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Algorithmic Trading Comes to Crypto

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When it comes to financial investments, most people have the same goal – maximising profit. Most of us want to make money, and in this sense, the more, the better.

People employ numerous investment strategies to try and achieve the maximum profit possible from their investments. Unfortunately, these efforts are often counterproductive to the investor’s goal. For instance, people spend hours pouring over market reports, watching for market movements, or following their favorite gurus on social media. They make critical decisions based on this information, and all too frequently, those decisions are to the detriment of the ultimate goal – maximum profit.

Unfortunately, the problem isn’t the information. It’s ourselves.

There are hundreds of cognitive biases that impact people’s’ ability to make the best determination in any given situation – including their investment decisions. As a result, investors unwittingly integrate emotion and personal preference into decisions that should be dominated by logic and intentionality.

Bias Impacts Our Financial Decisions

While there are hundreds of biases that impact our decisions, Deloitte identifies three biases that primarily hinder decision making – especially when finances are involved. In a detailed report released in conjunction with The Wall Street Journal, Deloitte recognises optimism bias, expert bias, and narrow framing as three of the most harmful prejudices afflicting our investment decision.

Optimism Bias

algo tradingOptimism is an endearing quality in relationships, but it can be utterly destructive to wise investment decisions. As Deloitte notes, “Optimism, while not categorically bad, is often closely tied to overconfidence.”

In a cited study, CFOs were asked to provide a confidence interval for predetermined stock market index funds. Only 33 percent of their selections actually performed as expected. The study found that these CFOs were equally as bad at predicting their own company’s market performance.

Most people, even C-suite executives are frequently wrong, but most people can’t acknowledge their optimism until it’s too late. In other words, people tend to be unabashedly optimistic until the negative results roll in, and they frequently do.

Expert Bias

Optimism bias is frequently fueled by expert bias. Investors tend to have a select group of “experts” that they follow and listen to. This closed circuit of advice creates an echo chamber that falsely feeds optimism.

Many experts are really nothing more than pundits, and as the report notes, “Just because someone was the most accurate in the past does not mean we should only rely on his or her opinions going forward.”

Narrow Framing

Both optimism and expert bias coalesce in narrow framing, the compartmentalisation of wholistic decisions into individual choices. For instance, investors frequently focus on one data point or indicator rather than making wholistic choices using complete information.

When considered together, it’s evident that, despite our abounding confidence, people are definitely not as good at making decisions as we think we are.

You Haven’t Seen Anything Yet

Cognitive bias undoubtedly plays an integral part in sidetracking our investment decisions, and its influence is amplified when investors enter crypto markets. In fact, crypto markets can be so tumultuous that investors use an acronym, FUD, to express that fear, uncertainty, and doubt are prodigious among crypto enthusiasts.

Unlike traditional investments, cryptocurrencies trade 24/7. The market never closes, which means that it is always active and that activity can be uncomfortably aggressive. Double-digit daily price increases or decreases are not uncommon, and this invites investors to make knee-jerk decisions based on relatively limited information.

Moreover, the crypto community is dominated by “to the moon” expectations, and FOMO, another crypto-centric acronym referring to the “Fear of Missing Out”, becomes a viable investment model for too many people.

In short, crypto investors have their work cut out for them. Fortunately, they don’t have to navigate crypto markets alone. 

The Blackmoon Solution

Although people are inherently bad at making rational decisions, computers are designed to only make rational decisions. Blackmoon brings programmatically executed solutions to crypto investors. An array of three simple strategies allow the blockchain cohort to deliver alpha on cryptocurrencies like Ethereum.

#1 One Day Most Volatile Strategy

One Day Most Volatile Strategy is focused on delivering alpha to ETH by tracking those coins that have had the largest volatility during the previous 24 hours period. The core objective of the strategy is to generate the returns corresponding to the yield of the crypto assets with the largest volatility.

#2 Top 20 Market Cap Monthly Strategy

Top 20 Market Cap Monthly Strategy is focused to deliver alpha to ETH by tracking those coins that have had the largest market capitalisation in the previous three month period. The core objective of the strategy is to generate the returns corresponding to the yield of the cryptocurrencies with the largest capitalisation.

#3 Daily Delta Rebalancing Strategy

Daily Delta Rebalancing Strategy is focused on delivering alpha to ETH by adjusting the basket of the top 6 market-cap of coins and cash. The core objective of the strategy is to generate the returns corresponding to the yield of the top 6 cryptocurrencies with the largest capitalisation providing downside risk protection by dynamically allocating portfolio between cash in crypto.

How to Get Involved

BlackmoonCrypto markets are currently experiencing a prolonged downturn, but there are plenty of opportunities to profit. However, those opportunities are unlikely to be discovered using our own intuition, research, or decision making. Our cognitive biases make it improbable that we will succeed.

However, when coupled with the power of AI and machine learning, these strategies provide a compelling, computer-driven method for capitalising on crypto markets. Visit the Blackmoon platform to learn more about our fund’s history and our expectation for future performance. 

This article was contributed by Blackmoon CEO Oleg Seydak.

*Readers should do their own due diligence before taking any actions related to any company, product or service mentioned. BitcoinAfrica.io is not responsible, directly or indirectly, for any loss or damage caused by or in connection with the use of or reliance on any content, product or service mentioned in this article.*

*Investment in cryptocurrencies carries a high degree of risk and volatility and is not suitable for every investor; therefore, you should not risk the capital you cannot afford to lose. Please consult an independent professional financial or legal advisor to ensure the product meets your objectives before you decide to invest. Regional restrictions and suitability checks apply.*

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46 Companies Join Binance Charity to Launch Stablecoin in Support of Feminine Health

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Binance Charity

An alliance of blockchain companies has joined forces to support a philanthropic project focused on the African continent. Led by Binance Charity Foundation (BCF), the charitable arm of the world’s largest cryptocurrency exchange, the initiative will involve the issuance of Pink Care Token (PCAT), a stablecoin that will operate on Binance Chain.

BinanceThe project will help channel funds to Uganda for the purchase of sanitary products, which many women lack access to. The first batch of Pink Care Token and sanitary pads is scheduled for delivery in the country in mid-July in Uganda, with the aid of government ministers.

“Pink Care Token is the first social-impact stablecoin issued on Binance Chain. A part of our mission is to promote cryptocurrency adoption, and I think charity is one of the most efficient ways to bring cryptocurrency value to more people,” said Binance CEO Changpeng Zhao (CZ).

Leading blockchain and financial companies that have pledged their support for the initiative include Ripple, Tron, Vechain, Matic, Arrington Capital, and Celer. As the size of the cryptoconomy has grown, delivering outsized returns to its early believers, many supporters within the ecosystem have sought to share their success with the world through altruistic means.

Despite their global nature, crypto assets have yet to permeate many of the world’s most underdeveloped nations, where access to food, shelter, and medicine remain challenges that must be overcome in addition to realising full financial access. Initiatives such as Pink Care Token provide an effective way of helping communities in some of the world’s most impoverished regions while capitalising on the transparency that is one of the hallmarks of the blockchain technology that underpins the industry. All of the funds that are contributed to the project and delivered in Uganda can be tracked on-chain.

Contributors are encouraged to join the campaign by donating at:
https://www.binance.charity/period-poverty

Funds will go towards ending ‘period poverty’ through providing sanitary products for Ugandan women, improving their quality of life and providing a clear demonstration of what the crypto industry can achieve through multilateral philanthropic efforts such as BCF’s Pink Care Token.

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Luno Survey Shows Low Consumer Confidence in Current Financial System

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Low Consumer Confidence

As the United Nations Monetary and Financial Conference celebrated its 75th anniversary on July 1, Luno released findings indicating that consumers from emerging markets have low confidence in the current financial system. The conference, also known as the Bretton Woods Conference, established the financial system we use today in 1944.

The Future of Money Survey

LunoLuno’s Future of Money survey discovered that security is one of the areas of concern in the current financial system. These views were given by 36 percent of respondents from South Africa, 35 percent from Nigeria, and 24 percent from the UK. The other areas of main concern are transparency and economic benefit.

Marcus Swanepoel, CEO of Luno, said: “The survey results show that emerging markets are seeking a change to the financial system which was created 75 years ago. The increase in population, changes to the distribution and inequality of wealth, at a time of tremendous steps forward in technology means that the current financial systems need to undergo another Bretton Woods moment.”

Furthermore, the survey showed that consumers from emerging markets have a more developed understanding, protection, and knowledge of money compared to those from developed markets. This is because they do not have direct access to wealth, the report explained.

Struggling Economies

Although our current financial system was established 75 years ago, many countries are still struggling economically. According to the survey, 27 percent of South Africans and 23 percent of Nigerians felt that their economies were performing poorly. This view was held in rural areas more than in urban areas because the former has inadequate financial systems.

Moreover, 23 percent of respondents in Nigeria and 22 percent of respondents in South Africa said it was challenging for them to send money overseas.

“We have seen little change to the global monetary system over the last 75 years, particularly amongst developed economies where financial institutions have built a system around the transfer of currencies, assets, and commodities which benefit a stable and strong economy. As technology advances, it is important that institutions globally find a way of adopting these advancements, enabling emerging markets to have the same access to money and transfer of assets,” Swanepoel stated.

The survey further revealed that 91 percent of South Africans pay for a personal bank account while 75 percent use mobile banking. Additionally, South Africa had the second highest percentage of respondents that said they invest in products such as mutual funds and stocks.

Luno is a global crypto company that carried out the Future of Money survey to understand the world’s view of the current financial system. The survey questioned more than 7,000 people from South Africa, Nigeria, Italy, Malaysia, the UK, France, and Indonesia.

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Youngest Cryptocurrency Entrepreneur in Africa Leads Education Drive in Ghana

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BlockXAfrica

Ghana and the rest of Africa continue to lack behind in bitcoin usage and adoption. Despite the fact that Ghana led the Google Trends chart for the keyword “bitcoin” recently and continues to be part of the top three on the same chart, the West African nation has recorded very low patronage of blockchain technology.

BlockXAfricaIn light of this, the ​Youngest Bitcoin Entrepreneur in Africa​, Elisha Owusu Akyaw, who started his journey of innovation in the blockchain space at the age of 16 seeks to promote bitcoin and blockchain adoption in Ghana through an education campaign.

The young Ghanaian has made headlines with his work in the industry, being described as the youngest “Bitcoin Entrepreneur” and was listed as part of the ​Top 20 Blockchain Influencers in Africa​ by BitcoinAfrica.io.

Elisha’s education drive will be done under the BlockXAfrica brand. BlockXAfrica is a Ghanaian based blockchain startup that seeks to bridge the blockchain and cryptocurrency education gap through advocacy, collaboration, and innovation.

BlockXAfrica believes that blockchain has a lot of potential in accelerating the development of Ghana, including fixing our financial woes through cryptocurrency usage, checking corruption through blockchain backed record systems, fixing our birth and death registry with blockchain solutions and more.

BlockXAfrica is made up of a group of young people from Ghana with the aim of teaching, advocating and spreading the gospel of cryptocurrencies. The aspiring blockchain advocacy powerhouse intends to do this through strategic educational campaigns and social intervention programs & projects.

BlockXAfrica’s education campaigns seek to enlighten people on the importance of cryptocurrency and its various use cases across the continent while addressing the various cryptocurrency scams that have invaded the industry in Africa which is one of the highest contributing factors to distrust in the technology by promoting tested industry standards.

Aside from education, ​BlockXAfrica​ will also be partnering with local developers to create innovations backed by blockchain technology to solve various social issues in Ghana. What’s more, the company will be donating some of its proceeds to charities across the country, as a way to show the masses how blockchain can change lives.’

BlockXAfrica organised its first meetup during the last weekend and plans to embark on a tour across the country.

The guest post was contributed by BlockXAfrica. 

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