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As one of the first institutional investors in digital assets, Kevin Kang, founding principal of BKCoin Capital LP, talks about the genesis of his firm, debunks the myths surrounding this asset class, and tells us why allocators and managers should believe the future is bright for digital assets.

Episode Transcript

Catherine: [00:00:06] Welcome to The Signal, a podcast presented to you by Third Bridge, the world’s leading independent research provider, exploring how some of the globe’s most investable industries are facing upheaval. My name is Catherine Ford, and I’m a journalist with a 20 year track record of reporting on a wide range of financial topics such as capital markets developments and M&A. Joining me today is Kevin Kang, founding principal of BKCoin Capital. Kevin is an expert in digital assets and will be giving us insight into his career to date, his investment philosophy, his take on the markets today and what he sees on the horizon. Hi, Kevin, I’m delighted to have the opportunity to talk to you today. Let’s get stuck in. Can you introduce yourself to the audience giving them an insight into your career path and how you ended up doing what you do today?


Kevin : [00:00:51] Sure. Absolutely. First of all, thanks for having me. Yeah, I started my career at AllianceBernstein as an assistant portfolio manager within US equities, focusing on large cap US equities, managing a $40 billion mutual fund with a team of about 40 people, supporting five different portfolio managers. That’s where I started my career and then went into a $5 billion fund in New York called Amalgamated. As a portfolio manager, managing $2 billion book, focusing on multi-asset portfolios with Barclays Axis benchmark. So I focused on 60/40 stocks and bond portfolios, and that’s where I started my career. And back in 2018, we saw a tremendous opportunity within digital assets. Not only digital assets got a lot of attention because of the parabolic move that it had back in end of 2017. But, you know, we saw a huge gap between the product offerings in the market back in 2017 and 2018, which are all passive vehicles. And there was no institutional grade products out there within digital assets. So we wanted to bring in the institutional grade strategies as well as risk management and compliance to this new asset class. So we launched with a market neutral fund, which is an actively managed fund. So basically to give investors an exposure to this new exciting asset class with much less volatility.


Catherine: [00:02:07] Yeah. Now you said, I mean, it is an incredibly exciting asset class. It’s also a relatively new asset class. And you’ve spoken a little bit about how you got into it, but what do you think that you saw so much? Because I know that your fund is one of the first institutional investors in that asset class. What do you think that you saw there that other people were slightly slower to spot?


Kevin : [00:02:27] I think a lot of people were keen on buying and holding strategy just because the returns that it had back in 2017. But after 2017, the market crashed. Bitcoin crashed from 20,000 all the way down to 4000, right? So we wanted to bring a new product that’s actively managed. So we focused on the dislocation of the market, a lot of arbitrage strategies. So back then market was even more inefficient. So there were arbitrage trades as simple as buying a bitcoin on one exchange and selling them the other for anywhere from ten to even 50% premium. So being a fixed income PM, when you have a single digit to low teens return in the year, that’s a pretty decent year. Whereas the trades that we’re seeing within digital assets, we’re seeing 10 to 50% per trade. So we really want to scale that up and bring that to the market.


Catherine: [00:03:20] Cool. You spoke about actively managing your fund and we’re going to get back to that when we talk a little more about the trading strategies that you employ and your thoughts on the market. But I’d like to grill you a little bit more about yourself, if you don’t mind, and what your job involves on a day to day basis. Can you talk to us about the team that you’ve gathered around you? Who do you work with? How do you guys work with each other at the moment?


Kevin : [00:03:42] Sure. So over the last four years, we put a lot of emphasis on building our quant desk. So all our strategies are quantitative and there’s no discretions within our strategy, right? So we really focus on quantitative signals that are databased and coming up with new strategies. So half of our team out of 15 is dedicated to our quant desk. So what that means is our desk is always looking for new opportunities in the market, finding new strategies, developing new strategies, and backtesting new strategies to deploy new strategies. And given the markets becoming more efficient, there are a lot more high frequency traders coming to the market, so a lot of easy arbitrage trades are out of the way. 


Catherine: [00:04:22] Now, moving into the digital asset space, I would imagine there’s quite a few highs and lows to your career and your day. Talk us through some of the things that are sort of where you say like, oh, wow, this is going really great, I’m really having a fantastic time. And things where you go, Oh, good Lord, do I need to actually deal with that once again? What are some of the highs and lows?


Kevin : [00:04:40] Even running a market mutual strategy, given the volatility, sometimes the volatility can definitely catch you off guard and sometimes some of our algos malfunction, for lack of better words, right? So when the API doesn’t function well and let’s say one leg of the trade goes in and the other hedging doesn’t go in or exchange, exchange API goes down and we have no idea what our positions are. In the beginning it was more common than it should have been given the lack of infrastructure that it had. But now we trade on the world’s most reputable exchanges, the largest ones. So we focus on top five exchanges. So the tech API is definitely getting better, but it’s definitely not perfect. So sometimes when API goes down, it can definitely be frustrating.


Catherine: [00:05:26] Talk to us about where your inspiration has come from because I mean, not everyone is in digital assets. What made you go actually, this is something that I would like to do. Is there a person? Is there an event? Is there anything that sort of made you think, Yeah, that’s where I want to go?


Kevin : [00:05:39] I think one of my good friends, but also my business partner, Carlos, we always push each other. And, you know, he definitely motivated me in a sense to start the fund with them. And his background is in commodities. He’s traded commodities for over 15 years before starting BK with me. And the idea of being one of the first institutional players to bring this product to the market was definitely exciting as well as nerve racking, right? But it’s been fun for years. And look forward to doing this for 40 more.


Catherine: [00:06:11] You talk about his background being in commodities. What backgrounds are there within the organization? I mean, is it all that you’re all if you excuse me, is it all PhD math people that you need to have in your team around you? Or what qualifies you to get in?


Kevin : [00:06:23] Yeah, definitely PhD is not required, but.


Catherine: [00:07:04] But a strong understanding of maths is probably quite important, no?


Kevin : [00:06:28] Yeah, math and the coding skills. Yeah. But those are definitely important. And in terms of background on our team, we want to build a team that comes from all asset classes because we didn’t know how digital asset was going to behave like. So me coming from equities and fixed income, my partner, Carlos, coming from commodities and we have some colleagues that come from macro investing to small cap specialists, from big budget bracket banks and different hedge funds. So we wanted to cover all asset classes to put the best brains together to figure out what this asset class is going to look like.


Catherine: [00:07:05] You spoke about some of the challenges that you’ve got in work. Talk to me about what makes it fun and exciting. And also, after all that fun and excitement, how do you relax at the end of the day?


Kevin : [00:07:17] Yeah. What’s exciting is finding new opportunities in the market and then when the trade goes better than what we expect expected. And those are the fun times, right? In terms of relaxing and catching up with friends and family, it’s always that I always cherish.


Catherine: [00:07:30] Fantastic. Now, you spoke about technology being a challenge and that if external technology lets you down, that makes it really tricky to do your job and very frustrating. Is there a time, that aside from that, you felt your work has really tested you and you thought, you know what, this is a challenge I didn’t necessarily see coming. I didn’t expect it. I’m not entirely certain how to navigate that.


Kevin : [00:07:53] Yeah. In terms of challenges, you know, being a PM before starting this fund, all you got to do is focusing on the portfolio and the performance before. But after starting the fund, you’ve got to wear many different hats sometimes, right? So I had to learn about compliance function, legal function, investor relations function. So in the beginning, when we were smaller Carlos and I wore many different hats to try to do everything. But now we have still a small team of 15, but everyone’s done a tremendous job really supporting each other and we all have very distinct functions. So we have the Head of Investor Relations and we recently brought on Paul Magahis as President, who was former Global Head of Capital Strategy at Coinbase. And prior to that he was Head of Capital Introduction at StoneX well as Lazard. So everyone has very different functions and different roles, but at the end of the day we’ve been working like a well-oiled machine, thankfully.


Catherine: [00:08:49] Do you still get to trade yourself?


Kevin : [00:08:52] Yeah, yeah.


Catherine: [00:08:53] Because this is, I think, the tricky thing, isn’t it? You do a job, you get very good at it, and then you set up your own business. And all of a sudden the thing that you’re very good at, you don’t get an opportunity to do that anymore because as you say, you wear all these different hats. How frustrating is that?


Kevin : [00:09:05] It can definitely be frustrating. In the most ideal world, I just want to wake up in the morning, look at the charts and look at the market all day. But that’s not how it goes. Mostly you just get pulled into different directions, kind of put out fires every day, but you know, it comes with highs and lows. But I’m definitely enjoying it and grateful for all the experience.


Catherine: [00:09:24] Fantastic. And before we wrap up this section, can you give us one piece of advice for people who are wanting to get into the industry, who want to move into investing, who want to move into digital assets specifically?


Kevin : [00:09:37] Sure. I think people tend to overthink and really digital asset as this new scary asset class. But at the end of the day, it’s just another trading instrument, right? So it’s exactly like trading equities or fixed income, except the market is open 24/7. That’s the only difference.


Catherine: [00:09:55] That’s something really important to keep in mind. That said, I would like you to give us sort of a brief explanation on what are digital assets and how do they actually differ from other asset classes. I think lots of people equate digital assets with crypto, but it’s way more than that, isn’t it?


Kevin : [00:10:13] Yeah, definitely. So in terms of digital assets, it’s basically a decentralized application that’s immutable, but it’s also a chicken and egg problem. The whole genesis of digital asset was about empowering individuals and decentralization, and it was born after the global financial crisis because of the mistrust of the governments around the world, right? Because basically central banks created this bubble and they can fix the interest rates globally or per country, whereas digital assets was born because there’s no single entity that’s controlling this asset class. So it was about this decentralization and as I mentioned, empowering individuals. But also it’s a double edged sword because since it’s not regulated, it’s scrutinized by governments around the world as well. So I think there’s got to be a good balance between good regulations for consumer protection, first of all, but also really try to embrace this new technology that can really change the world in a sense. When you look at the blockchain, all the data and records that goes through is immutable and you can’t go back and change it, right? So if you look at, let’s say title business and real estate or mortgage business on blockchain, everything can be settled instantly as well. So essentially you can undercut all the middlemen when you get a mortgage and just deal directly on blockchain and cut out all the middlemen. It’s just a lot more efficient.


Catherine: [00:11:33] Does it take the risk out of trading? Is it less risky? I mean, I’m sort of thinking about the risk profile because I think the point that you made earlier on in the conversation where you said fundamentally it is an asset like any other asset class. One thing that obviously investors have a very keen eye for is sort of the risk profile. And there are different sort of risks that people are willing to take on. How would you classify the risk profile of this asset class?


Kevin : [00:11:56] I think in terms of risk profile, it’s definitely higher. I think that’s why there’s more dislocation and mispricing in the market currently. And you know, the risk mostly comes from the counterparty risk because there are a lot of unregulated entities, including exchanges. So even when we trade on the large exchanges, some of them are not regulated per se. So it’s very important for us as manager to do diligence on those counterparties and know exactly who we are trading with and feel comfortable with our counterparty risk as well.


Catherine: [00:12:29] Who invests in this asset class? I mean, is it the usual sort of cast of characters or does it slightly differ because the risk profile is that little bit more different?


Kevin : [00:2:37] Yeah. So in the beginning, the asset class was definitely driven by retail traders. But now as the asset class is becoming more mature, more traditional allocators are either looking into the space or have investments in space. What I would say still for our fund specifically is a mix of funds of funds and family offices. And then we are now talking to some of the bigger pensions and endowments, now we have over four years of track record, which is exciting.


Catherine: [00:13:05] Now, because digital is a relatively new asset class, I feel that there is still quite a lot of misconceptions out there. And I mean, the fact when I, as I said earlier, spoke to friends and said, oh, I’m going to talk to someone who’s investing in digital assets. And they said, oh, that’s a risky, risky one to take on. How often do you find yourself confronted with those misconceptions? And are there actually things where you say, Well, actually, I know that people feel that way about it, but that’s fundamentally wrong. Or in fact, you know what? They’re not completely off the mark there.


Kevin : [00:13:33] Yeah, I run into that all the time, actually, given the volatility. I think digital asset just tends to get a bad rap, given what’s portrayed in media as well, because media tends to focus on the hacks and stolen funds, etc., etc.. But when you look at the volatility, when you look at some of the growth stocks, tech stocks just come down 80%, 90% as well. So compared to those of some of those high flying tech names, that’s come down significantly, that had a bigger drawdown than some of the cryptocurrencies. So given the macro backdrop, I think cryptocurrencies definitely held better than some of this big name stocks, actually.


Catherine: [00:14:10] I’d like to spend some time sort of exploring the pros and cons for this asset class. What would you say are the advantages? You spoke briefly earlier on about cutting out the middleman that I guess we’ll put in the plus corner. What else is there that really speaks for this asset class as an investment opportunity?


Kevin : [00:14:27] It’s an investment opportunity just because market is still very nascent. You see a lot of dislocation in the market. It just brings more opportunities for managers like ourselves. So when I mentioned dislocation, it’s basically finding arbitrage opportunities. So not taking any directional risk and being able to find alpha within this asset class, I think that’s definitely one of the pros. And then as more products come into the market and then to be at the forefront of this new, exciting asset class is very exciting. But also we continue to see new products coming to the market. So now we’re seeing structured products coming to digital assets and as more institutional players come into this new asset class, I think this asset class will look exactly like some of the traditional assets.


Catherine: [00:15:13] Can we explore the challenges a bit more? I know that we have spoken about price volatility, the market dislocation. We very briefly touched on the regulatory environment. And let me pick that one up, first of all. You said that it is still a relatively unregulated environment, however, that particularly governments are paying a very close attention to it. How do you see this evolving in the future and how much of a concern do you think it actually is?


Kevin : [00:15:38] Yeah, I think this will evolve as a new asset class and then it will have to be regulated for institutionalization, right? Because no big institutions can invest in this asset class without clear regulatory clearance. So in terms of in the US, what we are seeing is the CFTC and SEC trying to regulate this market and trying to define what this asset class is. CFTC is saying this is a commodity, whereas SEC is saying this is security. So within the US there’s a whole debate about how this asset class should be treated. And the new hot topic nowadays is a stablecoin regulation. Just because there was a stablecoin that blew up back in May called UST, which was backed by Terra Luna, right? A lot of people trusted their protocol and a lot of retail investors put their life savings through their protocol because they promised 20% guaranteed yield annually. And that didn’t work out where the funds basically evaporated because the stablecoin broke the peg and it went from a dollar to pennies on the dollar. So that got a lot of attention from regulators around the world. And now Tether is getting a lot of attention because people think Tether is not actually backed by US dollars, even though Tether has come out many times and said they’re backed 1 to 1 to the dollar. But the thing is, they haven’t come out with the audit report. That’s very transparent, right? But I think in terms of stablecoin, the circle dollar in the US has done a tremendous job really being regulated in the US, but also coming out with quarterly audit reports as well proves that it is actually backed dollar for dollar.


Catherine: [00:17:27] You’ve spoken a little bit about the regulatory environment that we’re seeing developing in the US. What is it like in other jurisdictions? How’s, for example, the European Union and some of the Asian markets dealing with this challenge?


Kevin : [00:17:37] Yeah, I think Asian market is definitely at the forefront and in terms of regulations, so the Singapore Government has done a good job working with the players in this asset class and trying to come up with right regulations and trying to embrace this technology. I think for regulators it’s very tricky because you don’t want to hinder this fast growing technology, but also you’ve got to put the consumer protection at the forefront as well. So the way I see it panning out is just like the Internet base, right, when you look at the regulators around the world. Technology is developing and evolving so fast, regulators are always one step behind. So, for instance, in terms of data security laws, you know, Facebook or Googles of the world using your data and governments trying to regulate it, they’re still trying to figure out the balance between that right? And Internet’s been around for many decades. So I think the regulatory regulations will continue to evolve and it will be a never ending thing, just like the Internet that we’re seeing.


Catherine: [00:18:39] Let’s talk about price volatility. I mean, that’s obviously something that, you know, even if you don’t know anything at all about cryptocurrency as a digital asset, that’s the one thing that you will probably have picked up just by simply reading the newspaper. Is that something where because of the, I guess, newness of the asset class, it’s still finding its level? Or is that something that is more fundamental to the asset class than to others.


Kevin : [00:19:04] In terms of volatility the last couple of years a lot of growth managers have invested in Bitcoin and some Ethereum and bucketed it as a core stock because it had a parabolic returns the last two years, just like gold stock. So when the investors are on risk off mode, one of the first things they’re going to do is sell their risk assets, right? So Bitcoin and Ethereum are definitely one of the top risk assets for a lot of managers. So it was one of the first holdings that they sold. So we saw Bitcoin coming down from over 60,000 to now sub 20,000. So, you know, as you mentioned, the volatility is definitely there, but also volatility is trader’s best friend, right? So it just presents other opportunities as well.


Catherine: [00:19:48] You spoke earlier on about some of the inefficient market conditions that we can see in the digital asset class. Can you elaborate for us on that one?


Kevin : [00:19:56] Yeah, definitely. So in the beginning, as I mentioned, you could buy Bitcoin or Ethereum on one exchange and sell on the other for a premium. So that was a very easy off trade to be done back in 2017, 2018, and those are ???. So we moved on to focusing on triangular currency pair trades. So the simple example would be going from US dollar and then buying a Bitcoin with the US dollar and selling it for euro and then converting euro back to U.S. dollar. So those were good arbitrage trades to be had three or four years ago as well. And then as more high frequency traders started coming to the space, those are out of the way. And then the last two years, the derivatives market within crypto has developed significantly. One of the most popular trades in the space was spot future basis trades, basically buying the spot. So whether it be Bitcoin or Ethereum or other assets and selling in the future at a premium so that those bases were anywhere from 10 to 30% consistently the last couple of years. So those were one of the popular trades and basis has come down significantly given the market conditions. So where we’re seeing opportunities now is within the options market. So within options volatility, there are some arbitrage trades to be had. And when you look at cryptocurrency options, market call options are more expensive, which is complete opposite of the equity market. When you look at the equity market, put options are almost always more expensive, whereas with crypto markets, just because of the exuberance that we saw in the market, call options are more expensive. So basically it gives you a whole new set of opportunities where sometimes you’re getting paid to put on a downside protection.


Catherine: [00:21:43] Now, earlier on in the conversation, you spoke about active fund management and how that allows you to capitalize on some of these inefficient market conditions. Can you talk us through some of the strategies that you employ?


Kevin : [00:21:56] Yeah, definitely. So, as I mentioned, options is one of the most overlooked areas within cryptocurrency in my opinion. So we’re seeing more opportunities there and dislocation there. So we’ve been focusing a lot of time developing options, strategy to sell around volatility, arbitrage, around parity trades that I just mentioned. And then we’re still seeing some opportunities within equities to market as well. So equity market as in crypto ETFs or ETNs in Europe. So those structured products around crypto, so whether it be trading around premium or discount NAVs or the options around those products that can be mispriced because of the liquidity basically.


Catherine: [00:22:39] And how crowded is this space? I mean, how much are these strategies that are being used by lots of people, how much of it is proprietary to your fund? I’m trying to get a sense of the competitive landscape that you have to work in.


Kevin : [00:22:52] In terms of future spot basis trade that I mentioned earlier, those are very crowded. Every macro funds were doing it basically and a lot of market neutral funds out there were doing it as well. So as you mentioned, being crowded in the space is definitely a good thing in a sense, because it makes the market more mature and more efficient.


Catherine: [00:23:09] I’d like to broaden out the conversation now and have a conversation around sort of the macro economic landscape that we are having to deal with. Because I guess as you are affected by this as any other asset class. How would you characterize the market conditions at the moment? What are the things that worry you? What are things that you’re like, I know this is something that is affecting other traders, other asset classes, but it doesn’t really concern us that much? How much, for example, is the conflict in Ukraine having an impact on your ability to do your job?


Kevin : [00:23:41] Sure. So geopolitical tension and uncertainty has definitely affected the market this year. So we saw the commodity price basically skyrocket, right? Crude oil price is at multi-decade high. It caused a lot of supply chain issues as well. So that caused inflation basically because of the supply chain crunch. But the demand is there. So in the US we saw the last two years where used car prices were more expensive than the brand new cars. The reason that happened is because to get a brand new car, you had to wait 6 to 9 months. Whereas if you’re a contractor, you need your truck today. So people are beating up all these used cars because they want to get their cars today rather than wait 6 to 9 months. So we saw the inflation creeping up the last two years and now central banks around the world are trying to control their inflation by raising rates significantly. So to go back to your geopolitical uncertainty question, it definitely affected the markets across all asset classes. That caused in a sense inflation and now central banks have to control the inflation by raising rates. So we saw the bond market basically having the worst drawdown in the last 50 years. When you look at the equity market as well, that’s been underperforming. When the equity market underperform, in theory, bond market is supposed to outperform. That’s why people will say, you got you know, as you get older, you got to have 60/40 portfolio to balance that risk profile. Whereas we’re seeing all asset classes having a huge drawdown this year because the market is in a sense broken. We saw equity market having a huge drawdown as well as the bond market. And the only asset class that’s outperformed this year so far has been commodities because of one: supply chain issues and two: because of the increased demand.


Catherine: [00:25:33] So have these market conditions affected trading in digital assets in any way? Do you feel the squeeze as much as others do?


Kevin : [00:25:41] Yeah, I would say so just because this is another asset class, it trades along with the macro environment. So the whole debate about whether bitcoin, is digital gold hasn’t really held up well because it trades like a risk asset. And when investors are on risk off mode, they definitely sell crypto first.


Catherine: [00:26:02] Let’s wrap up the section with a look at what of the market conditions has surprised you the most over the last six months? 


Kevin : [00:26:08] Yeah, the huge drawdown across all asset classes is something that not a lot of investors saw coming. And then inflation as well as we saw last month when the inflation number came out, it was a lot higher than the estimate or what investors expected and it caused the market to drop significantly even more because the market was pricing that central banks will have to raise their rates even higher. But just because we’re seeing such huge drawdown in the market and there are reports that are coming out how over 15% of Americans are already behind their rent and the economy is breaking down, unfortunately, right? So now there’s an argument in the market that the central bank will have to either pause raising rates, or they’re going to start having to even lower rates by end of this year. At that point, I think that will cause the market to rally even more, and that’s going to be the turning point in the market. And we expect that to happen maybe sometime in the fall or later this year.


Catherine: [00:27:11] We’ll keep an eye on that. Now, one feature that we like to have in every podcast is the one to watch. Is there one company, one market, one opportunity, one thing that you’re like, this is something that I’m going to be keeping a very, very, very close eye on in the future.


Kevin : [00:27:28] So I think the debate about the spot based ETFs in the US market has been a big topic and a couple of days ago SEC denied Grayscale’s application to convert their Bitcoin trust into an ETF and they denied the Bitwise Spot based ETF application as well. So when you look at the Canadian market or European market, there are ETFs or ETNs that are backed by the spot Bitcoin or Ethereum. Whereas in the US, the SEC hasn’t approved that yet. We do have Bitcoin ETF in the US, but that’s future based not spot based. It’s backed by the futures product rather than spot. So I think by being able to convert Grayscale Bitcoin trust into ETF can be a huge topic in the coming months because Grayscale sued the SEC yesterday after it denied their application to convert their trust into an ETF.


Catherine: [00:28:25] Thank you very much. Now let’s turn our gaze towards the future. What do you think is the direction of travel for the industry overall, the investment industry overall and the digital asset class specifically? Where do you think things are going? Because as you said quite nicely, uncertainty does provide those willing to take a risk with plenty of opportunities. Where do you see that going?


Kevin : [00:28:49] Yeah, in terms of the investment industry, I think there are going to be definitely more managers jumping into digital assets and then as the space gets more regulated I think we’re going to see a lot more traditional allocators jumping into the space as well. And the really turning point for digital assets will be when sovereign wealth funds allocate into digital assets, because that’s going to be basically a checkbox for a lot of institutional investors saying, okay, this asset class is definitely becoming more legitimate.


Catherine: [00:29:16] We spoke about the looming recession. We spoke about rising interest rates. What other challenges do investors need to be particularly mindful of? We spoke briefly about the regulatory environment. Is that sort of the key thing that they need to keep in mind or is there something else?


Kevin : [00:29:33] Yeah, I think the counterparty risk and regulatory risk is definitely the biggest one within digital assets. So I think by focusing on the reputable exchanges or focusing on just the large caps, right, so Bitcoin and Ethereum, who are top two by market cap, I think by focusing on those two investors will be safer than investing in some of the more esoteric tokens that are much smaller.


Catherine: [00:29:55] And then unrelated to the challenges and the opportunities that this space offers, what do investors need to keep at front of mind going forward?


Kevin : [00:30:03] I think managing the risk is definitely important regardless of the asset class, right? So given the uncertainty in the market in the last couple of years, if you’re just sitting on cash, a lot of investors feel like they’re missing out on this huge debt rally that we saw across the globe, whereas the drawdown that we’ve had this year so far, I read a report a couple of weeks ago where a lot of those meme stocks, like AMC stocks or GameStop stocks, they’ve all come down to pre-COVID levels. So a lot of this retail traders that made a lot of money the last year or so have lost all their money. They lost all their gains if they held on to those stocks. So I think, one, if you’re a retail trader, I think it’s very important to manage the risk but also take profits as well. I think a lot of people get blindsided by buying and holding and then miss out on some of these opportunities to exit and capture those profits.


Catherine: [00:30:57] Now, let me wrap up this conversation with you, which has been incredibly fascinating to get an insight into the digital asset class. And I’m sure lots of listeners will learn an awful lot about it. But I’d like to come back to you as a person. What is your biggest motivation, not just sort of when it comes to trading, but in life in general?


Kevin : [00:31:15] In life, my parents have been my inspiration and I talk to my parents almost every day and try to do good by them and try to be a good person in life. I think that’s the goal and try to give back a lot as well. So being so busy the last couple of years, starting this bond, you know, I haven’t dedicated a lot of time in charity as much as I would like to. And that’s something that we as a firm started doing this year as well and starting more focusing on because I think giving back to the society and to the community is really important.


Catherine: [00:31:52] But it is so tricky, isn’t it, to find the balance between being so lucky to have a job that you obviously really, really enjoy and are passionate about, and then at the same time balancing that with family. At the end of the day, I guess you as pretty much everyone that will be listening, family is incredibly important getting you to that stage, allowing you to actually do that job. So marrying those two up is incredibly, incredibly tricky, isn’t it?


Kevin : [00:32:12] Yeah, definitely. And I think everyone can agree to that. Yeah.


Catherine: [00:32:17] Cool legacy. Let’s talk about what would you like to leave behind? 


Kevin : [00:32:23] Wow. That’s a big…


Catherine: [00:32:26] It’s harsh to put you on the spot like that isn’t it?


Kevin : [00:32:29] That’s a great question. Yeah, definitely want to be remembered as someone who was pleasant to be around, but also who gave back a lot to the community. You know, everybody knows no matter how much money you make, you’re not going to bring that with you, right? So as much as we do as a company, we want to give back as much as possible, definitely want to be remembered as someone who gave back a lot and who cared about their loved ones.


Catherine: [00:32:56] I love the little shout out to your parents. I hope they’re listening to this now and feel very much appreciated. Kevin, listen, thank you so much for taking the time to talk to me today, sharing your insight into the market. I found it incredibly interesting and I really appreciate it. Thank you to all of you listening to this episode of The Signal presented to you by Third Bridge, the world’s leading independent research provider. Join us again in a fortnight for the next episode. And in the meantime, please rate review and follow our podcasts. Indeed, if you like it, tell a friend. Find us on Spotify, Apple Podcasts and wherever else you get your podcasts from. And also on From me, Catherine Ford, that’s goodbye and until next time.


Key Takeaways

  • Structured products are beginning to enter the digital assets class
  • The turning point for digital assets will be when sovereign wealth funds allocate into them
  • Volatility “can definitely catch you off guard”, but is also where some opportunities lie

Episode Guests

Kevin Kang

Founding principal of BKCoin Capital LP