1/ When spot BTC ETFs are listed (I’m with others who predict by Q2 2024):

-BTC futures-backed ETFs will lose flow
-counterintuitively US BTC futures open interest will increase
-basis trading efficiencies will significantly improve for US institutions 2/ A common commodities trading activity for speculators, arbitrageurs, and hedgers is to take position in the basis (long spot / short futures, or the reverse).

1/49 Many have asked questions about my time at FTX US and why I left when I did. As I indicated earlier this week, I’m happy to begin sharing my experiences and perspective publicly. 2/49 I worked at FTX US for seventeen months. When my resignation was made public, those unfamiliar with my plans were surprised, and some questioned whether I’d been fired. It seemed as though I’d left a dream job abruptly after a very short tenure.

1/ DeFi 2/ There are many companies, founders, builders, and investors currently working (some in stealth) to make DeFi infrastructure and applications easier, simpler, and more useful.

1/ There is an order type that’s frequently used in equity markets but conspicuously missing from crypto exchanges: the midpoint peg. 2/ The midpoint peg order is guaranteed to be executed at a price no worse than the midpoint of the best bid and offer, and also no worse than the limit price if one is entered. The order itself is hidden and therefore does not show up in the order book.

1/ An announcement: I’m stepping down as President of @FTX_Official. Over the next few months I’ll be transferring my responsibilities and moving into an advisory role at the company. 2/ I have deep gratitude for my experiences at FTX in the last year and a half:

1/ It's not widely understood outside the industry how prolific software developers need to be at successful trading firms and quant hedge funds.

The tech involved, comments on developing software at Jane Street, and differing approaches to software between finance and big tech: 2/ The core of any successful automated trading operation involves software in three main areas:
a) pre-trade
b) trade
c) post-trade

1/ US equity options microstructure, wholesalers, and advantage 2/ In the PFOF/wholesaling discourse, options microstructure tends to be discussed less frequently than equity microstructure, but it’s just as important and involves even more complexity.

1/ Reports on token ownership concentration and DeFi transaction volume often come to incorrect conclusions when centralized exchange hot wallets are involved. Here’s some background on how exchanges typically operate these wallets: 2/ A centralized exchange functions as the custodian for all customer assets. Trades between two counterparties can occur and settle instantaneously by using an internal ledger, only interfacing back with blockchains when customers deposit and withdraw.

1/ Next week is the deadline for the SEC to decide whether to reject @Grayscale’s application to convert GBTC into an ETF.

Here are the main reasons why it would be inconsistent *not* to approve GBTC and other spot bitcoin ETFs. 2/ (1) The SEC has already approved BITO, the Proshares ETF based on a basket of CME bitcoin futures, and other similar futures-based ETFs.

1/ Some things that could slow market contagion and quicken recovery:
-clarity from US regulators
-more robust US crypto futures and options markets
-US spot crypto ETFs 2/ Regulatory clarity for US crypto exchanges and other digital asset providers would instill confidence for US institutional investors to continue betting on the long term viability of the assets.

1/ Observations from ftx.com/exchange-stats on a large market-down event such as the last 24 hours: 2/ Retail were net sellers, institutions were net buyers, *but the institutional buy-vs-sell imbalance was negligible, not statistically significantly different from normal days.*

1/ Every interview I've watched (or done) recently includes questions about apparent correlations between stocks and crypto, usually amid discussion of whether crypto is (1) a good inflation hedge, (2) a portfolio diversifier, (3) an independent store of value. 2/ Asset correlations can arise from a variety of underlying phenomena. Correlations are not static, and may or may not be intrinsic to properties of the asset themselves. I think about correlations falling into one of three main categories:

1/ FTX US has no imminent plans to propose physically settling agricultural products under our margin model.
ft.com/content/295a66… 2/ In a hypothetical future in which we did, hedgers such as the agricultural groups described in this article could continue using FCMs under the traditional model on existing CCPs if they prefer.

1/ The practical importance of crypto derivatives 2/ If one of the main purposes of a financial market is to allow for the expression and transfer of risk, the presence of derivatives is critical.

1/ How retail stock trading apps generate revenue and some comments on choosing a model for a new stock trading app 2/ A retail stock brokerage can earn income from users’ trading through three main methods:
a. charge commissions/markups
b. receive maker rebates from exchanges (or taker rebates on inverted exchanges)
c. send orders to market makers that provide payment for order flow (PFOF)

1/ Cannabis and digital assets 2/ Though cannabis is legal in IL (@FTX_Official's US HQ) and many other states, marijuana-related businesses (MRBs) are effectively underbanked. This is because:

How crypto exchanges enforce US sanctions: 1. We collect identifying information of every user, including name, DOB, phone number, SSN, and photo ID. We cross-check the info against govt databases to ensure veracity (e.g. name matches SSN). If we can’t verify an identity, the user is rejected and prohibited from trading.

1/ One of our goals at FTX is to make our services accessible in as many ways as we can. While our users access FTX directly to trade crypto and NFTs, there are also a number of apps that whitelabel additional FTX services. It’s free and easy to integrate FTX services into apps! 2/ At its core, FTX is a set of backend services for payments (fiat deposits and withdrawals), crypto wallet management, exchange matching engine and conversion, NFT marketplaces, KYC/AML, and more.

1/ FTX US has a significant feature that separates it from other US exchanges: fiat USD and USD stable coins are treated as fully interchangeable. This makes it easy to convert between USD and USD stable coins, and helps consolidate order book liquidity.

Here’s how it works: 2/ FTX US allows users to transfer fiat USD to the exchange using wire transfers, ACH, and credit cards. Any deposit using these methods will result in a balance increase in the USD wallet.

1/ Within the last six months:

-@ftx_us acquired @ftx_us_derivs (formerly LedgerX)
-@CBOE began acquiring @ErisX_Digital
-@cryptocom began acquiring @Nadex + @small_exchange
-@coinbase began acquiring @thefairxchange 2/ All the acquired targets have DCM (Designated Contract Market) licenses, whereas all the acquirers but CBOE previously did not. DCMs are exchanges that may list derivatives (e.g. futures and options) for trading by US customers.

1/ Blockchains by design are immutable, irreversible, append-only transaction logs. Mistaken transfers are a natural result of this, pervasive, and in aggregate very costly. Here are some thoughts on the nature of the problem and potential technical solutions (mostly for DeFi). 2/ FTX frequently receives requests to help reverse accidental transfers, such as ERC20 token transfers to SPL addresses, or NFTs sent to our exchange hot wallet instead of users’ individual wallets.