This post was last updated on May 22nd, 2018 at 05:34 am
This is part 2 of my conversation with Ateet Ahluwalia.
I really enjoyed the content from part 1 and I wanted to give you a second chance to hear from Ateet and tease the first episode.
If you didn’t catch our previous episode, here’s some background: Ateet is Managing Director at CoVenture Crypto, and in a past life, he was a Macro Credit Trader at Barclays, a Macro Portfolio Manager at Bluecrest Capital, and a Credit Index Trader at Goldman Sachs.
In part 1 of this two-part interview, we discussed quantitative crypto investing, the values of quantitative trading, why whatever idea you have must be quantified, and how Ateet’s investment research during the Cyprus bailout led him to Bitcoin.
In this, part 2 of our conversation, we play a fun lightning round game of over-rated / under-rated, discuss the impact that regulation is likely to have on the space, and take stock of the real impact that our community is having on the world.
- How Ateet feels about Bitcoin Futures.
- The potential impact of a Bitcoin ETF.
- Ateet’s favorite analysis tools for quantitative trading.
- Why bear markets are often misunderstood.
- The number one thing that Ateet would like to see improve about the data in the crypto space.
- Why Ateet feels indexing is dramatically underrated in the Crypto space.
- Ateet’s thoughts on value investing and custodianship.
- Why Ateet is so passionate about adding some thoughtful regulation to the space.
Links Relevant To This Episode:
- CoVenture Crypto
- Bluecrest Capital
- Goldman Sachs
- Eric Meltzer
Terms Mentioned in the Episode:
Clay Collins: This is part two of my conversation with Ateet Ahluwalia. I really enjoyed the content from part one, and wanted to give you a second chance to hear from Ateet, and tease the first episode. The entire point of these second shorter episodes is to give you some exposure to a guest in case you want to listen to the prior longer form interview. If you didn’t catch our previous episode, here’s some background. Ateet is a managing director at CoVenture Crypto. In a past life he was a macro credit trader at Barclays, a macro portfolio manager at BlueCrest Capital, and a credit index trader at Goldman Sachs. In part one of this two part series, we discussed quantitative crypto investing, the values of quantitative trading, and why whatever idea you have must be quantified, and how Ateet’s investment research during the Cypress bailout led him to Bitcoin. In this, part two of our conversation, we play a fun lightning round game of overrated/underrated, discuss the impact that regulation is likely to have on the space, and take stock of the real impact that our community is having on the world. Let’s play a lightning round of overrated underrated slash random questions. Bitcoin futures, overrated or underrated?
Ateet Ahluwalia: Underrated. As soon as they get more volume to the exchanges, it could lead to potentially other things happening in the space, which can only build it.
Clay Collins: The impact of a Bitcoin ETF, overrated or underrated?
Ateet Ahluwalia: Massively underrated to an extent I can’t even explai, because that gets retail investors involved and that is when you can see meaningful holdings move into it. It’s an easier on-ramp into the Cryptosphere.
Clay Collins: Favorite programming language?
Ateet Ahluwalia: Python: easy, simple, straightforward, no looking things up to figure out XYZ. It’s just there and it’s in your face.
Clay Collins: Favorite analysis tool for quantitative trading? Like R, Excel?
Ateet Ahluwalia: Oh, man. I’m a big fan of R. I’m a big fan of Python. I’m a fan of Java. Anything that allows me to analyze the space, I’m a fan of, so my answer’s going to suck.
Clay Collins: Bear markets, overrated or underrated?
Ateet Ahluwalia: Misunderstood and underrated. Let the tech cycle catch up to the hype cycle. It’s good for us.
Clay Collins: I have a friend who’s father has a history of fires. He says, the problem with Detroit is they just never had a fire. He’s like, “LA had a good fire. Chicago had a good fire. New York had a good fire. Just clears everything out.”
Ateet Ahluwalia: London had a good fire.
Clay Collins: London had a good fire. He’s like, “There’s just never been a good fire in Detroit. That’s their problem.”
Ateet Ahluwalia: Oh my gosh.
Clay Collins: Number one thing you’d like to see improve about the data in the space?
Ateet Ahluwalia: Consistency. I think a lot of data is interpolated, and it’s not real, and it’s just all over. The shop, consistency would be great. Like some kind of exchanges coming together to create a standard.
Clay Collins: Primary source data, a more primary source data rather than analyzed data, or that’s just part of it?
Ateet Ahluwalia: Precisely.
Clay Collins: Okay, time out. I’m going to do some native advertising for the Nomics API. Ateet just mentioned how crapy the data is in this space. Well, that issue is exactly what the Nomics API addresses. The company I co-founded, Nomics, offers squeaky clean and normalized primary source trade data offered through one fast and modern API. Instead of having to integrate with a bunch of exchange APIs of varying quality, you can get everything through one screaming fast fire hose. If you found that you or your developer have to spend too much time cleaning up and maintaining datasets, instead of identifying opportunities, or if you’re tired of interpolated data and want raw primary source trades delivered simply and consistently with top-notch support in SLAs, then check this out at Nomics.com. Okay, back to the show. Telegram groups, underrated or overrated?
Ateet Ahluwalia: Unable to answer because I don’t really follow many.
Clay Collins: Indexing in the space, overrated or underrated?
Ateet Ahluwalia: Dramatically underrated.
Clay Collins: Oh, interesting.
Ateet Ahluwalia: Index funds, indexing, t just allows one to get more exposure through diversification. Depending on how it’s structured, it could be an intelligent way to get access.
Clay Collins: Proprietary knowledge, underrated or overrated?
Ateet Ahluwalia: If you could quantify it, it’s beautiful. If you can’t it’s a waste of time.
Clay Collins: Value investing in the space, overrated or underrated?
Ateet Ahluwalia: In my opinion, massively overrated. You can go down a rabbit hole of what is and isn’t value. The metrics change all the time. And to date, I haven’t seen anything statistically significant in that space, but I’m cognizant of the fact that it will evolve, and as the space matures that could be a flavor of ice cream I enjoy.
Clay Collins: Etheorem, overrated or underrated?
Ateet Ahluwalia: Underrated. Having a benevolent dictator at the head is something that is always a good thing, and thus far, that’s been the case. So let’s see, the jury’s still out on that one. Ask me in 10 years, it’s like, I can’t even give you a good answer. I think Etheorem’s fantastic, personally. It’s got a lot of kinks to work out. They understand that, and they’re working toward it. I could never hate on that.
Clay Collins: Non-custodial decentralized exchanges, overrated or underrated?
Ateet Ahluwalia: Wow, given everything I’ve said about custodianship, I’m more favor traditional custodianship, and I realize I’m going to get hate mail to my eyeballs on it, but that’s just me.
Clay Collins: What’s your twitter handle?
Ateet Ahluwalia: @pleaseforgetme
Clay Collins: Please no more hate.
Ateet Ahluwalia: Please don’t hate me.
Clay Collins: I have a bunch of them here, but it’s just all like about specific projects. It strikes me that a lot of these things are just like numbers on a chart for you.
Ateet Ahluwalia: Let’s be honest, there’s a lot of people that are supremely qualified to take the lightening round and talk about very specific projects, the ins and outs. I’m not that guy. I could talk about the over arching, like macro thesis around the space, liquidity, data, testing, that kind of stuff, but you’d be better served asking some of the geniuses that I’m privileged enough to talk to in this space about projects. That’s actually one of the best parts about the space, man. I’ll just call someone up and it’s just, they’re so happy to talk about it. They’re so passionate. If you have a good teacher, it takes three months of work and makes it 30 minutes. Everyone in this space, for the most part, is just a total beast when it comes to that. I’m very fortunate to work in the space because of it.
Clay Collins: Exponential moving averages, overrated or underrated?
Ateet Ahluwalia: Wow, I think adequately rated, because so many people use them. But there’s a reason they do, right?
Clay Collins: NVT ratio, overrated or underrated?
Ateet Ahluwalia: Pass.
Clay Collins: Okay, okay. Metcalfe’s law, overrated or underrated?
Ateet Ahluwalia: We all appreciate it. It’s adequately rated at a very high level.
Clay Collins: Well, that wraps up this lightening round. That was a lot of fun. Ateet, before we get going, do you have any last words for our listeners?
Ateet Ahluwalia: Yeah, I think people, if there’s one thing I can impress upon people, is that thoughtful regulation would be such a blessing to this space. It’s something that we need. We need these guys to regulate other asset classes to be involved, because what it does is it alleviates the issue around fiduciary standards that a lot of the big players have to think about before entering into a space. And all that thoughtful regulation does is it enhances the flow of money to the people in the dev space, those teams that deserve the money. It eliminates bad actors. It brings more credibility to the space. It gets more people involved that otherwise wouldn’t. Case in point, again, BlackRock has 6.2 trillion under management. One bip of their assets is 20% of the current market cap of the Cryptosphere. Get that money into the space. Get it in front of intelligent dev teams that can do real good, and actually allow the tech cycle to catch up to this hype cycle, allow like middle class and other pockets of America that aren’t participating. Like, look, 8% are participating. If we could get that to 80%, that would be a dream come true. I don’t know if that ever happens, or how long it would take, but having regulation around it, it facilitates all these things. Some of the negative talk around regulation needs to totally stop, and people need to look at the fruits of good, high quality regulation, and look to Japan. Look no further than Japan as a very thoughtful test case of what true regulation can do the space as far as increasing the technology
Ateet Ahluwalia: to match the hype cycle, getting more actors involved, keeping good actors involved, and punishing bad actors. That’s something that we all really need to think about and be excited for, because it’s going to help the space. Thinking about it in terms of, “Oh, it’ll send Bitcoin crashing down.” It might, whatever. It might, but it legitimizes the space. And when you legitimize the space then you get the big players involved. When you get the big players involved, you get everyone involved. And it turns into the dream that a lot of people foresee it to be. That is the one catalyst that must be in place for any hopes, dreams, projections to actually come true. I want people to actually see it that way, and not see it as a negative thing. I see it only as a positive thing. The only other thing that I really think about is, the crypto space is incredible because it has a bunch of people that are working on different projects that are banding together in loose, informal connections in a much more mature fashion thinking that the much more Silicon Valley VC mentality of a rising tide lifting all boats. I can’t emphasize that enough. It’s going to increase the amount of high quality projects in the space, the amount of liquidity in the space, the amount of productivity in the space. I really appreciate that coming from a traditional finance background, which is more a zero sum game. I can’t stress that enough. It’s a beautiful thing. I hope that continues.
Clay Collins: That concludes this two part series with Ateet Ahluwalia of CoVenture Crypto. I created this second episode from the interview in part because the content didn’t thematically fit into part one, but also to tease Ateet in the first interview to folks who haven’t listened to it yet. If you’ve made it this far and enjoyed Ateet, you know what to do. Also, heads up that our next episode will be with Eric Meltzer of INBlockchain, the largest and most influential investment group in the Chinese blockchain space. To give you a sense of INBlockchain’s size and scope consider that they recently announced a $1.6 billion fund. When people talk about institutional investing, these are the kinds of numbers they’re referring to. It’s a fascinating interview. Stay tuned to listen to it next week. That’s it for this week. To sign up for our free crypto investing newsletter, listen to other episodes, or get the show notes from this episode, please visit Flippening.com. I also invite you to check out the start up that funds this podcast, Nomics, spelled N-O-M-I-C-S, at nomics.com. Finally, if you got value from the show, the biggest thing you can do to help us out is to leave a five star review with some comments and feedback on iTunes, Stitcher, or wherever you listen to podcasts. Thanks for listening and see you next week.