The Perpetual Swap in Cryptocurrency

In this episode I speak with Sam Trabucco from Alameda Research. Alameda manages over $100mm in digital assets and trades between $600mm and $1.5bn per day.

We begin our conversation with a discussion around the features that distinguish crypto markets from traditional markets. What becomes a recurring theme in the conversation is how decentralization and fragmentation present both an opportunity and a challenge.

Sam provides some color into the easiest and hardest alpha he’s earned, including exploiting a spot arbitrage with a US dollar, Bitcoin, and Japanese Yen triangle trade. But not all trades are that complicated: sometimes, it’s just buying Dogecoin when Elon Musk tweets about it.

We spend the back half of the conversation discussing operational issues such as managing collateral, block-time versus clock-time, transaction costs, exchange risk, and regulatory risk. For a highly systematic team, Alameda spends a good deal of time trying to qualitatively judge where the juice is worth the squeeze.

I found this chat to be incredibly insightful into the world of crypto trading, and I hope you do too. Please enjoy my conversation with Sam Trabucco.