WATCH OPTIONS

“One of the big blockers we've had to institutional adoption is to some extent, like, custody. It blocks a lot of institutions from, like, within their mandate being able to come and trade on chain. We've actually developed, like, I think, a a unique, product where, we work with some of the big custodians, the qualified custodians, tokenize their balances with a partner called Strands who, you know, tokenize the balance and say your BitGo account, whether it's Bitcoin or USDC. And then those tokens, you know, the those funds are, you know, segregated. They can't be double pledged.”

“We originally tried to make options and selling options competitive in 2024. And so a lot of this insight was driven by that experience of trying to get, you know, bigger some of the big funds in the space to sell options, which is what happens at scale in traditional, you know, finance for, you know, 20% yield in USD terms. And it was impossible. Like, it was actually, like, just impossible to make any headway. The reason why is because either the basis trade, which they could lever up was yielding 15 to 30%, almost risk free, like, certainly delta neutral. Or they had the ability to do a deal with a team that was going to launch a token and needed TVL.”

“I think more and more, we see some of these big OTC takers and traders, at least looking to take less counterparty risk than they have in the past. I mean, you have, like, even, you know, block fills, like big US based, Chicago based, reputable market maker, OTC desk, declaring bankruptcy out of nowhere, like, a month ago. Those risks are present no matter who you're dealing with. And anytime you as a business can reduce that risk, you're going to try to do it.”

“iBit ETF has options. And this is a very, very big deal, not just for investors who want to be able to hedge their positions, their long positions on iBit. It's just much easier and cheaper to do that in options. You can get much more sophisticated strategies with the options than you can on just plain old futures. It's also market makers.”

“It's almost every week, the number of people getting sucked in to living paycheck to paycheck and feeling stretched with what they thought was a comfortable lifestyle a year or two keeps increasing. I think that's the pressure. It's people, I think when you were scrolling through earlier, you saw some headline, people making 500K or living paycheck to paycheck.”

“Small caps are the studs. They're resuming their outperformance for its large caps. His quote is the bottom line, the small caps have relative strength and valuation advantage over the large caps. S&P 500 earnings are running 13.7 percent above year ago levels. He says that's a bit above expectation, but he's not really so impressed.”

“Once you have a trade expiring in a year, the market maker needs capital on that exchange for a year. And the trader has some capital and some positions on the exchange for a year. This is very difficult to wrestle someone away, from an existing exchange for another exchange once all of that is set up, which is why, you know, like, a lot of the other sort of Asia based centralized exchanges tried very hard to get into options and didn't make huge inroads.”

“Warsh is probably a shoo-in, basically, she didn't use that word, but somewhat done. Senator Tillis has dropped his opposition. Will Powell stay on? She doesn't think so. Right off to the sunset, his news conference, he thinks, will be somewhat nostalgic and point out inflation expectations are firmly anchored, yet we have strong economic growth and might even mention things about independence of the Fed, so that's gonna be important.”

“Similar to what I described there with the seven year timeline between the introduction of perps to crypto in 2016 to really hyperliquid beginning to get serious traction in 2023 and 2024, I think we're about seven years behind when Deribit started to do volume for the first time too. And I think that market is about to get a lot bigger. I think we're in the early innings of, like, that sort of uptick in on chain options adoption following off chain, like the 2023 moment for pubs.”

“I think AI agents, right, like, that is not an issue for them. They can take that opinion and translate it very cleanly into the right structure, which might be like, you know, buying a call spread, you know, in Bitcoin as well as pairing it with, you know, a ratio put spread to the downside. Like, very difficult to come up with on your own and is a big blocker for a lot of people trying to access, options in general, even, again, people who have have, you know, a decade of experience in finance.”

“I would not be surprised to see an operation twist type thing and a little bit even more coordination with Treasury Department to see where it goes. I, for one, I'd be happy if we had less kind of information from the Fed. I feel like forward guidance is one of those things. The first few times you do it, it has a real strong impact.”

“The key thing is just about, like, accessibility and openness now. And and that's kinda what I'm looking for is, like, how can we open and make these accessible without necessarily having the same cumbersome KYC? Like, there's some interesting stuff. You know? ZKTLS for for KYC, etcetera, etcetera, or, like, Kraken has this thing where, you know, you can link your on chain wallet to your Kraken account, so you can kind of trade centralized but on chain, and that's kinda cool.”

“What happened on 10/10 was kind of the best thing that could have been you know, could have happened to us in in some ways in terms of the market structure. And that was effectively, it was the final nail in the coffin for the basis trade, you know, which was already in decline really over the course of 2025. But then also, it really hit a lot of the valuations for a lot of these alts in crypto, which, as I said, a lot of these funds had built all of their returns around.”

“Yeah. You just need, differentiated order flow, like real organic users of options. You need that, to get market makers over the line. That begets more, you know, liquidity, which makes it easier to attract that next level of organic order flow. It's kinda why Ribbon managed to make it work way back in 2018, 2019. Not the greatest product in my opinion for the users, but it was great for onboarding liquidity because they offered market makers very cheap volatility, in massive size.”

“There was Open, Hejic, Dopex, Strike. Like, Open originally got hit with, like, a CFTC fine. So this is partly, like, regulatory, which kinda is tough, like, a lot of stuff back then, tornado cash. And the fine was huge, and they basically just had to shut down after that, unfortunately. I believe a founder quit off the top of my head. And then, like, similar stuff has into Hijic. Their their risk management via smart contracts is not that good. So there's, like, a TV alt death spiral that happened. They lost, like, 80, I believe, in in the span of of a couple bits.”

“If we get a little bit of a drawdown in the stock market, I expect this year, I hopefully expect Tether to be the number two and eventually number one. That's the key thing about them, understand the technology. It's the ability to transmit, transmore and transact dollars via stable coins overall, and why take the extra risk in Bitcoin when you don't have to anymore?”

“The major things that Deribit brought was, like, a real time order book. They actually used the central limit order book for market makers, and that, you know, made prices not so opaque. And it brought it more transparently, which I think is nice. And it was the first time we could make an IV surface for Bitcoin and actually, like, price it, and people could see that. I think that really led the game in a lot of pricing and a lot of risk in portfolio management.”

“It also is just by the nature of the product where you are trading often, like, six month dated or twelve month dated options. Once you have a trade expiring in a year, the market maker needs capital on that exchange for a year. And the trader has some capital and some positions on the exchange for a year. This is very difficult to rest wrestle someone away, from an existing exchange for another exchange once all of that is set up.”

“We know that there's still a chokehold on the Straits of Hormuz, but yet Bitcoin remains resilient alongside many other markets. I don't have the brainpower to unpack this, but luckily I have amazing guests that do.”

“Unfortunately, Europe doesn't have the political will that the United States has to actually fix some of these issues and so on. I don't think anything is going to get fixed there. We're very much up against the rock and the hard place when it comes to China as well. Half of the EU members want to make friends with China and become closer, or the other half see China as the baddies that want to flood our market with cheap goods.”

“It shows how difficult it is to actually replicate a network effect in options. It's much more sticky because you have, you know, very long onboarding cycles, a very high bar for institutions to use, and, you know, once they're onboarded, like, to take incremental risk to go to another exchange. This is very difficult to wrestle someone away from an existing exchange for another exchange once all of that is set up, which is why a lot of the other centralized exchanges tried very hard to get into options and didn't make huge inroads into the market share.”