Crypto Trading at a prop firm
Curious to hear what peoples opinions are on crypto trading desks at prop trading firms. Regardless of the future of crypto and blockchain tech, there is still a ton of money to be made making markets and speculating on crypto. Does anyone have any insights into crypto desks at the big prop firms, are they good places to start a career? Do these desks have a bright future/good opportunity? any idea of comp/performance on these desks?
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I think there is a significant difference between a crypto trading desk of a tradfi prop trading firm and a crypto native prop trading firm as established prop trading firms tend to have good risk management while it seems many crypto native firms had poor internal controls and risk management. If a tradfi trading firm is still expanding its crypto desk in early 2023 they are likely bullish on crypto and committed to the space as well. As crypto matures my personal guess is that similar to other maturing markets more established firms will continue to do well and expand assuming the crypto market stays at a similar size or grows. I see a few relatively unique risks in crypto though:
(1) high levels of regulatory risk like SEC deciding most existing crypto products are unregistered securities and really cracks down on them (mostly but not entirely a US specific risk)
(2) substantial counterpart risk such as the FTX collapse. This also leads to inefficiencies as it becomes risky to put lots of capital into pursuing "arbs"
(3) for crypto native firms I think there is elevated risk the firm is fraudulent or otherwise blows up which could make finding another job difficult
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