Talking Crypto with Hehmeyer’s David Nuelle

As 3Points launched 10 years ago in the derivatives trading space, it was fitting that our first client was Hehmeyer — then known as HTG Capital Partners. Founded by Chris Hehmeyer, who is literally a Hall of Famer in the futures industry, the firm has been at the forefront of derivatives for decades. So it was noteworthy when Hehmeyer transitioned completely to cryptocurrencies earlier this year.

David Nuelle has been a managing director at Hehmeyer for over seven years, and he also joined the interim board for the Global Digital Asset & Cryptocurrency Association (Global DCA), a new industry self-regulatory association. We spoke with David recently about where cryptocurrency is at, why Hehmeyer made its transition to focus on it, and why now is such an important time for the industry. Read David’s thoughts, lightly edited for clarity, below.

Hi David, thank you for speaking with us. In your words, what went into the decision to reinvent Hehmeyer and focus on the crypto space?

The growth potential is enormous. We did a lot of research on what the growth potential is — one measure that people have looked at is a projection by the World Economic Forum, which estimates that 10% of the world’s assets will be on blockchain by 2027. Based on my research, if the WEF is correct, that works out to a compounded monthly growth of digital assets of 4%. And it’s not going to be just bitcoin, but other tokens and things we haven’t even imagined yet. So the price of the assets will likely be moving higher, and this creates a multiplicative effect on the demand side.

After all of the boom and bust of the past few years, what makes now a particularly notable time for cryptocurrencies?

Throw on top of that the fact that with instability in the central banking world, there’s a need for a private currency, and bitcoin falls into that category. So it’s a little bit of a combination of bitcoin coming of age, and rails having been built for it.

How did you get introduced to Global DCA?

Why does the crypto industry need Global DCA?

The group’s mandate is extremely aggressive. They’re trying to become global in nature, as inclusive as possible. They want members from as many different places and portions of the industry as possible, brought under one tent. That has not necessarily been the case with other groups, so I think this one has a great chance of succeeding.

Again, one of the things I’ve been impressed with is the people involved. I knew some already, and I’ve gotten to know others. There are some traditional capital markets people, a couple people from academia, thought-leaders in innovation, and people like myself who understand the market and how it works. There are some high level attorneys who understand the crypto market, and people from other SROs. So there’s a broad range of experiences.

What lessons should crypto learn from traditional capital markets? And, vice versa, what lessons can traditional capital markets learn from crypto?

As for the second question: there’s a feeling from the crypto world that traditional capital markets failed to evolve. The infrastructure is cumbersome — it’s expensive now in so many ways to trade. That’s not necessarily true for small retail traders, but people who are building infrastructure around traditional capital markets, it’s a high bar to become a trader or market maker in those markets. And some of it is due to a failure to innovate. Financial markets can look at crypto markets and see the enormous amount of innovation happening all over — from payments, to new products, to how some new coins work, to how privacy is held on the blockchain. Traditional capital markets should look for that innovative spirit and maybe adopt some of these changes we’re seeing in crypto.

What are the biggest challenges facing the crypto space today?

What are three big industry changes you see in the upcoming years?

  1. I think there will be a number of innovations as it relates to ways you can transact crypto and crypto-related services. People will start to adopt smart contracts. They will proliferate, we will rely less on centralized authority and more on decentralized oracles in that space.
  2. I think you will see conventional banks offering the ability to hold crypto and fiat in one account, and that will be a breakthrough.

Any final thoughts as we wrap up this interview?

PR & Communications for Fintech & Chicago Tech.

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