Risk free interest is considered the holy grail of investors right? Everyone is chasing yield, dividends, passive income. The income investor is not chasing pump and dumps or ICOs. The value investor is not chasing "growth". The "dividend growth" investor is chasing both growth and income. So I started looking deeper into what is possible with algorithmic trading partially inspired by the confusing yet not impossible mathematics of Bitconnect.
It turns out that some of the mathematics behind Bitconnect makes sense but the problem with Bitconnect is that while it is true that a bot can generate interest daily, it's usually way less daily rather than 1%. The most successful hedge fund I know of is Renaissance Technologies and they don't even get 1% daily. But Renaissance Technologies are doing something right because they are generating ridiculous profits using algorithms and data.
Renaissance Technologies
- The Medallion fund has averaged a 71.8% annual return
Enigma Catalyst enables algorithmic trading for the crypto-space and empowers the individual
The idea behind Enigma Catalyst is to use the wisdom of the crowds, data markets, and algorithmic trading. In this way you will have the trading bots, you will have the "secret sauce" algorithms. You will have the data. Due to cryptography you will not have to deal with so much of the human element. It is possible to win at trading, and it is possible to get daily yield guaranteed by mathematics. Options trading shows that it is possible and the Renaissance fund proves the mathematics in the practical space.
Hedge funds can make profit with a large enough liquidity pool but from my "limited" understanding it's all about the algorithms and data. It's about the metrics and measurements.
References
- https://www.bloomberg.com/news/articles/2016-11-21/how-renaissance-s-medallion-fund-became-finance-s-blackest-box
- https://www.bloomberg.com/news/articles/2017-04-25/renaissance-mints-another-billionaire-with-two-more-on-the-cusp
- http://www.realclearlife.com/science/medallion-fund-quantitative-hedge-fund-open-just-300-worlds-greatest-money-making-machine/
- http://www.enigma.co
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