Is Hyperliquid Satisfying the Trading Demand for Weekend Trading?

Transcript

So, one of the really interesting things about crypto, uh, although Trifi is finally catching up, is that it trades 24/7, 365. It doesn't no holidays. It doesn't take vacation. And, uh, for a while, I mean, going back in years, we would going back years, we would see Bitcoin and other cryptos being punished sometimes because of the fact that bad news seems to happen over the weekend and there's nowhere else to put on a view. uh that is changing a little bit and there's even in the world of crypto uh there's a lot of different ways that that fast money you you were referencing can now be used to to express vantage points on on the markets. Uh I I think we have to start with with hyper hyperlquid and what's happening there

especially with some of their um um oils contracts which are I I think they did like $1.2 billion of of nal value in a day which for them is is massive. I mean, the hype token is is surging. Uh, Koshi and and Poly Market. I know Koshi is not quoteunquote a crypto company. Poly Market is. I mean, we're seeing tons of activity happening there. Some of it, I guess, morally ambiguous u related to like the Ayatollah and his fate, but but nonetheless, it just shows the demand for people being able to trade on on these events and and what's happening. And like this is the quintessential product market fit. So I love like your thoughts on just kind of

what's happening, what what are you seeing and like what is the associated impact on of all this activity on on traditional markets? Is this a case of like the tail wagging the dog to a certain degree? >> That's a big question and I I would be uh I don't think I don't think the answer is knowable right now. the the the most confident the thing I I guess I could think about with most confidence is that Bitcoin in particular >> um is the most I guess the is the asset with easily the most regulatory clarity and and and methods of access right of all digital assets um it's the asset

which um makes the most sense to me as a risk absorber over weekends, right? There's there's not only um you know, there's there's a very very deep options market that's 24/7, right? Very uh good per markets and and you could actually get more people who are not in crypto a lot thinking about using Bitcoin as the thing that they would reach to on a weekend. Um does that extend down all the way to, you know, the top 20 or top 30 names? probably not just out of familiarity. Then you just have crypto people trading with other crypto people, right? And to me, that's less of a shock risk absorber function and more of just

people liking to trade and um and being able to trade on those markets. As for traditional assets either being represented in derivatives or tokenized over the weekend, um I guess the first question one has to ask oneself is like, well, who is able to access these things, right? We're I I think sometimes in in our industry we still tend to overestimate um the degree to which the market can be on hyperlquid or you know the market um can think about using tokenized equities. It's it's a it's a pretty small subset. It doesn't mean the people aren't smart or that they haven't written smart algorithms. Um but that kind of macro shock absorber effect for

the weekend um you know suggesting that cifhies that big banks and insurance companies or giant pension funds or sovereign wealth funds or giant macro hedge funds uh can now reach into these other blockchain venues and you know continue to hedge their books over the weekend or take shots. I don't know if we're quite there yet. So I I you know I I I see that there is room for more volatility over the weekend in the absence of other markets being open. I'm just not sure it's all the players and I'm not and therefore I'm not sure it represents the market view so much. It just represents the view of the people who can trade

there. Bitcoin might be the exception to that and my view may be outdated but that's my sense. It can only be the market's view when the entire market can participate. >> Okay. Um, so maybe we can just expand a little bit further then. I mean, I think we're getting close to a point in time when the entire market can participate. I mean, tokenized stocks are a thing. We were discussing before, you mentioned Kraken partnering with with NASDAQ and um, was it OKX partnering with ICE? >> ICE. Yeah, with >> um's money. with ISIS money anyway.

>> Yeah. And I think the CFTC I mean what they're either setting up rules or or they're laying the groundwork to allow for uh 247 trading of of derivatives contracts on on the platform. So we are getting to that world. Uh I'd love you to sort of talk about like or sort of I guess explore like when you think we might get to the point where like these are uh basically uh what's the word I'm looking for? um where these are like mature liquid perpetual markets, no no pun intended.

>> Yeah. >> Where sort of information can get disseminated across um financial infrastructure right away and it doesn't have to just be crypto, >> right? No, I it's a good point. Um because because I I do I do think that Bitcoin has a has a unique place and role there right now because it's it's the most familiar. It's it's probably the thing that you can imagine uh a non-cryptonative market participant reaching for in one form or another. And and look um you know CME announced that they're aiming towards futures exchanges will aim towards 247 trading. Regulated futures exchanges. I think that's just a matter of time and that may just be you know

how this um uh conversation ends early, right? That you end up with the regulated venue. So there I let's break it into two parts, right? There's there's per and then there's let's say you know tokenized equities or tokenized securities. Um per are amazing. Uh they're a brilliant um innovation. They've proven themselves uh successful. I think that the as as another you know as my my friend and and you know bits and bits host Chris Perkins points out that you know having not having an independent member-driven clearing

function right having exchanges clear themselves creates some vulnerabilities in how the per markets work but they're a f fantastic innovation but not extremely compatible with the way Americans tend to trade, right? Uh it's definitely compatible with the way retail can trade, but I think there, you know, spend some time thinking about this. I think they're a little bit more different than dated futures contracts than people realize. It's not just you take the expiration date off and you have a funding event and you know suddenly you have this experience of trading a perpetual uh and you don't

have to think about you know uh a term structure of interest rates or or cash and carry costs and all that there I think there's more to it than that part of the reason pers um work is that you know if if a retail person goes and buys a highly levered per on binance answer or buy bit or OKX or somewhere offshore, they post a little bit of collateral, they really have an experience that's more like owning an option than owning a a Delta 1 derivative, right? In other words, they're either going to get liquidated or they're going to have experience a big, you know, positive P&L event. Um, there's no shade thrown at them if they're liquidated, right? If

your if your collateral gets liquidated on a on a per exchange, well, you can show up the next day with, you know, without a big red mark next to your name and do it again. Um, that's different from the way futures markets work here. And so I would like to think that PERPS will be this uh heavily adopted instrument that institutions around the you world will come to use especially on nights and weekends to try to uh express views. But I'm not entirely sure that it's as compatible in current form as people think it might be. It's it might be a longer distance away. It may be that you have traditional exchanges uh

running 22 hours a day uh and just adding Saturday and Sunday and on things like maybe it'll you know start with Bitcoin and Ether and then move to you know to oil and maybe to equity futures too some point that'll probably be the load the road of uh less uh of less resistance.