just an enormous operational endeavor. involved in really understanding all of the different platforms and products in crypto and that

A lot of the trades that look really easy, they're not really there. I mean, they're there, but you don't make money doing them because you realize you're paying a percent of fees somewhere in this chain. Is that part of the reason why you've set up shop in Hong Kong? As opposed to the US.

It's a good question. And we're a global firm. We're, you know, we attempt to be active on all of the major platforms. You know, we're trading on thirty plus platforms, trading a billion dollars a day and trading a bunch of different coins. And in order to be able to do that, you have to be able to access from a lot of different jurisdictions, right? You need to be able to access.

the US exchanges, the Chinese exchanges, the Japanese exchanges, Korean exchanges, the uh Caribbean exchanges, European exchanges. Um and you know, all of a sudden it's like, well, you know, some countries just say, yeah, whatever, anyone can trade on this, but others are like, no, you need a real setup.

Um, and so one thing that we had to put a lot of work into was developing, you know, kind of a global corporate structure where we have entities in a lot of different jurisdictions. We have bank accounts in a lot of different countries. We have employees in in different countries. And uh and sort of over time our our business just became more and more global. And uh and it became clear that we needed serious operations in a lot of different places.

So that was one thing that was happening. And then the other thing is that over time we've become increasingly client-facing. Um at the beginning, we were just a proprietary trading firm. We never talked to anyone from the outside. Um, but we now have an OTC desk where customers can come and trade against us twenty-four-seven. Uh we also recently launched a derivatives exchange.

In crypto. And both for both of those, you know, customer relations matter. And at this point, where is most of crypto happening? It's not in the States, it's in Asia.

And so it also kind of became clear that, you know, if we really want to have relationships with our customers, um, you know, the place to be was, well, at least somewhere in Asia. And and then why why Hong Kong? Well Uh and and to be clear, we do have operations in in in multiple places in Asia, but um you know, we thought about a bunch of different things here, including like Uh you know, what's centrally located

Where is the bulk of crypto happening? Uh, what's the relationship of the country like to the important jurisdictions in crypto? Um, and how easy is it for foreigners to get to set up shop there? Um and uh and sort of all of those combined together uh when we're kind of trying to decide where we should be expanding and and centering ourselves. Yeah. Now that's

That certainly seems like an enormous effort to be able to be able to trade on I think you said it was either thirty or thirty five, you know, of the top exchanges. That's about the number, yeah. It it it's taken an enormous amount of work. You know, on the operational side getting these, you know, entities set up and and these banking hands, but also just the dev side. Like you have to connect to thirty different APIs and

you know, maybe many of these APIs are total shit. Like these are not good APIs. These are APIs that just like don't have something. It's like You know, they just like don't tell you your open orders and you're like, All right, well how am I gonna trade if I don't know my open orders? Or they won't give you a history of your fields and you're like, Oh god, like

What's going on here? And so we have to find Exactly, right? Like and you know, you have to find ways to get data that you trust. And that's a non-trivial engineering task. when you don't really always trust the source of data to give you uh what you kind of think they should be.

Yeah. So I guess it you know, the natural question would be why was it important for you to be active on so many exchanges? Like what advantage was that to you? So the basic answer is that um there are two ways to think about, you know, what exchange you would choose. One, if you think of yourself as a liquidity taker, is my goal is I want to get long bitcoins. I just want to buy a bunch of bitcoins, right?

And if that's what you're saying, then first of all, it doesn't matter that much where you buy them. But to the extent it does, you just have to find the one or two exchanges where you can find the best liquidity, where you know you can buy everything you need without having much impact, without paying large um and that it'll interface nicely with your system.

Another version of it though is like I'm a liquidity provider and my sort of role in crypto is To be on the other side of those trades and to take advantage of arbitrage opportunities that arise because of customer demand. And so a lot of how we think about our trading is not like we're just gonna buy a lot of ripples.

You know, what what we're thinking about is like, where do we see imbalances in in supply and demand? Where do we see a ton of customers trying to buy some asset and not enough liquidity? So the price is running up there maybe more than it's running up in other places. So it creates an arbitrage opportunity, but only if you're able to sell where the customers are actually buying and similarly buy where the customers are selling.

And so because of that, um, you know, as as a liquidity provider, it's important for us to be able uh to be out there wherever there are costs. And I, you know, there's a lot of customers in crypto and they're not very centralized. uh is, you know, a as you might expect, a pretty decentralized space.

Um and that that applies to the jurisdictional and and sort of exchange ecosystem as well. And you have, you know, a lot of this is cultural. You have, you know, Chinese users on Chinese exchanges, you have American users on US exchanges, Koreans on Korean exchanges.

Um some of this is legal or regulatory, some of this is where people get banking hooked up to their exchanges. And some of this is which products people demand and which exchanges have those. But because of this, you have a lot of isolated pockets of trading on different venues. And we wanna be there to provide liquidity on on all of those to the customers on each one.

How come you were interested in being a liquidity provider? Because you can trade um arbitrage opportunities without necessarily being a liquidity provider. Like those are kind of two separate things, right? So I actually think that they're pretty interrelated. And, you know, sometimes people use liquidity prior to refer like very specifically to someone who has a market making agreement, whereas I'll have like a certain number of orders out at all times or something like that.

But I think there's a more generalized version of liquidity providing, which just means being there wherever liquidity is demanded, being there to provide to customers wherever customers come. If you think about what are you doing when you do an arbitrage, you're buying low and selling high. Well, why is it higher in one place than the other? You know, if you're buying on BitSamp and selling on Coinbase.

Why is there a higher price on Coinbase than Bitstand? Well, there are a lot of possible reasons, but actually probably what's going on is some combination of, you know, there are customers who are excited to buy on Coinbase, or there are customers who are excited to sell on Bitstand.

Actually providing liquidity to those customers is often exactly the same thing as doing that arbitrage. You know, both of those are another way of saying you're selling to the customers bidding up bitcoins on Coinbase and buying from the customers selling their Bitcoins on Bitstamp. Um and by providing liquidity to those, you know, to sort of imbalance supply and demand. Um venues.

you are actually completing the arbitrage. And most arbitrage arises because of something like this. Some place where there is an imbalance in liquidity demanded between two different coins or venues or platforms or derivatives or something like that. And you're kind of providing, you know, sell side to the buyers and buy side to the sellers. And probably the buyers are driving up the price, the sellers are driving down the price. And so you probably have done an arbitrage when you did that.

Okay, so I guess when I think of a liquidity provider, like the first thing I think is they've got, you know, bids stacked on one side and offers stacked on the other side. Yeah, providing liquidity. Yeah, and we do do a fair bit of that as well. And but it but again I think these things are actually somewhat related. Like let's say we've got a lot of bids stacked on one side and offers on the other. Um, and now a customer comes in and lifts one of our offers.

Well, that offer probably was above what we thought a Bitcoin was worth, which means that probably we can go buy Bitcoin somewhere else at a slightly lower price, or at least that's our hope. And if so, we've just done an arbitrage where one leg of it was was the liquidity providing. And and so I think that, you know, if you're providing liquidity successfully, you're probably doing arbitrage at the same time.

And the flip side of this is, and this is a little bit trippy, but but I think it's basically true. Um, you know, people always think about the liquidity provider and the arbitrager as the one who's. uh making and the the customer is the one who's taking. But imagine that, you know, instead of offering a Bitcoin at$13,005, I offer a Bitcoin at$13,000 and$6. Then a customer places a bid at thirteen thousand and five dollars and I sell to their bid.

Um, is that really that different than if I just had that Bitcoin offered at 13,005 in the first place? Like it's sort of the same result, um, but we flipped who's making and who's taking. And now you can get rid of the thirteen thousand six offer if you want, and it's still sort of the same.

And what you end up seeing is that like there's actually a really thin line between making and taking when it comes to providing liquidity. And, you know, yeah, you could have had a lot of offers out for them to lift, for customers to lift. Or you could wait for them to place their bids, then hit their bids at the same price your offers would have been at. And sort of both of those are providing liquidity to the customers.

And similarly both of those are, you know, probably you think you can do some sort of arbitrage with them. And so I think that, you know, while it is generally the case that liquidity providers are the maker and and customers are the taker, um, that needn't be true. There are places, and in fact there are a lot of places in traditional finance where for various marketing reasons that's not true.

And the customers are the makers and the liquidity providers are the are the takers. And it's actually quite similar of a dynamic. Are you ready to get serious about trading? Then join Tasty Trade, Investopedia's best platform for options trading in 2026. Stocks, options, futures, and more. Tasty Trade has everything you trade all in one platform. Get low commissions, including zero commission on stocks.

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I think what might be interesting is if we could maybe go through as a liquidity provider as how you trade. how you would react to maybe certain scenarios. Yeah, absolutely. I I guess like this video I mentioned earlier where there was a a huge cell wall on a particular exchange. I mean, what are you doing in in that situation? I know someone can just go watch the video um for a much deeper explanation, but

You know, obviously there's large cell walls uh or buy walls at you know, vice versa, it doesn't really matter. Um but, you know, when you see something like that, what's how are you reacting? Yeah. So, you know, the context here is someone sold about a hundred million dollars of Bitcoins on Binance the other day. Um, and they did it by just placing a giant offer for, you know, a hundred million dollars.

And so, you know, how do we react to something like that? Well, I would say a bunch of things go through our, you know. sort of think about a bunch of things at once. Um one thing is uh well who's providing to this customer and that's sort of the liquidity providing side of this. Someone just tried to sell a hundred million dollars and Like they probably can't just place an offer and immediately get lifted at the current market price. Like

You know, I I would not be excited to take on a hundred million dollar position uh at the current price and then have to figure out how to get out of that. Um so what's probably happening is they're driving down the price. Um, you know, whether that's happening because And and you know, there are a lot of ways you can imagine that happening. They just keep lowering their offer until someone lifts it, um, or they just send one giant offer at a very low price at the beginning. But either way.

Uh, you know, there's sort of this auction almost where they're auctioning off, you know, 10,000 bitcoins to whoever's willing to bid the most for them and seeing how low they have to go to get those those buyers. And so the first thing that I think about is well, should we be one of the buyers?

You know, are they offering these Bitcoins at a price where we actually just want to buy them from the customer? And if not, what price do we want to buy them at? Like at what price are we like, yeah, we'll just buy those?

Um and you know in this particular case actually they they placed their offer low enough eventually that we did definitely want to buy them. And again you kinda kinda see this like uh you know relationship between T game frightening there where there weren't enough bids out to fill this order.

So instead they just placed it as an offer and waited for the liquidity providers to come in and take their very low offer for the bitcoins. Um so you know the first thing is do we want to buy this? And once we decide yes, the second thing is well can And the thing in crypto is that you don't have one balance sheet. You have a separate capital pool on every exchange. I can't spend my dollars on Coinbase to buy a Bitcoin on Binance. That doesn't work.

So the next thing we needed to do is get a bunch of capital over to Binance to buy this with. And in particular, the seller was selling it for uh what's called Tether USDT, which is a US dollar-based stablecoin. So the next thing we need to do is get a lot of tether over there to to buy these bitcoins. That's sort of a a somewhat crypto-specific phenomenon of like uh you know completely fractured uh capital base.

And it really matters where physically your assets are and you need to get them in the right place in order to trade. So the next thing we're thinking about is all right, we want to buy this now. Physically we have to do that. So we have to ship a lot of tether over there. And well, first we've got to find a lot of tether. So, you know, one of our trains of thought was like all of the different pieces that we needed to put in place in order to be able to buy these Bitcoins.

Um the flip side of this is that, you know, we want to hedge this trade. We want to find some ways that we're not very exposed to Bitcoin price. And so on the other side, we're thinking, well, okay, we know we're buying a lot of Bitcoins right now. Where are we going to sell?

Um, and so at the same time we were thinking about, okay, here's all the platforms we're on, here's sort of our thought of all these products. Given all that, putting it all together, uh, you know, what's the best thing we can do?

given both sizing and and pricing and things like that. And so simultaneously we were trying to decide, you know, what are we going to sell, where are we going to sell it, and what do we need to do to be able to sell the size that we need there. And so those were sort of the first two things that we were thinking about there.

Um and then maybe the third thing that we're thinking about is what's what does this mean for markets? Like what's this gonna do to Bitcoin? What's gonna happen when they place this order? What's gonna happen when it goes away? Like is Bitcoin gonna go up, gonna go down? Um and and that's a complicated question, you're never gonna be sure, but you know, sometimes you can kind of get an instinct on that.

Okay. So I guess maybe a silly question, but why did you want to buy this? I think you said that the offer moved down maybe a couple of prices to an area where you became interested. Um Yeah, but why were you interested in in taking this offer? Right. So I think that there are two ways to think about this. The first is like, well, we just looked at what price it was at and it was trading two percent lower than all other bitcoins in the world.

So there was just an arbitrage. And buying this and selling Bitcoin somewhere else, you just made two percent off. So that's sort of the most straightforward answer to your question. Is we waited until it was offered lower than other Bitcoins and we could do an arbitrage, and then we did that arbitrage. Maybe another way to approach this though is that it's not surprising that.

Um, because this guy really wants to sell all those bitcoins. He's gonna have to keep moving those bitcoins down and down and down until we want to buy. um or until people like us want to buy. And so it's sort of not surprising that like ultimately his offer settled in a place where it did make sense for us to buy because

You know, that was the thing that stopped it from going even lower, was that we bought it up. And in fact, it wasn't just us, it was many, uh us and many people like us, all sort of racing to get their tether over to Binance to be able to buy these big. And so we kept moving it down until it hit the price where we would be able to make money buying it and selling somewhere else. Right. So once you've just taken all these bitcoin

Uh, you have a pretty heavy long position. What's your next step from there? Like I guess you're immediately looking to see where you can sell these and offload them on different exchanges? So we do it actually at the same time. And so it's not so much that we buy all the bitcoins and then we're like, all right, what are we going to do with these bitcoins?

It's as we're lifting this offer, we're simultaneously selling in other places. And that also gets back to the capital thing. Obviously, they're not the same bitcoins, right? They can't be because those big coins were just buying on one finance against take it, you know, it takes half an hour to get them anywhere else.

Just as blockchain time. So we have to have other bitcoins in other places that we can sell or some derivative product or something, some way to be able to hedge this trade. And as we're buying these bitcoins, we're selling in other places. Okay. So you're buying into this large seal wall offer from Binance. Meanwhile you're stacked on the offer on a bunch of other exchanges around the world. Exactly.

Ok. And now again, you can kind of see why it's an advantage to be on a lot of different exchanges, like all of a sudden we want to source a lot of sell size, you know, we want to be selling a lot. And we want to be able to source as much liquidity for that as possible to be able to hedge this trade. Hmm. Okay. So

What about just another example I'll throw you away? What about in a fast moving market? Like as a liquidity provider, as a market maker, you know, my basic understanding of it is that. It it's it's easier to make a market where, you know, there's a lot of sort of two way flow. If uh if it's just a fast moving market in one direction, a lot of the flow is sort of one directional. Obviously buyers are very aggressive.

Um, how are you reacting in an example like that? Like are you just pulling your offers out of the way or what do you do there? Yeah, it's a good question. And I I think I would flip this on its head a little bit. Um and what I'd say is that, yeah, sort of by default, it's easier um to do this in a in a calm two-way market than some sort of frenetic buying environment. But because it's easier, anyone can do it. And in fact, you won't find many opportunities.

It's just people are going to compete the spreads till they get to zero. Everything's going to be static. And if there's some arbitrary, we'll just come in and tighten it up until it's gone. Whereas in a very fast-moving market, because it's harder, because it's more chaotic, that also means that there are a lot of opportunities if you can fight through the chaos that other people haven't managed to get to.

And so I think the way we think about it is not that it's a better environment when things are calm. We think it's better when things are are chaotic for us. And the reason is we think that we're You know, our one of our relative strengths is understanding chaotic environments, is understanding, well, how do we price these assets when everything's moving? You know, it's not like a Bitcoin's just been trading at$8,000 for the last month.

And we buy at seven thousand nine hundred and we sell at eighty one hundred, like No, things just move five percent the last minute, but actually not everything moved five percent, like everything's moved a different amount. And there's dislocations everywhere, and liquidity's really thin. And now given all that craziness, we have to decide what we're gonna do.

And so a lot of what we've been doing over time is building up systems that use a variety of quantitative models, uh, combined with sort of human intuitions and and real-time adjustments. Um to attempt to still be able to do

good trades and understand what's really going on and what things are really worth while everything is flying around and prices are are skyrocketing or crashing and there's huge one-way flow. Um And that's where you see larger opportunities and larger arbitrage is exactly because they're harder and they're only going to be there for a few seconds and only if you can realize exactly what this thing is worth.

even when you're getting a lot of conflicting signals. Right, right. Okay. So what would you say is what would you say is like the biggest risk as a liquidity provider in in the crypto market? Like what's the biggest risk to you guys?

Yeah, and and I think that like risk can mean two different things. And we sort of split it up very much between these two. One sort of risk is like the risk that we just don't make much money. And You know, to that extent, what are the risks? Well, obviously, more competition is one of them. Um, us just doing a mediocre job, I think, is probably the biggest.

It's, you know, this is a really complicated, messy environment. And you can only do these traits if you get a lot of things right. And if we just kind of half ass it, And we're like, yeah, I don't know, it'd be nice to have this bank account, but it's a lot of work. Let's not bother. Now all of a sudden some great trade comes up, but you can only do it if. You can send money to that bank account you she didn't bother getting'cause it seemed like a lot of work. And now you're not making money.

So I think that's sort of maybe our biggest risk in terms of just like, why would we stop making money? The answer is we just are kind of lazy, you know? Just don't do a good job and we'll stop making money. Like It's not like we just have this machine we can turn on and it's gonna print money forever. Like we need to keep innovating, keep working hard, keep refining our systems.

um keep refining our internal intuitions about what's going on and keep getting better every day in order to to keep up and to keep growing. So that's one way to think about them. The other way to think about it is like what's the biggest risk for us losing a lot of money?

Um, and on that, well, there are a few big ones. I think exchange hacks are obviously one of these. And you know, we have to be really mindful of like where are we putting our assets? Uh, you know, do we really want to have, you know.

20 million dollars sitting on quadriga. Like, yeah, that probably wouldn't have gone so well. So you know, being smart about how much you're putting where, managing your risk. Um, and then there's another one of like, you know, do you just do something totally crazy? Do you decide, yeah, let's get along two hundred million dollars of Bitcoin, hopefully it'll go up. Uh well it's fine if you got ten billion dollars and a mandate to take risks.

But if you don't and Bitcoin crashes, you've just lost a lot of money. And so I think we kind of think about this, you know, the the large risks as like one of them is like somehow like, you know, an exchange loses our assets. And the other is like we just put on positions that we have no business putting on that are way too risky and we get unlucky and lose to them.

Something I did want to ask you, uh, and I think this ties in here, is, you know, you said the word systems and it just made me think of this. To what extent

Are your trading decisions discretionary versus model driven? I know there's obviously certain instances like what we spoke about before, where there's a a large seal wall uh on an exchange and you're talking about sort of taking that Um, but just on in a more regular sort of normal trading environment. The answer is somewhere in between. A and in particular, almost all of our volume is done by automated systems, but they're automated systems with heavy amounts of real time manual input.

And so we have, you know, quantitative traders 24-7 monitoring all of our trades and adjusting parameters. And rather than thinking about our automated systems as some sort of like brilliant black box that can outsmart all humans or anything like that, we think of them as like a really dumb human that can do a hundred thousand things at once almost. And you know, the reason that we need automated systems is we want to be trading on, you know, thousands of markets and we want to do it quickly.

And we want to be computing a lot of things on the fly. And those are not things humans are good at. Um, but fundamentally our systems are just doing what our traders tell them to do, just like really quickly. Uh and so You know, in the end, if they're doing a trade, probably it's because we decided that that trade would have been good.

And if there's a trade they don't do, it's not because our systems suck. It's probably because we didn't realize that was a good trade to do and so didn't tell them to do it. or didn't give them the tools to figure out that that would be good. And so, you know, a lot of our training is somewhere in between. It's done by automated systems, but it's very human legible and it's done sort of with real-time monitoring and input and feedback from humans.

What might be an example of parameters that you adjust kind of on the fly? Yeah, so I'll give you just some of the like, you know, most common ones. And one of these is what should our positions be? You know, we're uh we we stay pretty hedged, we're not putting on huge positions, but we do put on small positions.

And you know, we have traders actively thinking about like, I don't know, should we be, you know, long fifty thousand dollars of ripple right now? Should we be, you know, short a hundred thousand dollars of each? Um and we have parameters to sort of instruct our systems to do that. Um, so that's one set of of parameters that we look at a lot. You know, another set is how much uh edge should we be looking for?

Should our systems just do a trade if they think it's really marginally good, or should they wait till it looks extremely good before doing anything? And how should that depend on the coin, the environment, the exchange, the price currency? uh what we've been doing recently, you know, a a whole host of factors.

Um and we're tweaking those frequently. Um, you know, there are parameters about you know if we're providing how large do we want to provide do we want to show 100 bitcoins at this price 50 a thousand two um you know that's sort of another parameter that that we'll be sort of pretty actively thinking about And then maybe one last thing that I'll I'll I'll just mention is capital management. Again, because exchanges don't share capital.

You need to be physically moving your stuff around to trade. And so we have pretty heavy, you know, human input on where all of our assets should be so that we're kind of set up to do the trades we want to do. Okay. Okay. That's uh that's really interesting actually. That's um I appreciate you sharing that insight. Um

Now you you did mention hedging there and you've mentioned it a couple of times and I've I I guess I've kind of glossed over it to this point. Um and I should ask you about it because it's such a big part of what you do. Yeah. Just talk to me a little bit about how you are hedging and why there's the need to hedge, how you actually hedge. Uh yeah.

Yeah. Um so the first that I'll say is that You know, we think of hedging as as accomplishing two different goals. One goal is risk, um, and the other goal is expected value. And maybe I'll start with the second one. Sometimes when you hedge, It's not because you're worried about the risk. It's because you think you have a bad position. Um, right? Maybe you buy a bunch of bitcoins, you're like, I think Bitcoin's about to go down. I'm long. That's bad.

And you probably want to hedge that position. You probably want to sell somewhere. Um the second is, yeah, I got a hundred bitcoins. I don't really know if it's gonna go up or down. I don't have a particular opinion on that. So I could easily win or lose to this position. Um, but I just don't want that variance. I don't want that volatility in my profit. I want to be clean. Um and

You know, the first you always want to be thinking about. And so one thing we we often think about is like, do we have toxic positions on? Like, do we have positions on that we're actually gonna probably lose to if we don't have And the second is more a question of what's our risk tolerance. You know, if we buy$10 of Bitcoin, we don't need to hedge that. You know, we're fine taking that, you know, uh 50 cent.

P and L swing. But you know, if we put on a billion dollar position, you know, there's a 50% chance we're just out of business tomorrow. And even though in the other fifty percent we make a lot of money, we don't wanna take that trade. Because we don't want to go out of business. And so Uh you know, the second way that we think about hedging is like if we risk too much, uh, we might endanger our firm's ability to continue operating and to continue trading. And that would be really bad.

And so for for that style, what we're thinking about is like, well, you know, what scales that matter at? Like how good of a position can we put on uh before we have to start.

Thinking seriously about this, and probably you want to not get to the point where you have to think seriously about it. Probably you want to have put on a substantially smaller position than that. Um And uh and in order to do that, even if we don't think Bitcoin's particularly gonna go down, the more Bitcoins we buy, we gotta start selling.

Uh well, we have a bunch of different ways. You know, there are a lot of platforms in crypto where you can do margin trading of one sort or another. And we basically take advantage of all of those. And try and figure out dynamically, sort of at each point in time, what's the best hedge for our position? What hedge do we think we're gonna make the most money or at least lose the least money putting on?

Okay, so just one of the scenarios that you mentioned there, I'll pick up on that. So you said that you were long, let's say, a hundred bitcoin, and you didn't really have a view on where it was going, but you felt as though It wasn't a position that you wanted to lose a lot of money on. Right. So you might hedge that position. So how are you actually hedging that? Like what are you doing to hedge that? Right.

So obviously the most obvious thing you could do is send those bitcoins to Coinbase and then sell them for dollars. Um but that's kind of a shit way of doing it. Among other things, you have to wait an hour before you can hedge. Uh and maybe you'll lose in that hour. And uh also it's gonna tie up all of your capital and you're gonna be limited to the liquidity on one exchange and you know, a bunch of other things. Um

And so, you know, what are wasting hedge? Well, that is one way. You can if you're long, you can find bitcoins you have lying around and sell them on some exchange for for dollars. If you're short, you can find dollars you have lying around and go send them to exchanges and buy bitcoins with them. Um, but there are other things you can do too. So maybe you could go trade futures somewhere.

Um, you know, you could find you know on BitMEX, there are Bitcoin features products. Uh CME has Bitcoin features. Um OKX will be a big Bitcoin feature. So there's a bunch of these lying around. Um and you could do a margin trade on one of those where you post some plateral. Um and if you're long, you could sell some Bitcoin features.

And now you've got some Bitcoins and you have a short Bitcoin future position to hedge it. And those aren't exactly the same thing, but they're pretty related. And you know, eventually those Bitcoin futures are going to expire to the price of a Bitcoin. And so, you know, you're no longer really exposed to Bitcoin going up or down. And so, you know, we look at a lot of futurist platforms. We also look at places where you can margin trade spot.

So, you know, a bunch of Chinese exchanges have ways that you can put on a leveraged position just on Bitcoin versus Tether. You know, Kraken has some Bitcoin US dollar margin trading on it. Um, Bitfinex has margin trading. Uh and you know, sort of throwing together all of these different venues, uh, there are a bunch of places that you can, you know, get longer or shorter cryptocurrency exposure without needing to send those same physical bitcoins over there to trade.

Right. Uh just continuing with this same scenario. Um, where you're long a hundred bitcoin, you're not really sure where it's gonna go, you don't have a view on it, uh, you also have the view that you don't wanna lose much money on the position. Why would you choose to hedge that position rather than just uh seal back into the market?

So we would consider that a way of hedging. If you're long 100 bitcoins, you just bought 100 bitcoins. One way to hedge it is to sell those out again. And that would work. And so then the question is, why would we do something else instead of that? Why don't we just sell our bitcoins? And the reason is, well, let's go back to this Binance example, right? Someone just sold, you know, ten thousand bitcoins on Binance. We bought a bunch.

Well, the reason we bought them is that the Binance you know, the Binance Bitcoins were were really cheap. They were trading at a low price because of the seller. And if we want to get out of this risk by selling those bitcoins, you'd be selling them back at that same low price. And it would defeat the whole point of having done the trade. And, you know, in general when you're sort of doing arbitrage.

Probably if you just sell out in the same market you bought in, you're gonna lose all of your arbitrage gains. And what you want to do is instead it sell on the higher markets, you know, sell on the places that didn't have this big this big seller driving down the price. One of the things I do find very interesting about you and what you've been able to achieve with uh Alameda Research is the fact that you've only been going for two years.

And it seems like you've just really grown at a exponential rate. I mean, what do you think is the I don't want to use the word secret, but what's been the the driving force behind that?

Yeah, I think the answer is sort of working hard. I mean it's sort of a lame answer, but I think that there's a lot of truth in it, the working hard and hiring good people. Um, I don't think that it's we have this, you know, one weird trick to grow your company in two years or or anything like that. I think it it's it really is just like you know, we threw together a lot of really impressive employees and like extremely happy wi with our team. Um and uh

And we've just really been plugging away. Like we've been, you know, and it's not just we've been working long hours, but we've also just been trying to hold ourselves to a really high standard and not feel like, yeah, you know, we we made a successful business. That that's just that's, you know, that's what we're going for. We're done now. Instead you say, Yeah, but it could be big. You know, it could be better. And

uh however much we've done, there's always way more to do. And every single day we we build on that. We build more tools. We build more models. We throw out models that don't make sense anymore. We think of more trades, we get onboarded to more venues, we get more, you know, bank accounts and entities, we hire more people, we build more relationships in the space, and and we just keep going at this and and we make sure not to get complacent, not to stop.

Um and and we try and be self-critical, but we you know, we're not like we don't congratulate ourselves for everything we do. You know, we fuck up sometimes. And and when we do, we try and figure out what did we do? Like, why didn't this work? Maybe we just got unlucky in which case, that's fine. That happens. Um shit happens.

But maybe it wasn't luck. Maybe we kinda could have realized this would have happened. And then we should figure out, well, what underlying mistake are we making? Like what's sort of the thing that we should be changing? um about you know our uh you know about our models or behavior or understanding or anything like that, that would, you know, have caused us to not do that.

Um and so I think that that's one big piece of it. Um and you know, kind of pursuant to that, we've we've kept going forward and you know, we we've built up a pretty big trading operation where, you know, something like five percent of global crypto volume at this point. But, you know, we also haven't stopped at that. And so, you know, we we ventured into the OTC space. Uh we built an electronic

uh OTC trading platform where users can get 24-7 automated quotes. And then a few months ago we released FGS. Which is a uh cryptocurrency derivatives exchange. And kind of similar to the Alameda trading operation, we're seeing this as a product we really want to make.

the best, make it as good as we can. And we're not just trying to release a thing that is a derivatives exchange. We're trying to release the best derivatives exchange. And You know, we're going to keep iterating, keep releasing new features as quickly as we can, keep taking feedback, understanding what we can change about it so that it is the platform that people want to use that fixes all of the issues that other platforms have in this space.

Um and you know, I expect us to be releasing more and more things going forward. And, you know, for Alameda to keep Discovering, you know, more and more ways uh to trade in crypto. Um and and maybe one one last thing I'll say about this is You know, I think one piece of this about not sort of getting complacent um is that I don't know, I I sort of originally came into this space.

uh with the goal of donating, uh with the goal of, you know, making what money I could and then giving it away. And the interesting thing about that is that, you know, if you're just a a human buying cars or something, you know, there's a lot of very, very compelling evidence that Beyond a certain point, Mighty doesn't really make you any happier. You've got a perfectly comfortable life. You know, the next million dollars isn't going to do very much for you.

you maybe your car gets a little faster. But when you look at the scale of the world's problems, it's massive. Right? There's you know, thousands of people dying of preventable uh causes every day. And uh you know, all of a sudden you're not talking about how much could you spend to make one person's lives life better. You're talking about billions of people's lives better. And and just the scale of funds that you can deploy to that are mass

And uh, you know, it's like you're talking about like a billion dollars to to really fix some really large problem in the world, like, you know, people dying of malaria or Um, you know, a and and because of that, like, it sort of didn't make any sense to to stop scaling Alameda once we'd, you know become reasonably big. It it kind of has felt pretty naturally like there's always more that we could be doing and and we sort of

have the mandate to always do you know, push forward as far as we can. Yeah. That's a really respectable answer, man. I I I think that's uh Thank you. That that's that's very good of you.

Um now just to take things out here, I guess I should ask you if you have, you know, a a longer term view on the crypto market, uh, like a macro view on, you know, where you see things moving forward over the next couple of years. I don't normally like to ask these sort of questions, but I feel like in the crypto market, uh You know. Yeah, and you know, I'm sure you've got some opinions on on that. Yep. So uh I do have some opinions, although they might not be uh

might not be a as exciting or or extreme as as uh could be. Um, you know, I think I think basically that it could go either way, sort of the boring answer. Like I think that you could imagine a world where crypto is just fucking huge. And you could imagine a world where it just kinda w whimpers away. I think both those are possible. And uh

You know, i I think one question is, well, what are the odds each happen and I they they actually both seem pretty plausible to me. Like it's not just possible, like really could happen. Like you could imagine crypto really taking off. It's already kind of gotten an enormous share of the world's attention.

And you can also imagine the world just saying like yeah, this is kind of stupid. Like why why do we think so much about this? This is kind of electric money. Uh the US dollar is totally fine. You know, we're just gonna stick with that.

And what's gonna determine that, I think, well it's a lot of things, many of them probably pretty chaotic and random, but one thing is can this base get its chip together? Uh there's a lot of pretty broken things in crypto right now when you scratch beneath the surface. uh you know, exchanges that have lost hundreds of millions of dollars. Uh

to you know poor risk controls. You have uh the inability to actually move your money around between the platforms, which is ironic for an asset whose whole point is you can move it around easily. you've obviously had a lot of scams and and beyond that you've had a lot of ICOs where, you know, sort of the the approach was let's create a coin, let's sell it, then let's maybe create a company or or maybe not. We'll sort of see about that last one. Um and uh you know, all these things.

You say like why isn't the institutional money throwing you know flowing in? Well you get a Goldman, you're like, all right, so here's the deal guys. Six chains lost a few hundred million the last year. Um it's gonna charge you uh, you know, probably millions a year in fees. Um and uh you can only get a million dollars a day out of it. And uh three quarters of the products listed there have no company associated with them and somehow have hundred million dollar market cash.

And I don't think Golden's gonna be like, yeah, that that's our bread and butter. You know, they're gonna be like, what the fuck? No, we're not gonna touch that. And and so, you know, I think that like a lot of what will determine this is can the space

really, you know, I don't know if professionalize is quite the right word because you also sort of want to retain its, you know, innovation and and um and all the things that made it kind of take the world by storm, but can it maybe do that but cut out the bad shit? Um And uh I think that's gonna be one big piece. And I'm gonna just say one other thing on this, which is what's a Bitcoin worth? Sort of an interesting question.

I I don't know, I don't know. I certainly don't know. But when I've tried to think about this, you know, I've gone through thought experiments like, well, I don't know, which should be bigger, which should have a higher market cap, like Bitcoin or like, you know the currency of Vestonia or like Poland.

Or how about like Australia or Taiwan or the United States or the Euro? Like where would you slot Bitcoin into that? And and so you can kind of guess like, well, I don't know, like about which country do I think about has, you know, about as much power in the world as crypto? Another approach might be what are the odds that Bitcoin is the new euro that like in twenty years like

you know, twenty percent of the world's using it as their primary currency. Um you can try and think about like how does it compare to gold, like which, you know, if it's goal is to become a store of value, like gold seems like kind of the standard uh there. And those are sort of three different ways to estimate the value of a Bitcoin. And you know, they're not easy, but I think you can actually get like some plausible ranges from that.

And I don't know, whenever I try and do it, I get ranges somewhere between like a thousand and a hundred thousand. And that's obviously a huge range for the price of a Bitcoin. But it's worth noting we're at ten thousand right now, which is sort of, you know, the geometric mean of those, which makes me feel like I don't know, the current price is pretty plausible. It it doesn't seem obviously too high or too low. And that uh You know it

You know, it doesn't seem to like obviously it's gonna go up from here or obviously it's gonna go down from here. It seems like, yeah, either could happen depending on whether it does move closer towards achieving that goal of becoming the Euro or gold or something like that, or whether the world just kind of decides, well, this is kind of accessible. Like let let's just forget we ever did that.

I think that's a really interesting answer given how invested in the space you are. And I don't mean invested as in like your a hundred percent long Bitcoin or any crypto product, but But obviously my businesses are extremely long this space, even if they're not literally long, because the bigger the space is, the more business there is for us. Yeah. So I think it's interesting that you have a very neutral view, uh, sort of on the the macro outlook of of the crypto market.

Yeah, and and I think one thing I will say is you know, I do think the upside is maybe higher than the downside. Like Bitcoin, I don't think it's going below zero. That'd be a little bit difficult. Uh but it it could more than double. And and I think like, you know, people often use this argument for stocks and it's kinda stupid. But

But for Bitcoin, I think it's real. Like it couldn't it, you know, more than just double, it could 10x. And and so I do think that there's a pretty plausible argument of like, well, you know, kind of 50-50 on whether it goes up or down, but if it goes up, it could go up a lot.

Um, but I I I don't believe that extremely strongly. Um and you know, I don't feel like it's just like obviously Bitcoin's going up. Yeah. Yeah. Okay, man. Well let's uh let's leave things there. Like I said I have a ton of notes here and um there's a lot we didn't even get to, but um maybe we should try and line up a part two at some point.

Uh absolutely.'Cause I've really enjoyed this. It's been uh I I've found it really fascinating to get bit of an insight to how you guys are running your business over there.

Thanks. I've I've enjoyed this too and would be excited to uh Say to to go for round two. Yeah, cool man. Um, if someone wants to follow you or just uh get a bit more info, uh learn a bit more, um, you're on Twitter. Yep, so you can find me on Twitter, I'm SBF underscore Alameda. Uh you can find Alameda Research.com. or Alameda Research at you know Alameda dash research dot com and you can find FTX our derivatives exchange at uh ftx.com.

Okay. And your OTC business, is that all through Alameda? That's not a separate um sort of spin-off? That's right. So so we actually have you can do it at through either Alameda Research or FTX. They both have the same platform on it. Um and it both you know both FTX.com and almeda dash research.com. have links at the top to the uh OTC portal.

Okay. Good one. I'll include those links in the show notes as per normal and I'll also include a link to the uh the the video that you posted um while you were live trading the other day. Sounds good.'Cause I think that's worthwhile um everyone checking out. So uh I'll put that link in there as well. Uh Sam, again, I I really appreciate this. Thank you for taking, you know, an hour out of your evening to speak with me. It's it's appreciated. Of course. Thanks for having me.

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