Crypto hedge fund manager: 'quant heaven' lacks 'brilliant minds'

Crypto trading isn't the hot ticket it once was, especially as Sam-Bankman Fried's FTX trial rages on, but quant traders in particular might be missing out. Jean-Marc Bonnefous, ex-BNP Paribas global head of commodity derivatives, currently runs digital asset fund Tellurian ExoAlpha and calls the industry "quant heaven." However, it's got a talent problem.

Bonnefous, who was speaking today on a panel at Quant Strats 2023, says asset classes like fixed income and commodities are abundant in "very brilliant minds," but "you don't really have that in crypto." Aside from the obvious bad press, he says they're put off by the fact that "the infrastructure is so much slower," and the options market is not as fleshed out as it needs to be.

Infrastructure speeds are particularly damning for high-frequency traders. Bonnefous says, in crypto, "that extra edge is not going to get you that much of an edge." Traders are able to successfully execute HFT strategies without needing more than Python, which should tell you all you need to know.

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Why is crypto "the dream data driven market"? Bonnefous says that unlike other markets, "everything's in the open, so you can extract information," albeit hidden behind "a maze and chains of transactions."

Bonnefous is confident attitudes will change, however, as the expansion of the options market "creates [those] third or fourth dimensions" which can prove lucrative to top quants. The recent introduction of the crypto ETF has been a major step towards establishing it.

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