You just don't see him making money

People who eat melons can never understand the real situation of the parties.

On February 27th, when many expected FTX's chief executive, SBF, to have a $13m float on Bitfinex and was waiting to be laughed at for confirmation, he belatedly responded: it was private money and a hedging strategy that had been shorted elsewhere.

And it soon became clear that Alameda Research, which he founded, still had nearly 7, 000 bitcoins making money on BitMex, another trading platform. In other words, while many people think that SBF has been harvested by the market, they are actually making steady money.

Professional trader, encryption large family, trading platform founder, which is the real identity of SBF?

"Ten million dollars lost" truth

As all SBF trading data positions are not available, block beat BlockBeats cannot fully recover trading details, but we can at least infer from some appearances.

What many people fail to notice is that SBF has been ranked no.1 in Bitfinex's profitability for the past two weeks before the so-called floating loss in Bitfinex, so why the sudden huge floating loss this week?

& have spent (note to BlockBeats: from left to right, February 10-february 17, and February 17-february 24, respectively, Bitfinex ranking) & NBSP; & have spent

We found that the Alameda Research account in BitMex is currently in a state of short position. Combined with the abnormal long fund rates in the recent contract market and the trend of the recent three weeks of first rise and then fall, it is not difficult to draw a conclusion that this is probably a hedging strategy of fund rate arbitrage.

That is to say, short position is chosen in BitMex with higher long fund fee, while long position is made in Bitfinex with lower long loan fee, so as to build a Delta neutral investment portfolio. In other words, under this strategy, traders can ignore the rise and fall of the underlying asset price of BTC, and just take the difference of fund interest rate between the two platforms.

& have spent Alameda Research accounts at BitMex & NBSP; & have spent

In fact, in addition to unilateral speculation, cryptocurrency leverage products can also be widely used in a variety of relatively sound arbitrage strategies, including cross-market arbitrage, cross-period arbitrage, short-term arbitrage, capital rate arbitrage, option arbitrage, exchange rate hedging, etc. Alameda Research is fully familiar with these complex methods. The fund rate arbitrage in this case is that because the market interest rate will eventually converge, investors benefit from the difference in the fund rate of the same underlying asset on different platforms, which essentially takes advantage of the difference in long-short sentiment among different trading platforms in the same market.

Just after the account losses were reported, some joked that even the SBF of the trading platform had been reaped by the market. In fact, SBF is not just a sohrab. It was a professional trader before it founded FTX, a cryptocurrency derivatives platform, and a three-and-a-half year veteran of trading at Jane Street, a leading us financial firm.

No shortage of money, no anonymity

Sam bankman-fried, an M.I.T. graduate who studied physics at university, likes to be called SBF (his twitter name).

When he first entered the university, SBF was confused about what to do after graduation. He considered going into politics or becoming a journalist. He wanted to change the society, but he did not know how to do it. What he did know, though, was that he didn't want to be a physicist. Later, he decided to use his mathematical talent to make money before doing public welfare.

In his junior year, SBF sent his resume to Jane Street, a famous and mysterious financial company on wall Street. Though little known, Jane Street, a quant trading firm that brings together America's top math graduates and programming geeks, specialises in the arbitrage trade and offers a premium salary of $1.2 million a year, even for undergraduates.

& have spentSam Bankman - Fried  & have spent

SBF into the internship, after graduation successfully retained. Professional traders work is monotonous, boring, everyday need to use the statistical data and create the model, often in two kinds of the price of similar assets appeared deviation, SBF found after work, he is very like and are good at this kind of work, he not only has good mathematics and programming skills, also have gambling mentality and a good poker players agile thinking.

After three and a half years on Jane Street, SBF started thinking about trying more new things. And from the end of 2016 to 2017, cryptocurrencies began to undergo some crazy changes: market values soared, trading volumes soared, and almost overnight, everyone started talking about bitcoin.

At this point, cryptocurrency came into the SBF's vision, and seeing the huge opportunities, he decided to leave the company and start his own business.

In October 2017, SBF took his savings and borrowed money from family and friends to start Alameda Research in a Berkeley apartment. Alameda comes from a city in California's San Francisco bay area. In Alameda Research's first year, SBF earned a premium of more than 30 per cent on one of its deals, which took advantage of the difference between litecoin's global trading platforms.

However, such opportunities are increasingly rare and trading systems have had to be upgraded. He brought Gary Wang, his college roommate, to build an automated trading system that tracked cryptocurrency prices around the world, executing an average transaction per second, while the rest of the team were basically friends, or friends of friends.

In less than a year, Alameda Research, with a background in finance, has rapidly developed into the world's leading provider of cryptocurrency liquidity and market maker, reportedly with clients including coon, Huobi, OKEx and other trading platforms. Starting in early 2019, Alameda Research has also become one of the few cryptographic quantification teams to disclose personal information. That's why we can see from the latest BitMEX earnings list that Alameda Research made nearly 7,000 bitcoins on the platform.

& have spent Alameda Research earnings at BitMEX & NBSP; & have spent

On July 3, Alameda Research, which single-handedly drew attention to the volume of trading on its platforms, released a report that revealed that trading platforms were exaggerating the volume, naming as many as 60 trading platforms with dubious data.

In addition, the report notes that CoinMarketCap easily trusted the data provided by exchanges without adequate review, and eventually began to re-establish its own data collection policies. Alameda Research became more widely known after Forbes reported on it.

It took Alameda Research just 20 minutes to digest the huge sellout of 7,500 bitcoins that popped up on the spot market on July 10 last year. At the time, the team recorded the entire operation of SBF and his colleagues and posted it on YouTube.

& have spent Zhao changpeng praised the "live trading of 7,500 bitcoins by SBF and the team"& have spent & have spent

The video attracted a lot of attention. Even zhao changpeng, coon's founder, forwarded it on twitter, praising it as a "very interesting transaction insight". In addition, he replied to a question that the seller probably didn't know coon had OTC. The SBF happily agreed: "+1, anotc can satisfy 7, 000 bitcoins, that can be much better." FTX officials also tweeted: "if there is no currency, the trade will be much less fun."

From the quantitative institute to the founder of FTX

Interestingly, on December 20, 2019, five months after being praised by zhao changpeng, coon announced the completion of its strategic investment in FTX, an encrypted derivatives trading platform created by SBF, which became its only external investment institution at that time.

At this point, the new trading platform, in fact, just over eight months.

SBF, a trader, has indeed built a product suitable for investors. After using this platform, many people have found that the general margin, volatility and leverage token trading with stable currency are indeed more mature. As a result, FTX has achieved rapid development since its establishment. Although there are only 35 employees, daily trading volume has exceeded $1.1 billion in the past two months.

Since FTX is based in Hong Kong, where SBF spends about three-quarters of his time, Hong Kong has less oversight of encrypted trading platforms than the U.S. and "the cryptography market in Asia is huge," he wants to hear and interact with clients as quickly as possible.

SBF at work

SBF, only 27 years old, has a personality different from most young people. He loves work and stresses efficiency. He sets three different times in his Google calendar, which he adjusts as he travels around the world, and on weekends, SBF "spends most of its time at the office."

SBF once summed up how the experience of a trader had changed him: he learned to look inside himself and adjust quickly when he found a mistake; Learned to communicate quickly and effectively; I learned to make long-term plans to achieve my goals in the next few years.

Last December, the reporter interviewed in SBF, found a note in his office, reading: "one team, two mission/I is the ultimate goal of a donation (1 team, 2 missions/My end goal is to donate.)."

Five years ago, when SBF first became a trader, he left a short-term plan on the website of 80,000 hours, a non-profit organisation focused on the career development of university graduates, that "tends to make money at least in the short term". He also planned to donate "six figures in the next few years".

Now, SBF has quietly realized the original dream.

Reference articles:
1. Block Kong Breakfast, Sam bankman-fried, FTX
2. An Interview With the CEO of FTX and Alameda Research: Sam bankman-fried
Billion-dollar-a-day Crypto to Trader Finds Accolades Top intermediaries

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