Gone Crypto: Tradfi veterinarian, who founded the crypto hedge fund, talks about the future of space

Gone Crypto: Tradfi veterinarian, who founded the crypto hedge fund, talks about the future of space

A 30-year-old Wall Street veteran with a Ph.D. In Finance, investors are now focusing on a risk -adapted engagement in crypto.

ck Zheng left the Credit Suisse last year to participate in a crypto hedge fund.

after working for the first four years of his career in retail with interest rates at the Bank of America and the Susquehanna International Group, Zheng switched to Morgan Stanley for five years, where he was Executive Director of Valuation Risk Management.

he came to Credit Suisse in 2004 and spent the next 17 years as Global Head of Valuation Risk of the financial services giant. There he led 150 employees and concentrated on the risk and evaluation of private equity, mortgages, fixed-income securities, stocks and derivatives.

"As I see it, Krypto is another up-and-coming investment class, and I think that there are many interesting ideas that can combine traditional finances with the crypto room," Zheng told Blockworks.

Zheng noticed that he realized for the first time last year that Krypto would "stay here" and "boom" for the coming decades.

crypto received more media reporting in 2021, he noticed, and there was a "snowball effect" that more people took part.

Bitcoin reached an all -time high of around $ 69,000 last November. The asset last week recorded the worst daily decline in four months and was rated around $ 32,900 on Monday morning.

Nevertheless, many believe that crypto is a fraud, said Zheng and referred to Warren Buffett's recent comments. The CEO of Berkshire Hathaway said at a shareholder meeting that he would not buy all the world's bitcoins for $ 25.

"If you only think of the old approaches, miss the new things," said Zheng.

"If you think of a big investment return, you really have to think of the long -term trend and see where this trend leads, not today, not tomorrow, but in 10 years."

ZX Squared Capital was developed for traditional and crypto native investors who want an engagement in crypto, but do not want to endure the volatility of the asset class.

The fund uses quantitative strategies with options and futures to reduce the volatility of its portfolio to a level between 30 and 40 %, Zheng, compared to the current volatility of Bitcoin, between 80 % and 100 %.

Zheng founded the fund together with Felix Xu and Yemu Xu, the CEO or co -founder of the decentralized financial product provider (DEFI) Bella Protocol. The combination of her crypto-native mind with Zhengs Tradfi knowledge was the key to ZX Squared Capital, said Yemu.

"When [Zheng] brings this profound experience to the crypto room, I think that will be enormous," he added. "Risk management is something that we keep in mind."

The fund's fundraising destination is $ 200 million in 2022 and $ 1 billion in 3 years.

tradfi versus crypto

While many of Zheng's former Tradfi colleagues are interested in blockchain technology, the manager found that the market capitalization of crypto with almost 2 trillion US dollars is still less than that of Apple.

"The reality is that traditional finances are 100 times larger than crypto," he said. "A majority of people are interested in stocks, loans and fixed -interest securities, and there is still a lot of money to make."

Although regulatory and compliance concerns continue to prevent some investors and financial companies from being committed, Zheng said that he was confident that governments will work together with Tradfi and crypto companies in order to pave the way for stronger acceptance.

as an example of a large finance player who "rolled up the sleeves", he referred to Goldman Sachs, which in March carried out an out-of-the-counter (OTC) crypto transaction with Galaxy Digital. He expects competitors like Morgan Stanley.

Wall Street companies will be involved in segments in which they can be profitable, said Zheng and added that crypto derivatives could be a good goal for traditional institutions.

"Today you look at shares, you look at bonds and the many other investment classes - they are either fully rated or overrated, and there is great concern about the Fed's tightening cycle," he said. "So people have to think about where they invest their assets and how they invest in the future."

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The contribution Gone Crypto: Tradfi Vet Who Started Crypto Hedge Fund Talks Future of the Space is not a financial advice.