Podcast Summary
This podcast episode features an insightful conversation with Adam Guren, the founder of Hunting Hill, a New York-based asset management firm with a strong foothold in the digital asset space. The discussion covers a wide range of topics, including the origin of Hunting Hill, Gurren’s views on Bitcoin ETF products, and the firm’s interest in the distress space. Gurren also shares his journey from professional soccer to finance, his experience in arbitrage trading, and his firm’s exploration of the Grayscale Bitcoin Trust.
Key Takeaways
Adam Guren’s Journey and the Genesis of Hunting Hill
- From Soccer to Finance: Adam Guren, a former professional soccer player, transitioned into finance, studying behavioral finance in undergrad. His experience at a proprietary trading company, First New York, led him to establish Hunting Hill in 2012.
- Arbitrage Trading and Fair Value Analysis: Gurren’s expertise in derivatives and arbitrage trading, along with his understanding of fair value analysis, played a crucial role in his financial career. He applies these skills to identify mispricings in the market and generate positive returns for investors.
Bitcoin ETFs and the Grayscale Bitcoin Trust
- Bitcoin ETF Optimism: Gurren expresses a high degree of optimism about the approval of a Bitcoin ETF, estimating an 85 to 90% chance of approval before the end of the year. He also discusses the potential evolution of the Grayscale Bitcoin Trust in light of the ETF push.
- Market Makers and Liquidity: The podcast highlights the importance of market makers in providing liquidity to the secondary market for ETFs. The introduction of ETFs is expected to lead to the introduction of options on those ETFs within 48 hours, potentially bringing in more liquidity and new investors.
Expansion of Options Trading and Ethereum ETFs
- Growth of Options Market: The podcast anticipates the expansion of options trading in the US, with the introduction of weekly and monthly options in addition to the traditional quarterly options. The growth of the options market in digital assets is expected to continue, making it a much larger market in the next five years.
- Ethereum ETFs on the Horizon: The likelihood of an Ethereum spot ETF being launched within the next year is high, especially if the Bitcoin ETF is approved by the end of the year. Grayscale has already applied for the conversion of their grayscale closed-end fund into an ETF, and other sponsors are also involved.
Hunting Hill’s Business Lines and Distress Space
- Business Lines: Hunting Hill is involved in various lines of business, including a market-neutral strategy, ETF strategy, event trading, credit trades, and a crypto dedicated strategy. The firm also participates in the distress space, buying assets that are considered to have a high complexity premium and are below fair value.
- Investing in Operating Businesses: The third component of Hunting Hill’s business involves investing in operating businesses in the crypto space, focusing on practical use cases that benefit everyday people. The firm has invested in a FinTech services company called Versifi and has partnered with a group called Base Layer Ventures.
Blockchain Technology in Consumer Brands
- Blockchain Use Cases: Hunting Hill Digital focuses on consumer brands and is exploring use cases for blockchain technology in that space. Brands are exploring how to use blockchain technology to engage customers and create new market segments or products.
- NFTs and Liquidity: The podcast discusses the potential of NFTs to make traditionally illiquid assets liquid, providing uniqueness and provenance. Companies are exploring the use of NFTs in the restaurant industry, such as bidding for reservations or getting access to preferred tables.
Sentiment Analysis
- Bullish: The podcast exhibits a bullish sentiment towards the digital asset space, particularly Bitcoin and Ethereum ETFs. Gurren’s optimism about the approval of a Bitcoin ETF and the potential growth of the options market in digital assets reflects this sentiment. The discussion about the practical use cases of blockchain technology in consumer brands also indicates a positive outlook on the broader application of blockchain technology.
- Neutral: While the podcast is generally bullish, it also maintains a neutral stance by acknowledging the challenges and uncertainties in the space. This includes the uncertainty around the timing of the launch and approval of the ETFs, the limited number of market makers for spot exposure, and the debate about whether NFTs can make traditionally illiquid assets liquid.
