Chris Cecere, GP and Head of Global Macro and Trading at Asymmetric, shares insights into the volatile crypto market. He discusses the yen carry trade's role in recent sell-offs and the Fed's missteps regarding interest rates. The conversation also sheds light on the SEC's crackdown on Ripple and its implications for the crypto landscape. Additionally, Cecere reflects on the upcoming signals from Jackson Hole, touching on economic disparities and the ongoing drama surrounding the custody of wrapped bitcoin.
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insights INSIGHT
Yen Carry Trade & Market Volatility
The Yen Carry Trade, where investors borrow Yen at low rates to invest in higher-yielding assets, doesn't directly impact tech stocks or the VIX.
However, the simultaneous unwinding of these correlated positions triggered a market-wide deleveraging event.
question_answer ANECDOTE
Delta Replacement Strategy
During the market volatility, Joe McCann and Chris Cecere used a "delta replacement" strategy.
They sold spot assets to limit potential losses and bought call options to capitalize on a potential market rebound.
volunteer_activism ADVICE
Navigating Market Volatility
Wait for the market to stabilize after extreme volatility events.
Don't try to perfectly time the bottom, but avoid panic selling and be prepared to buy when signs of reversal emerge.
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In this episode of Bits + Bips, hosts James Seyffart, Alex Kruger, and Joe McCann sit down with Chris Cecere of crypto investment firm Asymmetric to make sense of the latest market volatility and the factors driving it.
From the impact of the yen carry trade and the Fed’s controversial decisions on interest rates, to the potential signals coming out of Jackson Hole, the discussion cuts to the heart of what’s moving the markets. The group also dives into the SEC’s crackdown on Ripple, the ongoing drama surrounding wrapped bitcoin (WBTC) custody, and whether the Biden-Harris administration is genuinely considering a “crypto reset” or if it’s just political posturing.
Show highlights:
00:00 Intro
02:05 Whether the yen carry trade is to blame for the recent market sell-off and the concept of Value at Risk (VAR)
09:25 How Asymmetric handled the volatility of the sell-off using a strategy called “delta replacement”
14:17 Why the Volatility Index (VIX) spiked and whether it could do so again
22:21 Why Alex thinks that unemployment numbers started a panic and what the Sahm rule is
27:24 What might have triggered Jump Trading's sudden liquidation during a massive market sell-off, and whether more funds will face similar pressures
31:15 Why the market and major banks like J.P. Morgan agreed that the Fed missed the mark by not cutting rates in July
41:36 What key signals the Fed might send at Jackson Hole about the future of interest rates and the winding down of quantitative easing
45:40 How significant the timing of the first rate cut is in determining whether it will be bullish or bearish for the markets
53:45 What Ripple's lawsuit settlement and the SEC’s subpoenas to VCs mean for the broader crypto industry
58:13 Whether Harris will actually do a “crypto reset”
1:03:04 The drama surrounding the custody of wrapped bitcoin (WBTC)
Hosts:
James Seyffart, Research Analyst at Bloomberg Intelligence
Unchained 