Gobsmacked is not a word you hear very often. Spell check doesn’t like it. It’s usually held for a time when most other words seem small, and it was not a small feeling Chris Hehmeyer had in 2017 when he first sent ten dollars’ worth of Bitcoin from one wallet to another. Hehmeyer knew finance from the inside out and yet here’s where that word comes in — gobmacked — by a peer-to-peer transaction using Internet money with no intermediaries like a bank or Western Union in sight.

“It’s an astounding development in the evolution of technology,” he told me recently.

Four years later, he was all in on crypto, had left the futures world behind for the new frontier, but faced a problem. The crypto trading system he’d created, Hehmeyer Nortide AG, needed to be headquartered in Zug, Switzerland. Pulling up roots in Chicago to move across the ocean might be the right thing for his business but how would his wife respond?

“I was excited by the prospect, but if it didn’t work for her then it wasn’t going to work for us,” he said. These being Covid times, of course, the Hehmeyers weren’t in Chicago when Chris proposed the move to his wife. They’d been in Arizona for quarantine and took evening walks through the desert where they’d talk about where their lives were headed.

“She was like, ‘okaaaaaay, yeah, that’s interesting, I think I’d be game,” Hehmeyer remembered her saying. “She was up for the adventure.”

As a lifelong trader – he was inducted in the Futures Industry Association Hall of Fame in 2019 – this would just be the most recent adventure for Hehmeyer. He grew up in Memphis on the Mississippi River where the cotton and crops flowed downriver needing to be bought and sold.

“Memphis is a trading town,” he said.

His brother Philip was the chairman of the New York Cotton Exchange at a time when the New York Mercantile Exchange was still a potato market and hadn’t listed the crude oil or gold contracts that would make its reputation.

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The ag markets, however, didn’t interest Hehmeyer. He had his eye on the revolution in futures trading that was just being born.

“When I was getting out of college I had a few friends who said ‘you should go to Chicago, they’re trading futures on money,’” he said.

The market for derivatives had up until the mid-1970s been used to hedge crop prices at the twin towers of the Midwest, the Chicago Board of Trade and the Chicago Mercantile Exchange. New contracts that allowed speculators and hedgers to bet on the price of currencies or how interest rates would rise or fall were proving to be incredibly popular and profitable.

Hehmeyer walked on to the floor of the Chicago Board of Trade for the first time on Aug. 1, 1977, only a few days before the newest financial future would debut. It would track U.S. Treasury bonds, giving investors a pure play on the macro-economic health of the American economy and the world’s tolerance for risky assets.

He crashed in a spare bedroom at this aunt and uncle’s house in Chicago, where the only two rules were to let them know if he’d be home for dinner and to put his dirty laundry down in the basement to be washed.

“It felt like we were the pioneers, and we were part of something that was growing really fast that the whole world hadn’t fully recognized,” he said of the dawn of U.S. Treasury futures trading. “We sensed it was going to be a big thing, and that’s the way crypto has felt to me the last couple of years, and still feels like it.”

The US Treasury pit soon became his life and he’d go to bed with the shouting voices of the other traders ringing in his ears. Inflation was affecting almost every aspect of the U.S. economy in the late 1970s. Treasury yields hit about 14% and mortgages were north of 20%. Traders like Hehmeyer lived off the weekly consumer price index report, an inflation gauge.

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“We opened the pit and those reports came out at exactly the same time,” he said. “It would just go berserk.” While standing in a pit for six and a half hours could be grueling, and there were times of summer doldrums, other days went electric.

“We had one day, I think it was the day after Reagan got elected,” Hehmeyer recalled. “The market was limit down and then it was limit up and it was just really crazy days in the bond market.” That volatility can be a money-printing machine for someone with nerves and nowse, and of course it can blow you out in minutes. No matter what, though, the Chicago pits also minted outlandish characters and larger than life antics.

“There weren’t of course many women, and the women who were there, I have a lot of admiration for them because they had to put up with a lot of crap. But they were usually pretty tough, and they didn’t put up with any crap,” Hehmeyer said. Hehmeyer’s friend Heather Freitag was one. She stood about six feet tall. When the New York Stock Exchange tried to list Treasury futures to compete with the Chicago contracts, Freitag was one of several Chicago traders who went to lower Manhattan to try it out.

“They had this huge, splashy day of trading US Treasury bonds at the New York Stock Exchange,’ he said. “Heather was pushing her way up to the front and . . . she pushed this guy, and this guy looked at her and said, ‘out of the way, lady! This is a man’s business.’ And she said, ‘listen, buster, I’m a trader from Chicago and I’ve got a fur coat to prove it.’”

Or there was the day when the boisterous trader Sammy Segal didn’t show up on time because he’d been out drinking late the night before. Another trader, who knew Sammy was fine, told others that in a terrible accident the night before Sammy was killed in a car crash.

“Everybody said, ‘oh my god,’ it was awful,” Hehmeyer recalled. “And then Sammy shows up about 10:15 and everybody was like, ‘what are you doing here?’” The other traders had taken up a collection for his family, about a couple thousand dollars, that was subsequently used to throw a cocktail party.

Hehmeyer started as a runner at the Chicago Board of Trade and worked his way to becoming a member so he’d have full trading privileges. He mostly acted as a broker on the floor, which means he traded for customers, not his own account. In 1985 he co-founded Goldenberg, Hehmeyer & Co., a futures brokerage. Soon he was serving on the board of directors at the exchange and become involved in industry groups like the National Futures Association and FIA.

In 1989, the Federal Bureau of Investigation had spent years and millions of dollars to infiltrate pit trading at the Board of Trade and the CME. It all started when the agriculture giant ADM ran afoul of the Board of Trade for trading violations, leading to fines. Yet ADM representatives didn’t show up to the appeal they lodged with he exchange, said Hehmeyer, who served as a director at the Board of Trade at the time.

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“So the board really let ‘em have it,” he said. That in turn incensed the head of ADM, Dwayne Andreas, according to Hehmeyer. “Andreas was very close to the Ronald Reagan/George Bush political machine, and he correctly pointed out that there were some people on the exchange floors doing stuff that they thought was illegal,” he said. “So the FBI spent a huge amount of money in the Board of Trade and the CME . . . infiltrating the pits.”

After all the time and money spent, however, Hehmeyer said the FBI found relatively minor problems with floor traders – in many cases it was mail fraud when trading statements were sent to customers where floor traders didn’t know what they were doing was a federal crime, he said.

By the late 1990s and early 2000s another big shift was underway in the futures market – computerized trading. Eventually, electronic trading would be the death of the floor pits that put Chicago on the modern financial map. Hehmeyer was slow to adopt to the new technology, which required massive outlays in computer infrastructure to keep up with the ever-faster pace of programmed buying and selling. Once electronic trading took hold, it wasn’t long before traders realized they could gain an edge by being just a fraction of a second faster on a trade, and high-frequency trading, or HFT, was born.

This was a whole new ball game that Hehmeyer didn’t find as appealing as jostling in a pit for hours a day.

“It did take some of the fun out of it.,” he said. “That’s not sour grapes, but I wasn’t very good at it. Some of those guys are so talented, some of these technical people are so good at it and I didn’t find it as much fun.”

Hehmeyer’s futures brokerages morphed several times over the years and he began trading crypto through Hehmeyer LLC in 2018.

“There’s a very positive feel about crypto like back in the days when derivative instruments were first being used and discovered and growing” for financial products such as interest rates and currencies, he said. “It’s going to allow human beings to interact in ways that they’ve been able to do before.”

“And she said, ‘listen, buster, I’m a trader from Chicago and I’ve got a fur coat to prove it.’”

The technology that supports cryptocurrencies and web3 applications is miles ahead of anything developed for the creation of financial futures, so Hehmeyer is not one to compare the two. Yet like financial futures, he said crypto allows everyday people to have access to the market. Before futures on Treasury bonds, for example, retail investors had no way to trade Treasuries. That was the sole playground for the largest banks.

As Hehmeyer moves deeper into crypto, he’s helped create Warwick Capital Management, a Bermuda-based digital asset hedge fund and Hehmeyer Nortide, which came about through the merger of Nortide and Hehmeyer LLC in early 2021. Hehmeyer Nortide doesn’t hold risk overnight, trades for its own account and faces counterparty risk but requires known-your-customer and anti-money laundering checks on all trading partners, Hehmeyer said.

The seven-month old Hehmeyer Nortide is currently talking to investors about a Series A capital raise, he said. Hehmeyer sees crypto, with a current total value of $1.8 trillion, going to $5 trillion in five years.

I asked Chris if he could have ever imagined himself in Zug, Switzerland, chasing the trading opportunities on the forefront of an asset class that didn’t exist until 2009 – in similar ways to how he went about it in the late 70s and early 80s in the Chicago futures pit. He took a second to answer and did so in the humble and thoughtful way that has endeared him to so many people who’ve worked with him over the years.

“No, I wouldn’t have thought that,” he said. “I’m vulnerable to thinking things are static. That the Board of Trade will always be there. Can you imagine the Board of Trade floor not being there?"

“But the technologies are so dynamic now and so fast moving that they go parabolic,” he said. “When I go down to the Board of Trade now all that energy is gone, the people are gone.” While there is a “very good” crypto scene in Chicago, it doesn’t hold the same centralized power the exchanges wielded in their heyday.

“It feels a bit like future shock. At times I look around and think, ‘oh my God, I can’t even keep up with all this stuff, it’s changing so fast a guy my age should be careful.’”

A darker edge is out there, too, Hehmeyer said. The nuance lies in the friction between the acceptance and ease of use for everyday people in crypto versus the ‘fuck-it let’s build as fast as we can and see what happens’ mentality that can take things off the rails in a hurry. I might be paraphrasing there a bit, but that’s his concern on the downside.

“I’ve gone and wandered around the metaverses, places like Decentraland, and it has some implications that aren’t all necessarily good. There’s a lot of positives about these technologies – it liberates human beings to be in more control of their own data, their own information, their own assets their own lives.”

“On the other hand, the technologies are almost like they’re out of control,” he said. “These blockchains are developing things so fast that I don’t know where all of that goes.”