This Hedge Fund Trying to Become the Top Pod Shop in Crypto is Rethinking the Multi-Manager Hedge Fund Model | Anatoly Crachilov of Nickel Digital
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
This episode features Anatoly Crachilov, CEO of Nickel Digital Asset Management, discussing their unique approach to crypto multi-manager investing. Nickel has evolved from a single-manager arbitrage fund in 2018 to one of the largest multi-manager crypto hedge funds, currently managing 74 pods with plans to reach 100 by year's end. (02:04)
- Core themes include their "West Berlin" partnership model that respects trader independence and IP ownership, contrasting with traditional "East Berlin" approaches that restrict movement and control intellectual property
Crachilov explains how crypto's infinite divisibility enables testing strategies with just $100k allocations, their rigorous selection process (accepting only a few percentage points from 1,600+ reviewed teams), and how they're navigating 2025's challenging environment where even top managers are struggling. (54:12)
Speakers
Anatoly Crachilov
CEO and Co-Founder of Nickel Digital Asset Management, a London-based multi-manager crypto hedge fund founded in 2018. Crachilov has led the firm's evolution from a single-manager fund to one of the largest multi-manager crypto hedge funds, growing from 35 to 74 pods in 2025 alone. Under his leadership, Nickel has managed over $100 billion in trading volume and maintains a team of 30 professionals, half of whom are software engineers developing proprietary risk and execution management systems.
Key Takeaways
Embrace the "West Berlin" Partnership Model
Nickel operates on a philosophy of freedom rather than restriction, allowing managers to retain their IP and independence without non-compete clauses or garden leave requirements. (28:15) This contrasts sharply with traditional multi-manager firms that impose 12-24 month non-competes and claim ownership of all intellectual property developed while employed. Crachilov explains their approach: "Instead of being East Berlin, we're following logic of West Berlin... we're gonna create a reason for you to stay with us rather than restrict you heavily on your right to movement." This model attracts top talent who want to maintain their independence while accessing institutional infrastructure and capital.
Leverage Crypto's Infinite Divisibility for Risk-Free Testing
Unlike traditional finance where minimum contract sizes can be $3 million (like natural gas contracts), crypto allows perfect strategy replication at any scale. (14:38) Nickel starts every manager with exactly $100k regardless of their target allocation, representing just 5 basis points of their fund. Even if a manager loses 20% during testing, it's only 1 basis point of total fund risk. This enables comprehensive validation of hundreds of thousands of trades across different market conditions before committing meaningful capital, creating a statistical confidence framework that traditional asset classes can't match.
Build Statistical Confidence Through Volume and Stress Testing
Nickel requires managers to execute at least 100,000 individual trades during their 2-3 month testing period to build statistical significance. (13:13) The firm actively welcomes market stress events like the October sell-off as "ideal testing grounds" to separate strong performers from weak ones. During that single event, they stopped six pods (all in testing stage with minimal capital at risk) while nine scaled-up pods performed brilliantly, accelerating their path to full allocation. This approach ensures only battle-tested strategies receive meaningful capital.
Scale Through Infrastructure and Execution Advantages
Nickel's $100 billion annual trading volume creates significant execution advantages for their pods through top-tier fee structures across exchanges. (52:19) Some managers report up to 12% annualized performance improvement when trading through Nickel's infrastructure versus direct exchange access. The firm has partnered with a major Chicago-based market maker to provide low-latency infrastructure, unlocking additional capacity for existing strategies. Their 15-person engineering team has built proprietary risk and execution management systems that can handle 100+ pods while maintaining millisecond-level oversight.
Maintain Market Neutrality Through Diversified Strategy Construction
With zero correlation to Bitcoin and SPX over the past twelve months, Nickel achieves true market neutrality through strategic pod allocation across multiple verticals including statistical arbitrage, basis funding, cross-exchange arbitrage, HFT market making, and momentum strategies. (11:01) As market regimes shift, they aggressively reallocate capital between strategies - for example, basis trades may outperform during rallies but contract during sideways markets. The greater the number of pods, the more precisely they can construct portfolios that adapt to changing market conditions while maintaining consistent risk-adjusted returns.
Statistics & Facts
- Nickel grew from 35 pods to 74 pods in just nine months during 2025, representing over 100% growth, with plans to reach 100 pods by year-end and 150-200 in coming years. (04:56)
- The firm has reviewed over 1,600 quantitative teams to select their current 74 pods, representing a selection rate of just a few percentage points. (09:12)
- Nickel traded over $100 billion in volume last year, with their largest single-day volume reaching $10 billion during the October market stress event, well above their normal daily volumes. (44:45)
