From Math Genius to Encryption Trading Master: Exclusive Interview with Kevin Zhou

Kevin Zhou is renowned in the cryptocurrency field for his unique trading perspective and market insights. Since entering the Bitcoin market in 2011, his personal account has grown at a compound rate of about 100% per year, while the hedge fund he founded, Galois Capital, has achieved a compound growth rate of 35% over five years, reaching an asset scale of $250 million. This fund, which operates a market-neutral strategy, has only incurred losses in four months and has not experienced a drawdown of more than -1% in any month (excluding the FTX bankruptcy incident). In this exclusive interview, Kevin Zhou shares his legendary journey from being born in Shanghai and immigrating to the United States in a financially struggling family, to being obsessed with gaming, and finally becoming a cryptocurrency trader, as well as his profound insights and personal involvement in major market events such as the Luna crash and the Ethereum merger.

Early Experiences

Kevin Zhou immigrated to the United States from Shanghai with his parents at the age of three. The family's financial situation was difficult, and both parents were pursuing their degrees. From a young age, he was instilled with the importance of cherishing every penny and not wasting anything. Zhou was a "latchkey kid," often home alone, cooking for himself, and essentially self-reliant.

Zhou's father later became a mathematics professor and taught him mathematics from a young age. Zhou has a talent for mathematics and audited calculus courses at a community college when he was 11 years old. He participated in the talent search test at Johns Hopkins University, ranking first in Hawaii and approximately in the top 120 nationwide.

During middle and high school, Zhou had average grades, was somewhat rebellious, and liked to resell game cards on the playground. He particularly enjoyed trading in the in-game market, finding the economic system within the game more interesting than simply leveling up or climbing the leaderboard.

In university, Zhou majored in mathematics and economics, graduating in 2009. He then continued to pursue a master's degree in economics and later went to Wall Street, working as a quantitative analyst in the back office of a rating agency similar to Standard & Poor's.

Entering Encryption Currency

Zhou got involved with encryption in 2011, and in 2013 decided to dive into the field by joining the YC-incubated exchange Buttercoin. He started investing when the price of Bitcoin was around $11 and has held firmly ever since.

After Buttercoin closed, Zhou joined Kraken and established an over-the-counter (OTC) desk, where he worked for two years. In the spring of 2016, Kraken launched Ethereum, sharing the market with Poloniex and Gate, providing the company with a sufficient revenue base.

The Establishment of Galois Capital

After leaving Kraken in 2017, Zhou founded the market-neutral strategy hedge fund Galois Capital and successfully raised about $5.5 million. Initially, he made money mainly through OTC, then did some basis trading, and later during the DeFi boom, he became one of the largest yield farmers for Yearn Finance.

In five years of operation, the team only experienced four months of losses, with a maximum drawdown of 1%. Zhou believes the key to success lies in maintaining a contrarian mindset towards the market, identifying opportunities where one is right and others are wrong, and uncovering potential gains through modeling, backtesting, and deep thinking.

Ethereum Merge and Luna Incident

Zhou expressed his views on the transition of Ethereum from PoW to PoS and estimated the long-term value of ETH POW. During the Luna collapse, Galois Capital earned $15 million, primarily from short selling and facilitating liquidations on the Anchor platform.

Market Changes and Future Outlook

Zhou believes that cryptocurrency trading is becoming increasingly difficult, with only occasional brief respites during bear markets. He is confident in Bitcoin's long-term value but is also concerned about the risks that Bitcoin's "final state" may face.

Regarding his career in the encryption industry, Zhou believes that overall it has been a pretty cool journey, with both regrets and achievements. He advises young people to be confident, start their own businesses early, while also maintaining skepticism and being ready to overturn their own conclusions.