OI14: Behind the Scenes of a Crypto Hedge Fund ft. Michael Hall & Anatoly Crachlilov

In this episode, Moritz Seibert speaks with Anatoly Crachilov and Michaell Hall from Nickel Digital, a prominent London-based crypto hedge fund. Anatoly (CEO) and Michael (CIO) founded the company in 2019 with an initial focus on in-house arbitrage and basis trading strategies. Over the years, their business model has evolved and adapted to the fast-changing world of digital assets. Today, Nickel Digital operates as a multi-strategy, multi-manager setup with more than $250 million in AUM, making it one of the largest and longest-standing crypto hedge funds globally.

Anatoly, Michael and Moritz speak about the opportunities and challenges of operating a multi-PM digital asset hedge fund, how they differ from traditional asset hedge fund pod shops, and how the attract and find new PMs to work with them.

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Episode TimeStamps:

02:13 - Introduction to Nickel Digital and how they found their way to crypto

08:10 - A trip down memory crypto lane

12:25 - Why is the basis still so wide on crypto?

15:07 - The state of alpha in the crypto space

18:23 - What kind of portfolio does Nickel Digital run?

19:56 - How they take advantage of automation to carry out a 24/7 365 trading strategy

22:24 - How they manage the managers

25:22 - How they approach netting cost

27:40 - Their process for paying managers

30:59 - Their manager onboarding process

38:41 - Why traders make more money at Nickel Digital than anywhere else

40:52 - What is the average sharpe ratio in the crypto space?

43:19 - The tech backbone - how Nickel Digital is connected to exchanges

46:08 - FTX collapse - The most stressful period for their business

49:46 - How they manage price and risk in 24 hours/day markets

54:06 - How crypto differ from regular markets

57:09 - The pitfalls of trading crypto

01:02:35 - What is their long term vision for Nickel Digital?

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