Crypto Finance Brokerage
- Patrick Heusser, an ex-UBS trader, is the head of trading for Swiss firm Crypto Finance Brokerage.
- In an interview, Heusser shared his personal thoughts about the 11 altcoins he is bullish on.
- He also shared his views on the current crypto trading environment where he sticks to three rules.
- See more stories on Insider’s business page.
Four years ago, Patrick Heusser was not even aware of the crypto ecosystem.
When a friend contacted him about an opportunity to trade bitcoin for a Swiss brokerage, Heusser, a veteran trader with over two decades of experience working for hedge funds and investment banks, did a double take.
“At first, I had to check with him, what do you trade, what’s that again,” Heusser told Insider in an interview. “And he just said listen, it’s the thing, just get on with it. Go on the internet, look for this stuff and then tell me if you want to do that.”
Heusser spent the following three months watching and reading up on everything about bitcoin and the broader crypto markets. Before long, he became fascinated by “not only the way these assets were trading but also the new technology that was behind it.”
Today, he is the head of trading for Crypto Finance Brokerage, which facilitates 24/7 crypto trading and provides liquidity to banks and financial services providers.
Navigating the hyper-volatile, fast-moving, and 24/7 crypto market is nothing like Heusser’s past experience of trading interest rates for UBS, but it often reminds him of a prior stint trading emerging-market assets in Singapore.
“Sometimes you have good liquidity and the next day there is no liquidity whatsoever and the market jumps around and spreads go wide, so it’s a bit like that as well in crypto,” he recalled.
Another similarity between trading traditional and crypto markets is that capital tends to flow to assets that are gaining the most momentum. For example, if environmental, social, and governance investing is the big topic du jour, then all the stocks that are already focused on ESG metrics would get the biggest boost. In the crypto markets, altcoins – tokens besides bitcoin – are where all the action is these days, he observed.
Led by flows into top gainers including Cardano (ADA), altcoins now make up 32% of the total assets under management for all crypto assets, which is close to the record 35% set in mid-May this year and exceeding the 30% highs seen in January 2018, according to a CoinShares fund flows report.
11 altcoins on his radar
Altcoins are also a hot topic of discussion on Heusser’s trading desk these days. Heusser shared with Insider 11 altcoins that he is personally bullish on as they continue to rally.
An area of his interest lies in multi-chain projects such as Polkadot (DOT), which ethereum co-founder Gavin Wood created in 2016. The protocol has been called “the internet of blockchains” and aims to enable different public and private blockchains to connect with each other. The DOT token has gone up 63.3% in the past 30 days.
Heusser is bullish on crypto exchanges such as Sam Bankman-Fried’s FTX and its FTX Token (FTT), which has surged 69.9% in the past month.
He also likes Terra (LUNA), a stablecoin-powered payment platform that promises fast transaction speeds and cheap transaction costs. The reserve currency of the platform is the LUNA token, which has shot up 164.5% over the past month.
Terra incubated the Mirror Protocol (MIR), a decentralized derivative protocol that creates synthetic crypto assets out of real-world equities. Its governance token MIR rose 36.5% in the past 30 days.
Also on his radar is a category of altcoins that he termed as “service providers to the DeFi ecosystem.”
For example, one of them is Chainlink (LINK), an oracle token that aims to bring real-world data onto blockchain networks. The protocol is used by smart contract applications such as DeFi protocols that require financial market data. The token has gone up 30.1% in the past month.
Another such altcoin is The Graph (GRT), which is a protocol needed to index the blockchain in order to be faster in searching for transactions. The native token of the network GRT has increased 34.8% in the past month.
Large decentralized exchanges that focus on borrowing and lending including Aave (AAVE) and Compound (COMP) have respectively rolled out their institutional treasury arms over the past few months. Heusser said this is one of the markets worth paying attention to because big regulated players will try to tap in.
The AAVE and COMP tokens have risen 25% and 11.9% over the past 30 days, respectively.
He adds that Solana (SOL), which has skyrocketed 243.2% in the past month, could still go up more. Nevertheless, the SOL token is overheated so he is searching for smaller coins within that ecosystem.
For example, Raydium (RAY), a decentralized exchange on Solana, has spiked 259.9% over the past month as liquidity flows over to the Solana network. If the bullish trend continues, the RAY token could have more legs to run given its efficient tools and good yield farming opportunities, Heusser said.
Another example is Star Atlas (ATLAS), a multi-player metaverse game that was launched on the Solana protocol just a few days ago. Heusser believes that the game can spur interest in either trading the ATLAS token or getting users engaged with the network.
3 trading rules for the crypto market
As bitcoin remains stuck below the $50,000 price level, Heusser is in a wait-and-see mode about how to position his books accordingly.
“I want to see first whether bitcoin goes up or down,” he said. “And if it’s up, I’m going to be rather long bitcoin than anything else. And if it’s down, I want to sell most of the altcoins I’m owning just not to get hit too hard by the drop.”
Despite the ever-changing and uncertain nature of the crypto market, Heusser always abides by three trading rules.
(1) Realize some profits
“Never go in all at once and when you go in, and I try to tell myself here and there, take some chips off the table and realize some profits at some point.”
(2) Avoid using leverage
“Crypto is so volatile. If you trade cryptocurrencies, don’t use any leverage, because it’s ‘craziness times two’ if you use leverage in markets like this.”
(3) Never concentrate all trading capital in one place
“What I also try not to do, is to have too much capital in one place. Even if it’s a bit cumbersome to withdraw your coins and store them yourself, it’s still probably not as safe as your house bank, so you should take some precautions and make sure that your capital is safe.”