Hyperliquid Fee Increases, Exchange profitability and a thread about the reason we purchased over $1,000,000 of 40/60 Hype Call spreads with a payoff of over $11,000,000+ Hyperliquid fees are increasing around 30% across the board.

This may sound like a lot, however it's still cheaper than most other exchanges, especially when factoring in the staked HYPE discounts.

Let's take a look at some comparisons (Binance, Bybit and Hyperliquid).

I don't think it's China selling, or a big global player dumping bonds.

Unsure if people in crypto are aware but essentially large TradFi hedge funds are basically long their own version of USDe via synthetic treasury basis trades

Pic related: from @matt_levine at money stuff

Most traders get rekt on moves like this as their portfolio is all correlated and inflexible.

Whenever you take risk, you should offset the beta with a reciprocal hedge.

When longing an altcoin, consider shorting another altcoin that you think will go down more and up less. If you are fully allocated and you are deployed with no cash, and no shorts, even if you don't get liquidated you're missing the opportunity of average down high conviction bets or have additional shots on goal to try and close the bottom with your short legs.

Flexibility.

One of my funds main holdings this year has been $BNB

BNB is typically regarded as quite a boring asset, but when you take a look at historical performance YTD and a more favorable regulatory landscape under a probably Trump administration it is a braindead core holding.

The chart also looks primed to squeeze upwards. It's no secret that Binance is one of the most profitable companies on Earth. They had recently posted that they've done $17.3 Trillion in Perpetual Swap volume since 2018. This amounts to around $51B in revenue at assuming a 3bps average monetization per order. Insane.

Prediction thread 2024 (Will add over time):

#1 @Bybit_Official becomes top exchange by volume temporarily and the centralized exchange landscape shifts significantly. @Bybit_Official #2 Blackrock ETF gets approved and does more volume than expected (5B+ ADV), this results in a blow off top and cannibalization of institutional flow from large Crypto only OTC desks which close down shop.

A brief history lesson and what we can learn from the past:

The creation of the CFTC and succession of regulatory authority over cash settled futures (which have become the dominant product in global finance) has always been a black eye for the SEC. Let’s flashback to 1974. In 1969, Leo Melamed, chairman of the CME, decided to challenge a decades-old law classifying Futures trading as gambling. Through Texas Dem W. R. Poage, then chair of the House Agriculture Committee, they created a new futures regulator, the Commodity futures Trading Commission.

During 2020 at the start of the bull run, BitMEX was hit with allegations of BSA violations, under past (2017-2019) market dynamics price would have been off by -10%+, but instead the market was actually flat that day and up that week. Feels eerily similar to this nance news. It was a pivotal day, as the expectation was that we would nuke, and instead went up substantially. We later learned that it was due to Microstrategy buying. Based on price action following the Binance news, could there be a large bidder who regardless of news, wants Bitcoin?

I see a lot of traders suffering from a psychosis due to this rally that we saw a lot in 2019 during the 3k to 12k rally. Traders constantly index themselves to their high watermark in both USD and Crypto notional which impacts their ability to stay unbiased. This is due to a combination of losses during the drawdown (which was substantial on most assets) as well as getting robbed by FTX. This makes it very easy to "hope" for crypto assets to go down so you can reach your ATH balance for ETH, Bitcoin or whatever you index against.

In future market cycles, whenever we see leadership of large companies (FTX, DCG, Celsius) make horrendous PR blunders, questionable business choices, and hand wave away criticism because we’re all too busy getting rich, we should not point and laugh but instead press for better It goes without saying and hindsight is always 20/20 but if we’re going to attempt to self regulate, collectively we have to be better about allowing people who are not extraordinarily pro crypto from reaching top level positions in our industry.

I think given the ETHBTC price action it's pretty clear someone had a large ETHBTC position. It's very possible and likely in my opinion that alameda created a massive asset mismatch by borrowing customer assets, selling them and longing ETH. From the group of people who are stuck on FTX a lot of the withdrawals that were not processing for THREE days were large BTC withdrawals.

Does CZ go for the killshot here? Announce ZERO trading fees, starve out FTX & Alameda and make it balance sheet war.

Can even do client deposits bonus's for funds coming from FTX wallets completely drain their volume. Liquidity begets liquidity. Then, after FTX volumes are crushed, sentiment ATL... you finally put in the bid and create a rift with existing investors in FTX by offering a significantly above market proposal. Sam will not take it and his money funnels dry up.

We buying bank?

coindesk.com/business/2022/…

Everything is a bridge. The sooner you realize this the sooner you'll understand they are critical infrastructure in the Crypto Ecosystem.

Even stables are just a bridge between traditional finance and crypto, you give one USD and you get one USDC. Pre-DeFi, bridges allowed for the reduction of entropic forces allowing people to seamlessly move from traditional finance to Crypto and hold senior claims on cash deposits.

These businesses like USDC, Tether and others have grown considerably since 2017.

I see a lot of tweets from up and coming CryptoTwitter accounts giving advice about “how to make it” and “Alpha”. In general, the majority of these threads are the same redundant garbage and engagements baits with positive attitudes talking about how WAGMI and other nonsense. 1/N Most of the time, these accounts don't even have 20 ETH to rub together, much less the credibility or ability to give sound financial knowledge to the average Crypto pleb.

Okay haven't done this in a while so let's try this out

Let's talk about edge

Thread: So everyone CT loves to brag about their edge, or complain about their lack thereof. Let’s do a quick refresher into what edge is.

Edge is most commonly used by traders to vaguely describe what their perceived advantage over the market is (or to justify their gambling habits).

Thread:

There is no magic indicator, person, paid group or system that can transform you into a consistently profitable trader. Every indicator that has been made was made by someone for THEMSELVES, they used it to fix or enhance a certain aspect of their trading system/style. People ask what type of set up I use, what indicators I'm using, targets etc. This approach to trading, trying to merely copy someone elses style of trading will always lead to inferior results. There are a multitude of factors especially in a 24h market that effect your system.

When you have a bunch of winning trades, and you start rapidly increasing your position size... that's when you set yourself up for a massive loss. Instead of double and tripling your position size or leverage, increase your position size in increments 5% or 10% during runs. This will help you ease into trading larger sizes. Trading 100k contracts is very different from trading 1MM contracts. Having to account for slippage, liquidity, and other nuances that come with larger positions is best learned gradually as opposed to losing big on one trade.

Thread:

What is a Market Maker?

There are a ton of idiots on twitter who believe that every single movement of bitcoin is dictated by one single entity. While this could be true, this is not what a market maker is! Market Making is the process of quoting continuous passive buy and sell prices to provide liquidity. On BitMEX market makers post two-way quotes on various products. Market makers are DELTA neutral, they don’t have an outright market view.

I get a ton of questions about why I trade on Bitmex.

In this thread I'll give a couple advantages that Bitmex boasts over other exchanges. First and foremost is liquidity. Due to the amount of leverage offered at
Bitmex and the incentives for market makers to trade on the bitmex platform, bitmex has unrivaled liquidity. You can market sell and buy hundreds up bitcoin with less than 1% slippage.