Skip to main content

My view on crypto investments

Dear people,

I would like to share my view on the current state of crypto currency markets.

I do not think that this is the right time attack crypto markets with a "quant" approach trying to identify inefficiencies in or between cryptos (I am not talking about structural inefficiencies that can be exploited like cross exchange arbitrage etc.)

Inefficiencies that we used to seek in settled assets require some level of macro ground (things like economic purpose, history, role in the value chain of the asset to be modeled) which helps us come up with some hypothesis on possible future behavior. Additionally, pure data driven approaches is a challenge due to the amount and quality of available data.

Looking at the current state of crypto markets, I see this more as a value betting opportunity than an inefficiency seeking opportunity. I prefer seeding, which is betting on a set of cryptos after some kind of filtering and keeping the same amount of equity on market leaders Bitcoin and Ethereum.

One of the filters I use for betting is the ratio of developers to days on market. Because I believe in the power of ecosystem.




Comments

  1. Really got a useful blog to read today. Its very informative, keep posting more like this.
    Sebi registered advisory company

    ReplyDelete
  2. I really found this blog post very useful thanks for sharing this post
    Mcx tips

    ReplyDelete

Post a Comment

Popular posts from this blog

Two Strategies you can start trading tomorrow - Time of Day effects in FX continued

My latest post at http://quantsjourney.blogspot.co.uk/2017/09/time-of-day-effects-in-fx.html was on time of day effects in FX and I was claiming that you can actually make money with simple strategies depending on time of day.
Below you will find 2 very simple strategies you can play with and make some money. Do not forget sending my 20%, I know I can trust you.
I will now test these strategies with M15 bars with my quick and dirty backtester on 15 currency pairs including majors. Backtesting period is 01.01.2007 - 05.05.2017. The charts are profit in pips for the pairs where the strategy has positive P&L, these are not equity curves with equally spaced time, the horizontal axis is number of trades. But obviously equity curves will be similar with some gaps due to days with no trades.
I almost did not optimize these strategies, there is room for improvement.
Strategy one: Short at GMT 09:15 am, do this on Wednesday, Thursday and Friday, close after 5 hours. Check out EURUSD!

EDIT …

Struggling Quant Episode 1: How I lost USD 500.000 while figuring out the link between questions, math, stats, coding and trading

Say that you are 30 years old and you have a good 25 years to work hard. Instead of going down the easy way of working for someone else during the day and killing time in the evenings and weekends, you have chosen the hard path of quantitative trading and started the heavy work. How many profitable trading ideas you can find in 25 years. Lets say you can figure out and test ideas in 10 days, 36 ideas a year and 900 ideas in 25 years right. Since this is my post, I am rounding 900 to 1000. Assuming a hit rate of 5%, 50 profitable ideas in 25 years, 2 per year and lets also say a profitable idea makes 20% per year. Depending on your initial capital, you will make X USD in 25 years. Lets say this X is USD 12.500.000 for me. USD 500.000 per year in average. This is my potential if I start doing things right now, right? So if I do things wrong for a year, I lose USD 500.000, this is what I did last year. I could not figure out how to operationalize all the scientific literature, huge qua…

Trading Decisions of Your Stone Age Grandpa can Make You Money in FOREX

Why Ferrari or Rolex does not price their products at 149.999 or 12.999 but most of the items you see in your supermarket is priced like 4.99? Because they never like to be positioned as a bargain. Did you know that we tend to chose the price with less syllables even if the two prices have the same written lenght? These are some of the pricing strategies used by marketers.This is a very interesting topic and you can even find yourself deep in neuroscience while reading about it. Check this site, it gives 42 pricing methods to influence your brain, crazy, https://www.nickkolenda.com/psychological-pricing-strategies/We also deal with prices when trading and I believe there are some sub-concious forces in play. Knowing some articles on things like the effect of round numbers in trading, I see some more potential here and I find this worth digging more not as standalone trading strategies but more as filters. At the end of the day, no one knows how the price feed effects the primitive you…