Here’s the ‘Home Run’ Trade for Crypto’s Next Cycle That Could Print 5-10X Gains, According to Investor Arthur Cheong


Veteran crypto investor Arthur Cheong says he has his eye on one potential “home run” play for digital asset markets looking out over the next market cycle.

In a new interview with crypto podcaster Taiki Maeda, Cheong says that he has his eye locked on the decentralized derivatives trading sector.

Cheong, who heads DeFiance Capital, says the sector is the biggest in all of crypto and is producing massive amounts of revenue for the space under the radar.

According to the investor, decentralized derivatives trading could easily grow five to ten times, even if its volume doesn’t get any bigger.

“We are most bullish on decentralized derivatives. When you look at all the numbers, it points at the derivatives trading sector as the biggest market in crypto. I think the annual revenue generated by derivatives trading in the space is probably $10 to $15 billion in current market conditions.

If we go back to the bull market, I think we’re looking at $20 to $30 billion, just from derivatives trading alone. So right now, the decentralized derivatives platforms only can do 2 to 5% of the market share.

I think this is poised to grow significantly over the next few years. I think we should at least get to 20% in the next two years. 

So that means even assuming the total crypto derivatives trading volume doesn’t grow, the decentralized platforms will still see a growth of five to ten times, just because they are going to gain and increase their market share from the entire market. So I think this is also where the ‘home run’ would be. 

That’s one of our highest conviction investments going into the next few years.”

Earlier this month, Cheong said that the decentralized derivatives trading platform dYdX was part of the reason he was bullish on the Cosmos (ATOM) ecosystem.

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