QCP Capital & Crypto Derivatives Investing in the Asia Pacific with Darius Sit
Darius Sit from QCP Capital shares the key takeaways in how crypto derivatives and hedge funds work in Asia.
Fresh out of the studio, Darius Sit, founder of QCP Capital, joined us in a discussion on the crypto hedge fund and an overview of the crypto derivatives space in the Asia Pacific. Starting with his background in derivatives training, Darius shared how he entered into the crypto space and explained the key concepts behind crypto derivatives trading. He dived deep into the digital assets segment specifically in the DeFi space. Last but not least, he offered his perspectives on how he approached venture investing into web3 & crypto startups.
"Strategy wise. This is the path that we went through. We started looking at options because we wanted to possibly buy options to hedge our balance sheet. But when we looked at it, we were like: this kind of volatility, very difficult to buy. If it's very difficult to buy means selling is good. So in this case, I think low control leverage volume selling tends to be a very good strategy because of the high carry." - Darius Sit
Introduction
- Darius Sit (Linkedin, @dariussitzl ), founder and Chief Investment Officer of QCP Capital (@qcpcapital, LinkedIn, medium)
- As you are a first-time guest on the show, we will dive straight into your origin story, how did you start your career?
- How did you eventually co-found QCP Capital?
- Can you talk about your role and what made you begin your first foray into crypto?
- In your career journey, what are the engaging lessons that you can share with my audience?
QCP Capital & Crypto Derivatives Investing in Asia
- To start, can you briefly provide an overview of derivatives such as options, perpetuals and futures in the crypto market and how are they different from traditional derivatives trading, for example, commodities options and futures?
- Can you define what alpha and beta mean in derivatives related to volatility?
- Given cryptocurrencies are speculative high-risk trading digital assets, how do the derivatives intersect with decentralized finance protocols such as DeFi?
- For crypto derivatives trading, does one need to have an investment thesis to make a directional trade?
- I am keen to double-click on the derivatives market and the concept of carry. I have two questions on that: the first is that there is an opportunity for market making given the high volumes of crypto trade going in Asia. Is volume selling a form of carry for you or a form of yield generation because you are selling volatility?
- What does it mean when we say carry in crypto derivatives, is it just cash and carry or curve trading?
- What is the education required to bring an LP to onboard about crypto and specifically DeFi?
- Are crypto derivatives trading globally so that they can be executed everywhere and anywhere? Are there nuances for the Asia Pacific region where there may be differences?
- Given that the misconception of BTC as an inflation hedge is debunked and the upcoming ETH2 merge, how should we look at crypto digital assets? Are they just call options that are highly correlated with the S&P 500?
- We share common investments in crypto or web3 startups and we only met up today for the first time. Given that venture capital is so different from crypto derivatives, how do you treat this asset class?
- What traits do you index in a founding team or startup when you invest as a venture capitalist?
- What are the categories in crypto or web3 that you are looking at?
- What can we learn from the recent collapses of blockchain protocols, crypto lending firms and hedge funds that blew up after the Terra-Luna-UST event and are not specific to anyone per se?
- What does great look like for you in QCP Capital?
Closing
- Any recommendations that have inspired you recently?
- Darius' recommendations: Joe Rogan's recent interview with Elon Musk
- How can my audience find you?