2020 Outlook: Chris Hehmeyer, Hehmeyer Trading
Chris Hehmeyer is CEO at Hehmeyer Trading + Investments.
What were the key themes for your business in 2019?
One key theme for us this year was growing our crypto market making business. We’ve been connecting counterparties in the OTC spot crypto market for a number of years now, but this sector of our business saw sustained growth throughout the year. We increased resources towards the effort to to reflect that growth, we are a growing liquidity provider in this market, and are confident that these digital markets are here to stay.
What are your expectations for 2020?
One specific expectation is that we see the custodians gaining significant assets in 2020. But more generally, we will begin seeing more examples of the disruptive potential of the blockchain. 2019 saw a lot of news regarding price fluctuations in bitcoin: the rise from its lowest price since mid-2017, peaking at its highest price since early 2018 over the summer, and its volatile drop since that point. But while this noise around the price of bitcoin — or any other cryptocurrency for that matter — has been constant, the blockchain technology that underlies cryptocurrency is what is truly the most interesting, different, and worthy of attention.
What trends are getting underway that people may not know about but will be important?
I think many are overlooking the endless possibilities that blockchain or distributed ledger technology entail. There’s been a proliferation of financial products, such as futures and options, around Bitcoin that are simply derivatives products in our current financial markets (or rails), but any asset can be digitized on a blockchain. Whether or not we are eventually headed for the digitization of our entire financial system can be up for debate, but there are definitely huge possibilities for financial innovation regarding newly digitized assets.
Firms are accelerating the buildout of digital transformation strategies.
Expect to see several new entrants in the equity exchange landscape.
Capital markets will continue to integrate and globalize.
SFTR implementation and the demise of LIBOR will be key themes this year.
Capital markets firms slow to adopt cloud have some catching up to do.