The crypto-space is going through rapid changes when it comes to trading, such as more trading pairs, availability of margin trading and futures trading, and security tokens. Not only the changes are creating more opportunities but making it more complicated for retail investors.
Today, other than holding BTC – it is fairly difficult trade baskets of tokens. Why trade baskets of tokens? The reason is diversification, volatility, and opportunity. Trading multiple tokens can distribute your risk across different assets (avoid correlations), and lower your volatility. If you have an edge, you can diversify your bet into focus-grouped of assets to take advantage of the opportunity.
This was a problem in the traditional market for retail investors, which led to the introduction of mutual funds in the 1970s, and furthermore widely adopted when 401k law was enacted then proliferate through the late 1980s. You can observe the dramatic ownership stocks by retail investors skyrocketed toward end of 80s and through 90s. This pattern gives hints to a similar trend in crypto when baskets of tokens/trading strategies are packaged to provide diversification, volatility, and opportunity that larger investors enjoys.
For crypto, the main approaches are investing in crypto-funds (locks your funds, and management fees), family offices (if you are wealthy of the hire your fund manager), simple crypto trading strategy apps, OR build your strategies (and manage your platform).
We believe we can offer a truly democratized solution that can source highly profitable strategies, easy to use, low in fees, and maintain user custody in their exchanges. We have decided to jump ahead of this trend. Here, we present this as the 3-phase plan to democratize crypto trading strategies
Phase 1: Crypto research platform
In the first phase, we are launching the crypto research platform for our team to begin building trading strategies for retail users, and open it up to a community of algorithm builders to experiment. The algorithm builder will have access the cutting edge backtesting, data to design well-performing strategies. This step ensures that all the tools we use are the same tools the community uses to build its algorithm. This platform seeks to enable algo-builders to be able to build strategies they could, or even better than them building on their custom system, or investment firms they are working or worked for.
We’re excited to launch it soon. It is a custom Python-based Cloud environment where you can edit the source code, backtest, and review the data, as easy as Google Docs. There are no special tools to install, and it is well documented, and always available. It is connected to our discussion forum where you can discuss strategies, and get inspired by other people’s ideas.
Phase 2: Live Trading Platform
In the second phase, we will be launching the “live trading” app for retail investors. This is an easy way to use wallet which integrates with their favorite exchange. The user can start using one of Quanta’s built in trading strategies from within the wallet with a single click. We believe this approach gives the user the best selection from assets to choose from, and the financial products available to them (eg margins, and futures). Rebalancing is automatic and only pays for exchange fees. This minimizes the user from missing opportunities and gains access to new opportunities.
Phase 3: Marketplace for Trading Strategies
In the third phase, we will be opening “marketplace” which will be making all “approved” trading strategies submitted by 3rd party algorithm builders available to “retail investors”. We will be engaging with the best private crypto trading fund to individual algorithm builder. The marketplace will offer these trading strategies via a flat fee + a success fee system to incentivize good strategies to be offered.
In this day & age, you can go to your brokers like Vanguard, and access to high-quality ETF or Mutual funds that give you diversified exposure to the market with a lower risk of volatility. For crypto-space, we should be one step ahead of the traditional market. We believe the user should be able to access to direct access to the best strategies available to them from the top crypto-funds to individual algorithm builders. The launch of phase one is coming soon, then in the next 3 months, we will launch phase 2, then after that phase 3. As always we’d love to get your feedback and discuss more.