January 9, 2023
On October 25, Amberdata announced the acquisition of Genesis Volatility (GVol), adding crypto options data and analytics to its digital asset data solutions lineup. GVol CEO Greg Magadini, who now serves as Amberdata's Director of Derivatives, shared his thoughts on the benefits that combining the two platforms will bring crypto options traders.
Why Amberdata?
"One of the things that we're really excited about with the Amberdata acquisition is the fit," said Magadini. "A couple of things that we're really good at, we felt like we could bring to Amberdata, and a couple of things that were our pain points, we felt that Amberdata had all the solutions."
On the pain point front, Magadini said that "Amberdata has a really strong infrastructure layer, a technology stack that for us has been really hard to find - with quality back-end engineers who can support this fast-growing market. For us to be able to jump into the tech infrastructure of Amberdata quickly solved our pain point."
On what GVol did well and adds to Amberdata, in addition to its options data platform, Magadini said that "where we did excel was really building a brand and partnering with a lot of the big exchanges; getting our name out there. Now we can leverage those partnerships a lot more."
Enablement of Advanced Hedging Strategies
One of the opportunities he sees from the combination of the two platforms is the ability for crypto traders to "start looking at correlations and volatility measures between different assets," which will allow them to develop advanced options-based hedging strategies similar to those used in traditional finance.
"In the traditional world, people will have a portfolio of different stocks, and then they'll hedge it with the S&P 500," says Magadini. "Well, in Ethereum land, you can have analysis and investment theories on different altcoins in the ERC-20 space, and then you can hedge that portfolio with ETH options. And all of a sudden, you're again layering different diversification of your assumptions and really isolating an expected value and minimizing the variance in the long run. And so, that's how you get really profitable consistently and create successful strategies."
Discovery of New Opportunities
Magadini also sees tremendous yet-to-be-discovered opportunities and yet-to-be-developed strategies within crypto because the asset class is so new.
"The way that I think about crypto is that it's such a nascent asset class that no one has 80 years of experience in this space," he said. "Everyone, at most, will have experience since 2009, but probably no one even has that. So, a lot of these assets haven't been dug through yet. And so, these nuggets of opportunity haven't been exploited yet."
Combining Amberdata's on-chain data with AD Derivatives volatility data allows new opportunities to be identified that previously remained hidden, enabling institutions to develop proprietary strategies that provide a competitive edge.
“Once you start overlaying volatility data to these nuggets of opportunity, call it on-chain transaction flows versus realized volatility or something like that, now there are strategies that are going to outperform that just need to be discovered and they're just sitting there waiting to be discovered," said Magadini. "And one of the things that is really interesting is when an arbitrage exists, or an inefficiency exists, if you're the first to discover it and you're the one to correct it, it essentially disappears in everyone else's vision. So, if you find it, you get to keep it. That's something I'm really excited about."
Get a Winning Edge With Amberdata and AD Derivatives
Success in crypto is challenging without great data. Amberdata and AD Derivatives give you the data edge needed to win. The Amberdata platform provides institutional-grade real-time and historical crypto market and blockchain data that traders and investors require to make investment decisions and manage risk while AD Derivatives provides the volatility and crypto options data needed to drive options strategies.
Explore AD Derivatives for free today to see how our crypto options data platform can power your hedging and alpha-generating strategies or contact us to learn more about the advanced options analytics capabilities offered in AD Derivatives Pro.
