Do not expect cryptor trends in the style of 2021, says Dexterity Capital

Do not expect cryptor trends in the style of 2021, says Dexterity Capital

Michael Safai from Dexterity Capital believes that every market -neutral cryptocurrency company will shake off the effects of possible upheavals in the industry.

In an interview with Blockworks, he said that the own trade company based in London was confronted with the effects of liquidity that was sucked out of the market, and his business had to adapt.

"It was hectic. Many things broke that we would never have thought that they would break, and we didn't think these lenders would go down as they did. We did not think that Three Arrows Capital (3AC) would implode as they did," he said and referred to the collapse of top-class crypto creditors Hedgefonds 3ac was caused.

3AC, which was invested in a number of problematic crypto projects, was in arrears for loans of several million dollars than the prices for crypto systems collapsed on May 9 after the collapse of Terrausd (VAT). When the company did not make the loan repayments, the lenders were forced to freeze withdrawal in their networks, which triggers widespread concern about the networking of the industry.

"When May came, everyone thought, the sky collapsed and did not know whether they would be there for a quarter of a year. People were scared," said Safai. But he believes that this is slowly changing, as the investors gradually impose factors in the air.

"The war in Ukraine continues, but it is now a well -known size. The macrouumbic field is a much more unknown size because it is as much inflation as we experience and still survives.

Practical short -term expectations

skill, the cryptocurrencies between 2 billion and 4 billion dollar of the year until Terra crashed a good performance. Since then it has become quiet.

"We carry out algorithmic marketing strategies, which means that we achieve a lot of volume. We acted over a trillion [dollars] last year. We feed on the volume, and therefore a decline in volume is not good news for us," said Safai, who described the market exploitation as the "third really big bear market".

In addition, the collapse of the crypto loans not only affected the mood of the investment, but also affected the trading volume on the large crypto exchanges.

"The good news about us is that, since we are market neutral, we are not exposed to the price of cryptocurrency plants. So the drop in prices itself was not bad for us," he added.

A market-neutral trade strategy implements the execution of long and short positions. Such trades make the best of the diversification that is used to protect against market returns.

Safai considers it not reasonable to have high expectations of the trading volume and to enjoy the enthusiasm of the bull run in 2021.

"Last year was such a great year for everyone. Our expectations are somehow unreasonable now. But they are better than in 2019 in terms of our returns. They are probably better than in early 2020. So we are fine," he said without naming.

"Anyone who only goes long or makes a basket full of coins will not kill at the moment. People like us who are market -neutral or real alpha will be okay," he said.

dexterity announced Blockworks last year that it wanted to double its number of employees, but it has now changed this goal. The company, which currently counts 17 employees, is planning to slow down slowly.

"We are hardcore engineers or quantitative traders. So while we are still growing, we are not planning any doubling this year," he said.

The link between tradfi with crypto could be a good bet

builders could have a real chance in the current crypto market environment. According to Safai, infrastructure builders in particular are good risk capital investment. This is because these companies are likely to be picked up as soon as the market enthusiasm for crypto returns.

"In view of the kind of mistakes that have occurred in recent months, people think that regulation will become stronger, which means that Tradfi players who already have all licenses are well positioned if they have the technology," he said.

"When I am an investor and see a good team that builds something in the infrastructure or connects Tradfi with the crypto world, I think that is a good bet."

Safai expects to rethink crypto loan for the future, how to deal with risks and think more about whom you will give loans because the room was not as developed as it should be.

"You will be much more shy to make underpassed or prolonged loans. And you just have to become smarter."

he suspects that the market will be sluggish for a while and will not change in the foreseeable future.

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The contribution Don’t Expect 2021-style crypto returns Anytime Son, Says Dexterity Capital is not a financial advice.