THREAD: Crypto risk management keeps getting better AKA “Not losing all your fucking money” and/or optimizing risk-adjusted returns.

On the centralized side, we have vibrant and liquid futures markets with valuable interest rate mechanisms.

Not available to the US, of course.

There are “edgy” areas of the market that could soak up a lot more risk capital before losing attractiveness. More risk capital is coming, from all parts of finance… you can bet big on that.

During many of the best times to ‘hedge,’ token positions get paid a healthy funding rate in the market - whether by perpetual futures funding, the futures forward curve, or borrow/lend. The hedging toolset is getting powerful.

With ETH trading $1415, the ETH March Futures contract is trading $1493 on FTX- there is $78 of premium for two months. That’s a 5.5% yield (33% APY) for a 2-month basis trade on the future of finance. @FTX_Official has AAA rating when it comes to crypto counterparty risk, IMO.

As for that counterparty risk, if you wanted to, you could hedge that too.

Options markets are at the point where all types of hedging structures can be executed. This area is going to see incredible growth … hockey stick with rocket engines. @RealHxro is focused on this area and we are building furiously.

Options volatility is juicy. Players can often sell covered-call premium at elevated levels. Puts are often cheap relative to calls - better for hedgers who buy puts and sell calls.

On the decentralized side of things, it’s like Willy Wonka’s Chocolate Factory of financial markets. For an econ nerd, it’s absolutely breathtaking, worthy of multiple threads. Some big brain applications that simply make sense.

And DeFi is all on-chain, as transparent as can be, for the whole world to see.

These developers and early adopters are changing the world of finance and markets, and the individual will reap all the benefits as the next generation of finance evolves.

If you enjoyed this little thread and are interested in more, please let me know what topics you’d like to see next.

Give my team a follow @RealHxro @RealHxroLabs @HxroBtc @CryptoMessiah @RandomTask555