Q&A Ex Investment Banker now (semi) retired from crypto trading
Used to be an active user of this site back in my banking days, so after a rollercoaster of successfully trading the crypto markets I thought I'd do a Q&A if anyone is interested. I worked in IB for a couple years (I absolutely hated it and was not particularly good at it either) before getting a job in crypto and then ultimately quitting that to trade my own capital.
I'm in my high 20s now and have averaged around ~$2.5 million a year the past 5 years, mostly through trading derivatives. I don't say this to brag (in crypto circles this isn't remotely close to the top guys), just to give you guys an idea of what can be attainable in unconventional fields like this. Happy to answer any questions about getting into crypto, about the market in general, or even quitting your job in general to pursue something like trading.
It seems like you're referencing a Q&A from someone who transitioned from investment banking to crypto trading and has been quite successful in trading derivatives. Based on the most helpful WSO content, here are some key takeaways and advice that might align with your interest:
Transitioning from IB to Crypto: Many professionals have shared that moving from traditional finance to crypto can be a lucrative but risky leap. The skills from IB, such as financial analysis and market understanding, can provide a solid foundation for navigating the volatile crypto markets.
Trading Success: Averaging ~$2.5 million annually through derivatives trading is impressive, even if not at the top tier of crypto traders. This highlights the potential of crypto markets for those willing to take calculated risks and develop a deep understanding of market dynamics.
Quitting Traditional Roles: If you're considering leaving a traditional finance role for something unconventional like crypto trading, it's crucial to have a clear plan, sufficient capital, and a strong risk management strategy. Many on WSO have emphasized the importance of tracking trade ideas and performance meticulously, as this can be a key differentiator in building a successful trading career.
Challenges in Crypto: Starting and growing in the crypto space comes with its own set of challenges, including market volatility, regulatory uncertainty, and the need for constant learning. Engaging with communities, staying updated on market trends, and networking with other professionals in the space can be invaluable.
If you have specific questions about this transition, trading strategies, or the crypto market, feel free to ask!
Sources: Q&A: ex-bank trader now running crypto hedge fund. questions?, https://www.wallstreetoasis.com/forum/trading/i-am-a-trader-at-an-investment-bank-ask-me-mostly-anything?customgpt=1, What to do about my Analyst who won't stop trading Crypto?, https://www.wallstreetoasis.com/forum/investment-banking/quitting-ib-now-what?customgpt=1, BB Analyst Impacted By Layoffs - Looking for Insight
Thanks for doing this! I have a few set questions below.
1) How do you start learning about crypto? What are the best forums, guides, or credible sources to read? There's so much false information out there on random reddit forums with guys just spewing pump and dump schemes. Also, I find a lot of the information way to high level that only discusses industry trends (e.g. VC firms that hype up the industry to promote their companies) or extremely technical and impossible to understand for most people. I've tried reading white papers on coins but it goes way over my head. I'm above average intelligence but definitely not some math genius who could have created these things.
2) What was your journey starting out in crypto? How did you learn about crypto derivative trading strategies? How much capital did you start out with and what's the minimum capital require to actually generate any meaningful returns? Is it even worth dabbling in if you're only playing around with $5k or $10k? Did you starting trading while working your full time job?
3) What do you recommend for something starting from scratch? Should I spent a significant amount of time learning first or is it a learn-by-doing kind of thing? What platforms do you use?
1.) Twitter has been the best resource in the past but is getting increasingly noisy. Following high signal accounts and reading their tweets even dating back years can provide a ton of alpha (search for accounts such as Gigantic Rebirth (GCR), Cobie, and High Stakes Capital and read their tweets/follow who they follow. This can be helpful but only real way to learn is to immerse yourself in investing/trading it. The "meta" changes constantly and what worked 6 months to a year ago doesnt necessarily still work because of how fast the market moves. On the technical side - making money trading crypto is much less about understanding fundamental technical stuff related to blockchain and more understanding market psychology and how markets move (at least in the short term). Most people dont succeed in crypto because they arent smart enough, but because of emotional swings of the volailtiy.
2.) Started with like 10k signing bonus from my first banking job. I know guys who started with even less. If you have low capital look into airdrop farming, there were some recently (such as hyperliquid) that took guys portfolios from 5-6 figures to 8 figures off the airdrop alone. I traded for years while at my job before quitting. I'd highly recommend not quitting until you have a big safety net and years of consistent profitability. The stress that comes from needing to trade to make rent will make you make bad decisions.
3.) Learn while doing, focus on new ecosystems and try everything out. AI/Crypto is probably where you want to focus since its so new and many of the coins don't have the liquidity for big players to enter (meaning more edge for smaller accounts)
did you get into $TRUMP?
crypto derivs, like ox.fun?
are you screening on x.com/dexscreener/telegram bots?
are you only trading? do you have any desire to like build out the crypto ecosystem infrastructure?
did trump releasing $TRUMP/MELANIA destroy the entire altcoins bull thesis
Unfortunetely not, but i shorted Melania all the way down. Biggest scam ive seen
Can you talk about your first job in crypto and how that maybe helped your knowledge of the space from a markets/trading perspective?
Also on derivatives, my understanding is you can’t purchase in USA - if I’m wrong mind sharing where there are open derivs mkts?
For context, I’m 5ish years into my career (not IB, more markets / equity research type role). Have been dabbling with trading crypto while working in past year and thinking of exiting to a crypto related role so would love to hear more about your journey!
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Responded to this and it was taken down for some reason.
Youre right, centralized exchanges technically don't offer derivatives to US citizens yet, but decentralized ones such as Hyperliquid allow anyone to trade there and have plenty of liquidity. This should change under Trump though - Coinbase plans to offer derivatives and I'd think that those would eventually be available to US citizens.
I dont want to get into the details of my job because of how small the industry is and dont want to be doxxed, but i will say that when looking for a crypto job be very selective. During bear markets (which will continue being extremely brutal and occuring regularly in crypto), most of these crypto jobs lay everyone off. Crypto unlike most other industries is very rewarding to independent traders, devs, builders. You will make more doing your own thing than working for someone else within it (exception would be if you got token equity at a unicorn protocol). I'd consider doing it on the side while working in tradfi because you'll get a lot of the upside while still having a safety net
Really appreciate you doing this. I’m an exited startup founder and want to use some of my proceeds to get into trading.
I’ve lost in the mid 5 figures already from being liquidated on DYDX a couple years back lol, but now I feel like my discipline is much stronger.
Do you exclusively trade perps? Or any meme coin stuff with alpha insider knowledge ?
I'd say 95% is perps because it is much more scalable (and interesting, I find it much more intellectually stimulating than the on chain game which is all about being well networked, a grinder who is spending all day scanning pairs, tracking wallets, etc. or having some obscure edge and intuition). During market euphoria though (we had this directly after trump won) there is nothing more asymmetric in the world than being on chain. Some of the big winners from the trump token for example turned low six figures into mid 8, and in a few cases 9 figures on that one trade. Insanity.)
I would love to pick your brain. What got you interested in trading? A drive to make more cash or passion?
Initially making money but that quickly turned into a total obsession with markets and trading. Its the ultimate game
$TRUMP/$MELANIA just showed narrative > fundamentals. Altcoin bull thesis isn’t dead, just shifted.
fundamentals are a meme in crypto
What is your future outlook on where the industry is headed?
Increasingly adopted by tradfi, majority of altcoins today die while BTC remains in long term uptrend.
Ai, universal basic income, and government printing fuel next cycle
Thanks for the info.
Given the likely death of the altcoin market, how do you see the industry/market structure evolving overall?
What major jobs are there in crypto right now? I would like to look into them and see if I could learn at one and then spin it into my own trading
Where would you recommend getting started if I know. Absolutely. Nothing about investment banking/finance ? I’ll be starting my first semester. As a freshman at a pretty good and competitive university in a few months. And I want to hit the ground. Running in order to be able to land roles in clubs and internships.
Crypto and IB have very little in common and the kind of people that succeed in each have very different personalities. I for example was a very mediocore investment banker before turning to trading. I'd spend more time looking into the different areas of finance first and figure out which best suits you and your interests. if its crypto then the best way to learn is from experience, so i would buy some btc (having skin in the game will make you pay attention and learn) and immerse yourself in crypto. there is really no set guide
What is the differences in personalities that succeed in these two fields?
Couple of questions here. You said you have been making ~$2.5m a year for the past 5 years which puts you in the top percentile of traders. Assuming that this is only possible by taking huge asymetrical derivatives (perps), how do you trade perps? are they not blocked for all US retail traders?
I trade on bybit primarily by using a VPN and Palau ID. Palau is a loophole some of these exchanges do to get around US regulations. I also trade on hyperliquid (non kyc and easy to access with VPN) to mitigate the counterparty risk of having funds on bybit. Worth noting that these regulations are likely changing under trump admin so ill move to coinbase to trade perps eventually once they have it in place
Appreciate the response. I am currently in a similar position you were in before you started scaling this. Can I please pm you to ask some more questions and hopefully learn from you?
Great post Monopoly. Were you day trading perps using technical analysis or you were more focused on the mid to long term (i.e., a fews weeks to a few months). Curious to hear more about your perps trading strategy if you don't mind. Thanks!
TA is probably 20% or so of what i look at. I think people in crypto generally put too much weight on it but it can be helpful at times. And mostly medium term. Short term has had a lot of noise this year from headlines/trump. Dont want to go into too much depth on the trading strategy but a lot of it is intuitive, flows driven, and from understanding all of the unique quirks to the crypto market from following it 20,000 hours+
Amazing journey! I'd love to know more about how you handled risk early on and how you went from IB to full-time cryptocurrency trading!
Sounds like you should be doing a course or mentorship program!
Congratulations on taking the leap and succeeding outside of IB; that's incredible.
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