Making Markets David Kalk: Crypto's New Regime - [Making Markets, EP.15]
Feb 2, 2024
David Kalk, former Macro Fund Manager and CIO of Reflexive Capital, discusses the current state of the crypto market including reflexivity, evaluating new tokens, Solana's resurgence, and the Bitcoin ETF. The podcast explores the concept of reflexivity in the crypto market, the structure of the Reflexive Capital fund, the ongoing regime transition in crypto trading, the impact of a Bitcoin ETF, the need for institutional investors in crypto, and the perspective of venture capitalists in the market.
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Size Strategies For Shock Liquidity
- Build trading strategies that respect regime limits and liquidity constraints.
- Design portfolios assuming a shock where all investors redeem simultaneously to size scalability.
Short Unlocks Worked — Then Stopped
- Shorting token unlocks and supply cliffs worked well during the altcoin bleed earlier in the year.
- Those trades have stopped working recently as market participants hold for upside instead of selling into unlocks.
Tokens Behave Like Commodities
- Treat crypto tokens more like commodities driven by supply and demand and narrative-driven flows.
- Fundamental cash-flow models are premature given legal and practical limits on token revenue mechanics.