Anthony Pompliano Interview with Hedge Fund Trader Calls BitMEX Listings the “Kiss of Death”
Interview: Hedge Fund Trader Calls Listings the “Kiss of Death”
Cryptocurrency interest remains relatively high globally, despite the bearish outlook of the markets in 2018. Most cryptocurrencies continue to take a hit, losing money on all sides following the massive Bitcoin price crash that happened nearly six months ago. As the markets remain in perpetual freefall, the community looks to the steady economic hands of those who have been in the financial industry for quite some time to guide the markets into a more hopeful future.
Anthony Pompliano is a partner at the Morgan Creed Digital Assets, a major hedge fund based out of Wall Street. He sat down with another money manager named Travis Kling of the Ikigai Asset Management firm in an exclusive interview with The Daily Hodl. The interview saw some of the more bearish trends in the current crypto markets fleshed out and expanded upon, as these major money managers view with skepticism many of the coins now being listed and lauded as legitimate within the space.
Specifically, Kling outlines his belief that BitMEX is an incredibly problematic currency exchange that gives people the ability to scam with few consequences. Additionally, the pair discusses their beliefs on the future of the industry, as well as the regulatory situation that continues to unfold in the United States.
The “Worst Kind Of Liquidity”
During the interview, the topic of BitMEX came up relatively fast. Travis was excited to expand on the issue after it was brought up by his conversation partner. He stated that BitMEX is actually the “worst kind of liquidity,” despite the insistence of some that this liquidity will serve to benefit the overall cryptocurrency markets.
Kling outlined that BitMEX provides a horrible kind of liquidity because the market his being run by what he calls “his old world,” referring to the big and sophisticated investors on Wall Street. With hundreds of millions of dollars and state-of-the-art computers behind them, these whales can take advantage of super liquid markets to influence prices and artificially inflate/deflate things to their own profit.
He brought up that these major quantitative investors are doing what is referred to as “liquidity modeling” on exchanges with liquidity like BitMEX. When this happens, he says that the traders are able to call the network so many times that they gain access to price data on a very, very small time increment. Using this, the quantitative traders are able to maximize profits.
Bad For The “Long Term Health”
The Wall Street pros were quick to recognize that it isn’t very surprising, what is going on within the BitMEX structure. For the average retail trader, all they see is the quick price increase in a few minutes. But to the quantitative trader that has access to price data up to the millisecond, it is painfully obvious that companies are taking advantage of the liquidity of the system.
While this may be good in the short term, especially for BitMEX, these speakers were clear in their belief that it will hurt the community in the long-term. Though he was certain that something bad would happen as a result of the ongoing market manipulation by whales, Kling said that he did not know what is “going to happen” in the long-term future—but that it would be bad.