OI14: Behind the Scenes of a Crypto Hedge Fund ft. Michael Hall & Anatoly Crachlilov
In this episode, Moritz Seibert speaks with Anatoly Crachilov and Michaell Hall from Nickel Digital, a prominent London-based crypto hedge fund. Anatoly (CEO) and Michael (CIO) founded the company in 2019 with an initial focus on in-house arbitrage and basis trading strategies. Over the years, their business model has evolved and adapted to the fast-changing world of digital assets. Today, Nickel Digital operates as a multi-strategy, multi-manager setup with more than $250 million in AUM, making it one of the largest and longest-standing crypto hedge funds globally.
Anatoly, Michael and Moritz speak about the opportunities and challenges of operating a multi-PM digital asset hedge fund, how they differ from traditional asset hedge fund pod shops, and how the attract and find new PMs to work with them.
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Episode TimeStamps:
02:13 - Introduction to Nickel Digital and how they found their way to crypto
08:10 - A trip down memory crypto lane
12:25 - Why is the basis still so wide on crypto?
15:07 - The state of alpha in the crypto space
18:23 - What kind of portfolio does Nickel Digital run?
19:56 - How they take advantage of automation to carry out a 24/7 365 trading strategy
22:24 - How they manage the managers
25:22 - How they approach netting cost
27:40 - Their process for paying managers
30:59 - Their manager onboarding process
38:41 - Why traders make more money at Nickel Digital than anywhere else
40:52 - What is the average sharpe ratio in the crypto space?
43:19 - The tech backbone - how Nickel Digital is connected to exchanges
46:08 - FTX collapse - The most stressful period for their business
49:46 - How they manage price and risk in 24 hours/day markets
54:06 - How crypto differ from regular markets
57:09 - The pitfalls of trading crypto
01:02:35 - What is their long term vision for Nickel Digital?
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