"We Haven't Seen Anything Yet, So Hold Your Long-Term Bag:" Qiao Wang

In this week’s podcast episode, we speak with long-time crypto investor Qiao Wang. Wang is a partner at the DeFi Alliance and former head of product at Messari. Unlike many Bitcoiners who get into crypto because of their ideological views, or Ethereans attracted by the possibility of building decentralized apps, Wang had been a quant trader for 10 years when he first learned about Bitcoin, and it was the asset’s volatility and potential upside what drew him in. Years later, he’s still actively trading.

We talk about his portfolio and which coins look the most promising. Among his current big bets are Sushiswap and Terra —but not for the same reasons. As much as he loves DeFi, he believes there’s a bigger opportunity in centralized exchange coins, at least in the short term.

He looks at all sorts of metrics to come to his trading conclusions. In the end though, he says, the market is purely driven by memes and Twitter influencers. But that’s not unique to crypto. He believes traditional metrics like P/E are also memes and that equity investors use whatever they can to justify valuations.

About the current bull market, Wang says he’s 90% confident prices will go a lot higher. And while he doesn’t like to give price estimates, he still told me what he thinks the top for BTC and ETH will be for this cycle.

The podcast was led by Camila Russo, and edited by Alp Gasimov.

🎙Listen to the interview in this week’s podcast episode here:

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🙌 Together with:

• Zerion, a simple interface to access and use decentralized finance
• Ledger, a hardware wallet combined with the Ledger application to securely buy, sell, exchange, stake, lend & manage your crypto
• Kraken, consistently rated the best and most secure cryptocurrency exchange, which can get you from fiat to DeFi
• Casper, an enterprise-focused blockchain which aims to introduce unprecedented security, speed and scale for businesses

Qiao Wang: I did quant trading for almost 10 years before working professionally full-time in this space as head of product at Messari in 2018. During my time as a trader, well, I guess the kind of trading that I did was sort of sitting on the intersection of finance and technology, so something like Bitcoin naturally drew my attention.

I mean, I first started to learn about Bitcoin in 2011. My friend talked me out of investing in Bitcoin. I'm still mad at him, he's not my friend anymore. But I learned about Bitcoin when, I think there was a day where Bitcoin dropped like 90% and it was like, what kind of asset, what kind of penny stock-like scam is this? So I decided to take a look. But I just didn't do enough work back in the day, I thought this looks like something that's being used in the dark web, so it's probably going to get shut down. So I didn't really look at it even further, until like, maybe 2012.

But 2012 was when I really dug into the details. And I felt like, okay, this thing is interesting, it might have a small chance, maybe 10% chance, 1% chance of doing something really great. And the upside might have been 1,000X. You know, back in the day, Bitcoin was like low double digits, right. And it was like, if something has a 10% chance of doing 1,000X, then the expected value is well in the positive. So I took a chance and it worked out pretty well.

And I got into Ethereum very early as well in the presale. So Ethereum, again, I got very lucky because Vitalik went to the same school as I did in Canada, Waterloo, but I'm four years older than him, so we never crossed each others’ path. But when I saw that these Canadians are, especially these students, or this dropout from Waterloo was starting this project that seemed semi-legit, I decided to support them. So that's how I got into Ethereum as well.

But anyway, that's like my sort of pre-full-time crypto journey. 2018, I started working professionally as a founding head of product at Messari. So I ran product, built out the technical team, and grew the company to like 20-30 people, cash flow positive. And I left about a year ago to start DeFi Alliance. Can tell you more about it later. But that's my story, my crypto journey.

Trading Assets

CR: Nice. So a couple of questions on that. So you did quant trading for 10 years. I mean, were you kind of in big financial institutions, and were you trading stocks, like what kind of trading did you do?

QW: Yeah. So the firms that I was at, they're very well known within the quant trading space, but the general public generally wouldn’t have known about them. Because they're prop trading firms, meaning they trade their own capital. And so they don't have to be public. They don't need to do a lot of marketing because they don't raise money from outside. So they're actually, generally very low profile. But they are like 5% of the entire US stock market, in terms of trading volume, like 5% market share, so they do a lot of volume. And I did that in New York and Chicago.

And personally, I traded US equities, and that includes cash, so basically like individual stocks, but also ETFs, Futures, Options. Occasionally, my strategies can be transferable to other asset classes, because quant trading is sort of like, you don't really have to understand or study the fundamentals, because you trade at more shorter term. And therefore, some of the market microstructure, some the qualitative patterns, can exist across multiple different asset classes. So the strategy sometimes can be transferable across asset classes. But primarily, I traded equities.

CR: And so, it's interesting that you came to look at crypto and I guess, Bitcoin at first, through this lens of equities trading. Or like, just traditional assets trading, and like you said, kind of quantifying or measuring how much the potential was. A very different approach from other early bitcoiners who looked at it as Bitcoin in a sort of hard money aspect, or more the ideological aspect. Or like, in the case of Ethereum, it was more of the tech potential, like the tech promise aspects. So it's interesting that for you, it was more just like a purely rational trading perspective that got you into crypto?

QW: Exactly.

CR: So what drove you to go full-time and join Messari? Like, what inspired you to make this big shift?

QW: I've just been obsessed with crypto for such a long time. And at some point, I have to do this full time, and 2017 was the year. But also, I didn't know exactly what was possible in crypto as a startup back in the day. There wasn't anything like DeFi, like the blockchain programming stuff was still very early. So I was thinking about maybe building a centralized company that provides a useful service and product. And given my background in trading and quantitative analysis, building a data service just made sense. Right? So that's how we started Messari.

CR: Nice. Cool. And throughout this time, you've continued to actively trade crypto?

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