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Characterized by a wide variety and high volatility, cryptocurrency makes it difficult for ordinary individual investors to invest and manage their own crypto assets. Meanwhile, institutional investors are gradually becoming key players in the cryptocurrency market.

A total of more than 100 cryptocurrency funds were established in 2017. Cryptocurrency funds are not only the fastest-growing category in the hedge fund industry, but also rank among the best in terms of performance. In addition to hedge funds, many fintech venture capital firms have invested in blockchain startup projects and launched blockchain VC cryptocurrency funds. 2018 will witness the establishment of more cryptocurrency funds. Meanwhile, hedge funds will allocate more crypto assets in their portfolios.

To keep abreast of the trend, CryptoStrategies joined hands with Harry Capital, Grand Shores Capital, Manzi VC and other top blockchain-oriented capitals and private equity firms and held Crypto Asset Investment Summit entitled “connect the world, empower the future” at West Lake Villa in Hangzhou, Zhejiang Province in China. The conference invited industry leaders, quantitative trading teams and investment institutions to share insights on the future development of cryptocurrency market, global asset allocation trends and crypto asset quantitative trading strategies.

Many successful traditional hedge fund companies have long used multiple hedge fund managers and multiple trading strategies to reduce investment risks and maintain stable returns. Traditionally, excellent strategies tend to be concentrated in a few top investment companies. With blockchain technology, CryptoStrategies has broken new ground in this regard. All strategists can publish and showcase their performance on CryptoStrategies platform and investors can invest selected strategies according to the platform’s rating & ranking system. CryptoStrategis will reward top-performing trading strategies and set up cryptocurrency funds for them. Good cryptocurrency trading strategists can therefore become fund managers on CryptoStratgies platform.

As a pioneer in the crypto asset management industry, CryptoStrategies, together with crypto asset management experts and strategy allocation experts, conducted in-depth discussions about crypto asset strategy and its allocation during the meeting.

Mr. Yao Yongjie, founding partner of Grand Shores Capital, delivered a keynote speech in the conference. According to Mr. Yao, blockchain is the Internet of value plus a global version of the NASDAQ and its development is alternately driven by infrastructure and implementation applications. With the emergence of an increasing number of cryptocurrency banks, crypto assets and trading strategies, asset digitalization will become a major trend.

Mr. Jiang Mingde, renowned economist and chief expert consultant of Hongzhe Group, made a keynote speech about crypto asset allocation from macroeconomic perspective. He believed that the cyclical nature of macroeconomic development and uncertainties that affect asset price factors are key elements in asset allocation and blockchain technology’s featuring transparency, openness and irreversibility make crypto asset allocation widely concerned. With the integration of traditional economic development and crypto economic development, crypto asset as a new asset category has entered the area of asset allocation. The financial market holds an open and inclusive attitude towards crypto assets. Bitcoin futures trading has been listed on CBOE and CME at the end of 2017. NASDAQ has planned to launch cryptocurrency trading this year. Top investment banks including Goldman Sachs and Barclays have scaled up their research and investment in the cryptocurrency market.

Doctor Chern Lu, guest professor of Hong Kong University and member of Shenzhen CHRD Committee, made a keynote speech about quantitative trading and risk control of crypto investments. Dr. Lu made an analysis of two basic hypotheses about bitcoins from mathematical perspective. First, there are always more good people within the bitcoin network than bad ones. Second, encryption algorithm based on elliptic curve can never be easily deciphered. In accordance with Mr. Lu, from statistics to the evolution of AI, the method of acquiring alpha is constantly evolving. Traditional finance has gradually been revolutionized while cryptocurrency quantitative trading has also been gradually upgraded. The trading object of quantitative trading is the hedging spread between asset price (one-dimensional) and asset price (two-dimensional), changes in volatility correlations of assets (three-dimensional) and volatility of volatility (four-dimensional). As the dimensions of trading objects rise, the complexity of trading strategies increases exponentially. He also believed that quantitative trading was not only about using finance and computer technology, but also about understanding the microstructure of the market.

In the roundtable discussion, Mr. Cao Hengrun, president of Haizheng Investment, argued that if one had experience in traditional asset strategy development, he would be more proficient in the development of crypto asset strategies. Take arbitrage strategy as an example: in consideration of the types and prices of cryptocurrency and the number of exchanges, arbitrage strategy would gradually upgrade from the basic version 1.0 to 2.0 and then 3.0. It would be more complex and more effective.

Aubrey Yang, investment director of Quantoken, said that cryptocurrency market operated on a 24-7 basis and there was unlimited rise and fall, posing grave challenges to ordinary retail investors. Therefore, cryptocurrency trading is usually concentrated with less market participation. As cryptocurrency strategies have a high demand for risk control, the structure needs to be constantly adjusted in order to seize opportunities and maintain the gains.

Ran Yi, co-founder of CryptoStrategies, interviewed by gongxiangcj.com, Youth Times, mybeat.cn, Suanlizhiku, Suanlicaijing and Lianlianzixun, made a detailed analysis of the categories, application and risk control of cryptocurrency trading strategies. Ran said that one distinctive feature of crypto asset was its ability to trade and arbitrage on a wide variety of platforms whereas traditional asset could not measure up in this regard. Crypto assets, however, were faced with risks including risks from counterparts and the potential hacking of exchanges. It remained unresolved to ensure fund security.

Moreover, Ran also believed that there would be an increasing number of crypto financial instruments in the future and their development would draw inspiration from traditional secondary markets such as leverage and currency borrowing.

When asked about cryptocurrency strategies, Ran said that the returns of crypto asset secondary market strategies such as arbitrage strategy and trend following were several times higher than those of the same strategies in traditional asset secondary market. Presently, as most of the strategists of cryptocurrency strategies have not done researches into traditional secondary market, many cryptocurrency strategies are of mixed quality.

When it came to distinguish cryptocurrency strategies, Ran suggested that ordinary investors could make a preliminary judgement based on sharpe ratio and see if the strategy development team had studied strategy development in the traditional secondary market. CryptoStrategies could provide sound strategic analysis for institutional investors. Through in-depth quantitative analysis, CryptoStrategies could make a rating & ranking of the strategies from the perspectives of returns, risks and relative value, select high-quality strategies and break new ground in the area of crypto asset management.