Eight Questions: Lincoln Bartlett, CFA, Head of Trading, Anchorage Digital

Welcome to Eight Questions, where we profile individual members of the Anchorage Digital team, diving into their career paths, what brought them to crypto, and what makes them tick. Why eight? Because it’s the number of decimal places a bitcoin can be divided into. It’s also the last single digit number in a Fibonacci Sequence, and we like that.

Next in our series, meet Lincoln Bartlett, CFA, Head of Trading at Anchorage Digital and a Wall Street veteran, with over a decade of buy-side and sell-side experience at some of the biggest firms. A native of Pennsylvania, Lincoln holds a B.S. from Penn State University and an MBA from Villanova University. He is based outside of Philadelphia and enjoys spending time with his family and pursuing photography.

1. You joined Anchorage Digital after over a decade on Wall Street, where you personally executed more than $3 trillion in trades. How does trading on Wall Street compare to trading in crypto?

My time on Wall Street was focused on executing market-moving orders with very specific performance benchmarks. The best traders know how to use their tools (algorithms, choice of liquidity, iterative improvement through transaction cost analysis, etc.) to best control for variables such as liquidity, volatility, and predatory algorithms.

The contrast is interesting, on Wall Street, there are countless firms that manage this balance in a very mature fashion. Conversely, only a few firms in the crypto space are building out the technology and regulatory stack needed to support these more sophisticated types of trades.

2. How does that difference play into the work you do at Anchorage Digital? What should people know about our trading features that they may not already know?

My role is focused on building a best-in-class digital asset trading offering, inspired by the best in Wall Street technology and leveraging the unique possibilities of blockchain, including more efficient execution. Day to day, my background in traditional markets, trading strategy, and risk management informs how I lead our trading desk.

There are three easy to overlook yet impactful ways we support our clients in trading:

1. First, and most importantly is how we’re set up. At Anchorage Digital, we run an agency trading desk, meaning there is no conflict of interest in execution. Since we execute trades on behalf of clients and have no ownership over the assets being traded, our goal is always to source the tightest prices possible for a fixed commission. This approach to trading is what it means to put clients first.
2. Second, is our new advanced trading platform. This gives clients hands-on control of multiple trading algorithms, executing across numerous liquidity providers and has been our most requested feature. It is quite uncommon across the industry to offer this powerful combination directly to clients, and it sets us apart.
3. Lastly, we offer a full pre-trade analytics suite that visualizes various execution approaches, complemented by post-trade transaction cost analysis. Many clients have come to rely on this quantitative data, enriched by our decades of cumulative trading experience, to properly balance market risk and market impact during execution.

3. At Anchorage Digital, all trading takes place from qualified custody. Can you talk more about how this works?

If the last year has taught us anything, it is that not all custody solutions are created equal.

There is a vast continuum of different approaches to technology, risk management, and regulatory oversight. Institutions realize now more than ever that choosing the right custodian is critical to the safety and security of their assets—not to mention future-proofing for regulatory changes on the horizon, which may require that certain institutions, including SEC-registered investment advisers, use a qualified custodian.

As a federally chartered digital asset bank, Anchorage Digital Bank is an unambiguously qualified custodian, providing institutions with a bankruptcy-remote custody solution that segregates client assets in on-chain vaults. Trading directly into and from Anchorage Digital Bank’s custody offering ensures client assets always remain in their name and never leave qualified custody. This is a major differentiator, and one of the primary reasons why institutions chose to trade on the Anchorage Digital platform.

4. Anchorage Digital is global, providing a platform for institutions worldwide to participate in the 24/7/365 digital asset market. How do you lead a team that facilitates round-the-clock trades for clients?

One strength of digital assets is that the market never closes. When launching our trading desk, we decided to invest in continuous coverage for trading and settlement operations. Leading a team of traders located around the globe has its complexities, but I’ve been a part of global teams since the early days of my career.

One essential concept at Anchorage Digital is our “one consciousness” approach, which is a concerted effort to stay on the same wavelength. Being a remote-first firm counterintuitively makes it easier for global teams to stay connected, as conversations occur online and through video calls, eliminating location-specific conversations that exclude other regions. In fact, embracing the flexibility and efficiency of remote-friendly work has resulted in much higher levels of engagement from top talent. This is complemented by regular, in-person gatherings for team building and strategy.

5. We serve a wide range of institutions, from SEC-registered investment advisers to decentralized crypto protocols. What are some examples of different needs they have for trading?

Yes, we serve a wide-ranging set of institutional clients, who each come to us with a unique set of needs that can vary on a case-by-case basis. For example, some clients know which assets they want to buy or sell, but don’t feel confident deciding how to optimally execute the trades. These clients prefer to entrust trades to the white-glove service of our traders and operations team as an outsourced trading desk, instead of staffing a front, middle, or back office operation themselves.

Other clients have years of execution experience, oftentimes from Wall Street, and prefer to dive deep into our advanced trading platform to analyze market liquidity and adjust settings directly.

6. After market events of the last 12 months, risk management is more important than ever. How does Anchorage Digital manage counterparty risk when it comes to institutional trading?

The rapid growth of the digital asset ecosystem created a land grab for critical market infrastructure, including custody, trading, and staking. The past year has shown that many firms cut corners with risk management practices to satisfy the demands of the market as quickly as possible.

At Anchorage Digital, our strategy has always focused on the long-term, which requires risk management to be front and center. We also are held to extremely high standards for regulatory compliance as home to the only OCC-chartered digital asset bank.

Our choice of counterparties on the trading desk is a perfect example of putting risk management at the center—every week we have liquidity providers asking to partner, but we have very stringent requirements enforced through recurring due diligence by our dedicated risk team. A common phrase on the trading desk is that it is not worth picking up pennies in front of a steamroller; eventually you will get run over!

7. You recently earned your MBA from Villanova University while working full-time. How did you balance working in crypto, raising a family, and attending graduate school?

It was indeed a busy time! In hindsight, I attribute the balancing act to two major factors: passion and a flexible working environment. Across both my career and personal life, I’ve learned time and time again that being truly passionate about achieving a goal is what often separates the good from the great.

Passion brings the energy and intellectual curiosity to keep digging deeper, even when it’s not required. It’s hard to artificially force passion, so in my life I’ve tried to double down on my natural passions. Pursuing an MBA has always been high on my bucket list, as I’ve seen first-hand how the strategy and leadership skills learned can revolutionize a business. This end-goal helped push me through each individual assignment and exam without feeling overexerted.

Just as important, was the flexibility I had at Anchorage Digital. It’s what gave me the ability to attend classes and work on coursework. The company’s commitment to growth has always made me feel supported to invest further into my own education, be it this formal degree, or more research into the endless world of crypto.

8. Tell me about one of the hardest trades our team has had to handle. What was the challenge and how did you manage it?

We had a client who wanted to trade a major position from one low liquidity digital asset to another. Doing so quickly would have cost upwards of 10%. However, our desk worked the order using algorithms to seek liquidity on multiple venues, saving significantly on bid/ask spread and market impact. Furthermore, by working the sell and buy in parallel, the client maintained their long view on the market throughout the trade.

Properly managing execution costs significantly improves a fund’s ability to outperform its benchmark. We have developed advanced trading tools to make trades like this easier to perform for our institutional client base.

Interested in using our new advanced features to trade from qualified custody at Anchorage Digital? Please get in touch to learn more.