Native_0xCan you run a profitable delta-neutral strategy fully on-chain using perpetuals?
The perpetual futures exchange landscape has been exploding in recent months across crypto and as a trader we now have different chains and product experiences that we can explore and hopefully profit from. Core to this recent expansion in derivatives exchanges more broadly has been the increasing adoption of L2’s across Ethereum. Whether it’s protocols in testnet built on Starknet still such as ZKX protocol and RabbitX or protocols that are live and doing serious volume such as GMX, Kwenta a...
Native_0xMonday musings
I’m out of office in Barbados with the gf and family. Checking back in next week. Follow me here: Twitter: https://twitter.com/Native_0x Lens: https://lenster.xyz/u/native_0x.lens Farcaster: Native0x
Native_0xCan you run a profitable delta-neutral strategy fully on-chain using perpetuals?
The perpetual futures exchange landscape has been exploding in recent months across crypto and as a trader we now have different chains and product experiences that we can explore and hopefully profit from. Core to this recent expansion in derivatives exchanges more broadly has been the increasing adoption of L2’s across Ethereum. Whether it’s protocols in testnet built on Starknet still such as ZKX protocol and RabbitX or protocols that are live and doing serious volume such as GMX, Kwenta a...
Native_0xMonday musings
I’m out of office in Barbados with the gf and family. Checking back in next week. Follow me here: Twitter: https://twitter.com/Native_0x Lens: https://lenster.xyz/u/native_0x.lens Farcaster: Native0x
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Each Monday of the week I highlight the most exciting projects, news and data that has caught my attention. Not another newsletter I hear you cry…. but I promise to try and focus on lesser well known projects, founders or the like. The dominant narrative will be crypto with a wider macro lens but I’m not immune to spotlighting other notable technology developments within the last week.
Follow me here:
Twitter: https://twitter.com/Native_0x
Lens: https://lenster.xyz/u/native_0x.lens
Farcaster: Native0x
We flew from Heathrow to Newquay to celebrate my mum’s birthday over the weekend. If you choose to drive it’s about 5 hours from London depending on where in Cornwall you visit but the flight only took us 45 minutes with some wind at our tail. I feel the British countryside has been left in a slight time warp with the ease and availability of flights to warmer climates these days. Nonetheless, some of the coastlines are up there with anything you will find globally. See below a picture I took from my hotel room. We decided to revisit a favourite restaurant we had previously eaten at for my birthday by Nathan Outlaw called New Road. The restaurant had previously had 2 Michelin stars before closing down over covid to experiment with a new more informal menu before reverting to their tried and testing tasting menu format again. It champions the local seafood produce through an 11 course tasting menu. A few instagram friendly pictures below. All in all I was underwhelmed to be honest. Don’t get me wrong, it was lovely but my first experience was so magical that maybe sometimes it’s best to leave certain experiences as nostalgic memories? All in all, time spent with family should be cherished.
Macro
For those of you not interested in my quasi food blog, let’s move on to markets.
CPI data came in soft across the board last week leading markets to fake out of the famous trend line in place on the $SPY from Dec 2021 before reversing. J Powell remained firm in his hawkish tone in his customary press conference the following day with the market taking him at his word and trading lower. The Fed continues to be stuck between a rock and a hard place as they try to steer the US economy to a soft landing. Their view continues to be that inflation is the worse of the two evils and if that means driving the economy into a recession to cure the ails of inflation then so be it.
Markets have previously rallied on the ‘Fed pivot’ narrative where bad data was good news. It seems the market is finally taking J Powell at his word.
Deflation more likely than persistent inflation
The tweet thread here from Andreas highlights how many leading indicators already point to the very real threat of deflation rather than sticky inflation. He has always been in the double pump inflation camp of the 1970’s. I think J Powell is very much also in this camp given his remarks and admiration of Paul Volker. The market dynmaics are very different to the 1970’s in my view and this inflation surge was driven by exogenous covid related factors + supply chain constraints which are reversing as quickly as they accelerated. My view is inflation comes crashing down almost as quickly as it escalated. Only time will tell.
Equities bull or bear?
Julien Bittel who is now Head of Macro Research at Raoul Pal’s GMI had a promising chart for the bulls below highlighting the following trajectory of the $SPY following major peaks in CPI across 12 historical episodes from 1950 to 2018.
I often see people tweet out that 2023 is going to be even worse than 2022 as if we get a recession we are going to see new lows. While we cannot predict the future, it is important to understand that the markets are not the economy and this is what most people seem to miss. If the US does enter recession, what does that mean for equity performance?
Data above from Darrow Wealth Management highlights how on average, equities performed worst 1 year prior to recession than during a recession. In fact average return during a recession was -1% (skewed to the downside by -37% in 2007) with an average return of 16% in the 1 year post a recession.
Limitless clean energy?
In non market, non family holiday related news, scientists in the US have made a breakthrough in nuclear fusion that could lead to limitless clean energy. See a short clip here that succinctly describes the breakthrough and a funny clip here from nuclear scientist Marv Adams.
No pressing crypto news this week to highlight so instead I’ll wish you a Merry Christmas and hope you all enjoy some time off with loved ones.
Disclaimer
The Content in this and all Monday musing posts is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. I may hold positions in assets mentioned. Nothing contained in these posts constitutes a solicitation, recommendation, endorsement, or offer by the author or any third party service provider to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
All Content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the Site constitutes professional and/or financial advice, nor does any information on the Site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. The author is not a fiduciary by virtue of any person’s use of or access to the Site or Content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content on the Site before making any decisions based on such information or other Content. In exchange for using the Site, you agree not to hold the author, its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other Content made available to you through the Site.
Each Monday of the week I highlight the most exciting projects, news and data that has caught my attention. Not another newsletter I hear you cry…. but I promise to try and focus on lesser well known projects, founders or the like. The dominant narrative will be crypto with a wider macro lens but I’m not immune to spotlighting other notable technology developments within the last week.
Follow me here:
Twitter: https://twitter.com/Native_0x
Lens: https://lenster.xyz/u/native_0x.lens
Farcaster: Native0x
We flew from Heathrow to Newquay to celebrate my mum’s birthday over the weekend. If you choose to drive it’s about 5 hours from London depending on where in Cornwall you visit but the flight only took us 45 minutes with some wind at our tail. I feel the British countryside has been left in a slight time warp with the ease and availability of flights to warmer climates these days. Nonetheless, some of the coastlines are up there with anything you will find globally. See below a picture I took from my hotel room. We decided to revisit a favourite restaurant we had previously eaten at for my birthday by Nathan Outlaw called New Road. The restaurant had previously had 2 Michelin stars before closing down over covid to experiment with a new more informal menu before reverting to their tried and testing tasting menu format again. It champions the local seafood produce through an 11 course tasting menu. A few instagram friendly pictures below. All in all I was underwhelmed to be honest. Don’t get me wrong, it was lovely but my first experience was so magical that maybe sometimes it’s best to leave certain experiences as nostalgic memories? All in all, time spent with family should be cherished.
Macro
For those of you not interested in my quasi food blog, let’s move on to markets.
CPI data came in soft across the board last week leading markets to fake out of the famous trend line in place on the $SPY from Dec 2021 before reversing. J Powell remained firm in his hawkish tone in his customary press conference the following day with the market taking him at his word and trading lower. The Fed continues to be stuck between a rock and a hard place as they try to steer the US economy to a soft landing. Their view continues to be that inflation is the worse of the two evils and if that means driving the economy into a recession to cure the ails of inflation then so be it.
Markets have previously rallied on the ‘Fed pivot’ narrative where bad data was good news. It seems the market is finally taking J Powell at his word.
Deflation more likely than persistent inflation
The tweet thread here from Andreas highlights how many leading indicators already point to the very real threat of deflation rather than sticky inflation. He has always been in the double pump inflation camp of the 1970’s. I think J Powell is very much also in this camp given his remarks and admiration of Paul Volker. The market dynmaics are very different to the 1970’s in my view and this inflation surge was driven by exogenous covid related factors + supply chain constraints which are reversing as quickly as they accelerated. My view is inflation comes crashing down almost as quickly as it escalated. Only time will tell.
Equities bull or bear?
Julien Bittel who is now Head of Macro Research at Raoul Pal’s GMI had a promising chart for the bulls below highlighting the following trajectory of the $SPY following major peaks in CPI across 12 historical episodes from 1950 to 2018.
I often see people tweet out that 2023 is going to be even worse than 2022 as if we get a recession we are going to see new lows. While we cannot predict the future, it is important to understand that the markets are not the economy and this is what most people seem to miss. If the US does enter recession, what does that mean for equity performance?
Data above from Darrow Wealth Management highlights how on average, equities performed worst 1 year prior to recession than during a recession. In fact average return during a recession was -1% (skewed to the downside by -37% in 2007) with an average return of 16% in the 1 year post a recession.
Limitless clean energy?
In non market, non family holiday related news, scientists in the US have made a breakthrough in nuclear fusion that could lead to limitless clean energy. See a short clip here that succinctly describes the breakthrough and a funny clip here from nuclear scientist Marv Adams.
No pressing crypto news this week to highlight so instead I’ll wish you a Merry Christmas and hope you all enjoy some time off with loved ones.
Disclaimer
The Content in this and all Monday musing posts is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. I may hold positions in assets mentioned. Nothing contained in these posts constitutes a solicitation, recommendation, endorsement, or offer by the author or any third party service provider to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
All Content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the Site constitutes professional and/or financial advice, nor does any information on the Site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. The author is not a fiduciary by virtue of any person’s use of or access to the Site or Content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content on the Site before making any decisions based on such information or other Content. In exchange for using the Site, you agree not to hold the author, its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other Content made available to you through the Site.
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