AD Derivatives Podcast Featuring Lewis Fellas, Head of Hedge Funds at CoinShares

Welcome to the AD Derivatives podcast led by Director of Derivatives; Greg Magadini.

Featuring: Lewis Fellas, Head of Hedge Fund Solutions at Coinshares!

Since 2014, CoinShares has been building the future of investing - creating Europe’s leading European digital assets investment firm and innovating the technology and infrastructure to enable access and power investment in the new digital economy. Today we interview Lewis Fellas, head of Hedge Fund solutions at CoinShares. We explore Lewis's background, thoughts on the market, and insights he's learned along the way.

Introduction

The Amberdata Derivatives Podcast featuring Lewis Fellas, Head of Hedge Fund Solutions at CoinShares, offers a deep dive into the world of cryptocurrency derivatives and the broader landscape of digital asset management. In this enlightening discussion, Lewis shares insights gathered from his extensive experience in traditional finance, prop trading, and hedge fund management, providing valuable perspectives on the evolution of CoinShares, the nuances of crypto as an asset class, and the exciting potential of crypto derivatives.

CoinShares: Pioneering Digital Asset Management

CoinShares, with its origins as a commodity trading hedge fund founded by Danny Masters and Rus Newton in the 1990s, has emerged as a pioneer in the digital asset management space. Lewis traces the company's journey from its early adoption of Bitcoin in 2014 to its current position as the largest digital asset manager in Europe, with over $5 billion in assets under management. He highlights CoinShares' strategic expansion into the ETF industry and the recent establishment of a dedicated hedge fund division aimed at incubating and launching innovative investment strategies.

Crypto as an Asset Class: Unique Characteristics and Opportunities

Throughout the podcast, Lewis emphasizes the unique characteristics of crypto as an asset class, including its high potential for alpha generation and the challenges of managing both alpha and beta in crypto investment products. He underscores the importance of segmentation in hedge fund strategies, catering to diverse investor preferences ranging from pure alpha seeking to market beta exposure. Additionally, Lewis dives into the dynamics of crypto derivatives markets, drawing parallels with traditional markets while noting the heightened volatility and inefficiencies that create opportunities for skilled traders.

The Rise of Crypto ETFs and Their Impact

A key theme of the conversation revolves around the transformative impact of crypto ETFs and their potential to reshape the landscape of digital asset trading. Lewis anticipates significant growth in ETF volumes, with the possibility of ETF trading surpassing spot market volumes soon. He discusses CoinShares' strategic initiatives, including the acquisition of Valkyrie, an ETF provider, aimed at expanding its footprint in the US market and capitalizing on the growing demand for crypto ETFs.

The Convergence of Traditional Finance and Crypto

Moreover, Lewis explores the intersection of traditional finance and crypto, highlighting the emergence of innovative financial products such as tokenized real-world assets (RWAs) and decentralized finance (DeFi). He identifies DeFi as a promising frontier for crypto, envisioning a future where blockchain solutions play a vital role in global financial systems. However, he acknowledges the challenges of regulatory compliance and the complexities of integrating decentralized platforms with traditional frameworks.

Technical Insights: Derivative Trading Strategies and Risk Management

From a technical standpoint, Lewis provides insights into the intricacies of derivative trading strategies, including options, futures, and perpetual swaps, and their applications in managing risk and generating alpha in crypto markets. He discusses quantitative modeling techniques and algorithmic trading strategies employed by CoinShares to optimize portfolio performance and navigate the dynamic nature of digital asset markets.

Personal Reflections

Beyond his insights into the financial markets, Lewis shares personal anecdotes and reflections on his career journey, from prop trading at Lehman Brothers to managing hedge funds at Deep Haven. He emphasizes the importance of perseverance, self-awareness, and continuous learning in navigating the complexities of the financial industry. Outside of work, Lewis enjoys cycling and skiing, finding the balance between his professional endeavors and personal interests.

Conclusion

In conclusion, the AD Derivatives Podcast featuring Lewis Fellas offers a comprehensive exploration of the evolving landscape of digital asset management, highlighting the opportunities and challenges inherent in crypto derivatives trading. Lewis's expertise, coupled with his engaging storytelling, provides listeners with valuable insights into the dynamic world of finance and the exciting possibilities of cryptocurrency investments.