In the last August issue of crypto-compass, we have conducted an Investment-Interview with Dr. Philipp kaller Hoff of the Proto-Asset Management GmbH. The investment company not only manages large crypto-Accounts of ICOs and Mining companies, but has developed a hedge Fund specifically for the crypto-market. By using various investment strategies, methods of data analysis and the ability to bet on falling prices, is to be continued to outperform Austria, the market of crypto currencies. In the future, investors will benefit via the Token from the skills of a crypto-hedge Fund. To learn more about the investment strategies and the market’s assessment of Dr. Philipp kaller Hoff, we have conducted an Interview.
By Sven Wagenknecht
9. September 2019BTC$10.336,19 -0.62%part Facebook Twitter LinkedIn xing mail
BTC-ECHO: How would you summarise the investment strategy for your crypto-hedge Fund together?
Philipp kaller Hoff: We use systematic procedures to manage cryptographic currencies. These methods come from the world of traditional hedge funds and we have not reinvented the wheel. Systematically means that we have some rules for trading and then implement it. These rules are being gradually tested and improved. In addition, our customers define, of course, what risks they want to take and what strategies you are interested in. We put this in the Form of Managed Accounts. That is, we can get access to the Account of our customer, to trade their Assets, but they can deduct any money.
BTC-ECHO: you offer various indices. For example, a Small Cap Index or Low Volume Index. What is it with the two indexes on?
Philipp kaller Hoff: learned Over the last 50 years, we have a lot of hedge funds and trading strategies. First of all, Acting is bad, because you pay fees only, except, however, the trading strategies produce a so-called Alpha. Alpha means that the trading strategy to the cost is better than the market, so something brings.
In this area are the Work of Fama and French is very important to have received a Nobel prize. These have shown that there are mechanisms in place in each market, which are first of all, regardless of the market, but also can be better. An important factor is the size of the company. Small companies in certain markets, a better Performance than large ones. To be able to track, we have built a Small-Cap Index on crypto-currencies. Another important factor is the volatility, i.e. the variation of the individual crypto-currencies. It was often shown that assets with a small fluctuation actually have a better Performance. Therefore, we also show a Low Vol Index.
BTC-ECHO: such a segmentation and differentiation as possible in the crypto-market? Simply put: do not Go, anyway, all crypto-currencies, closed down or closed up?
Philipp kaller Hoff: The differences in the Cryptocurrencies are partly very large, so they are moving, but sometimes very different. I think the distinction, for example, in Currency Tokens, such as Bitcoin, Platform Tokens, such as Ethereum, fire Tokens, as Binance and Utility Tokens, as Maker well. If you look at this division, the individual classes very differently. Often the market is driven, of course, as a Whole, and the differences are transferred. In the long term, I think, but, will enforce the differences and we will always find better models that describe the individual classes.
BTC-ECHO: How to use and work with data to investment strategies for crypto to derive currencies?
Philipp kaller Hoff: We begin by collecting all the data about every single crypto-currency. The Nice thing about crypto currencies is that you can get better information than for ordinary shares. The difference is that you can track the success and use of crypto-currencies, live – namely, one Block at a time. In the case of Internet stocks, you always get the exact User Figures-or how much money you with advertising have earned. In the case of crypto currencies, I see how many people that use the System, how much money you move, and how to use the crypto currencies to use. This data we bring into our systems and to analyze these with everything there is in Machine Learning and statistical methods.
BTC-ECHO: What is the difference between the Trading with crypto-currencies at the most compared to the Trading with traditional Assets?
Philipp kaller Hoff: I have traded in the last 15 years all Asset classes and trading systems for stocks, bonds, currencies, or commodities to be built. The difference is actually not particularly large, except that crypto-currencies are very volatile and the trading systems is not yet as well developed. The annualized volatility (fluctuation) is often over 100 percent per year, while this share is about 16 per cent, and bonds at 4 per cent. You will notice that it is very risky investments. The trading systems also make errors, so you have much more control. We let the constant so-called Reconciliation processes to track these errors. This is very time-consuming and slow, but has improved in the last year alone already very strong and I think in two years we will have similar conditions.
BTC-ECHO: what are the tools and financial structures sets her on the crypto-market on falling prices?
Philipp kaller Hoff: of course There are Futures, but only on Bitcoin. Much better CFD markets, with which we are in the Top 10 crypto-currencies, long and short can go. For a Short Position, a Margin has to be deposited by approximately 10 percent, so we can theoretically take a Leverage of 10x. But since the volatility is so high (see above), this is not a good idea. As soon as the Margin falls, for example below 5 percent, can be smoothly made. If the price moves exactly in the other direction, no longer participates, but also has just the loss.
However, CFD markets are interesting, I can hedge positions in addition to a interest to get. If I store for example 100 Bitcoin in a Bank, I have, of course, the market risk of 100 Bitcoins. When I sell but in addition have 100 Bitcoins by CFDs, I have no market risk more and earn an additional interest of about 5 percent per year. This interest rate is referred to as the Funding Rate. If man long is, you have to pay these, in Short, you get this, because it gives in terms of Future markets, “bitcoin”. For this you get a interest rate.
BTC-ECHO: What are the three most important price drivers are up to date in your opinion?
Philipp kaller Hoff: , The market is driven, in my view, a strong sentiment. The Second is the prices themselves. As the prices have risen again this year, many jumped back on the train, and have driven the prices even further up. The third are quite fundamental data, such as, for example, the Bitcoin Mining. The Mining at these prices again very profitable and thus many machines are turned on. But the electricity and the Hardware with Bitcoins numbers, which are then dumped on the market and the price to make it more efficient. All in All, the current influence of fundamentals on prices in crypto is pronounced-the market or the relevant Assets, however, is Far not so, as in traditional markets.
BTC-ECHO: What role in your investment strategy stablecoins?
Philipp kaller Hoff: We use stablecoins, but mainly normal currencies. We use stablecoins in the short term, to the crypto-currencies on the stock exchanges to act and to move between the exchanges of money. In addition, we use the Stable Coins for the so-called “Yield Strategies”. Stable Coins usually have very sophisticated mechanisms in order to remain stable. These mechanisms include, most of the time, that you get paid for it, if it contributes to the stability. Sometimes you can only earn 20 percent per year.
BTC-ECHO: Will prevail in the next few years, Decentralised Autonomous organisations, short DAOs, as a new Investment constructs?
Philipp kaller Hoff: I find DAOs to be very interesting, if you could implement this as a sort of Investment Club. This means that anyone can invest in this club, but then also decides how the money is created. In particular, it is about Learning and the exchange of Investment ideas. I think it is possible that we will see more DAOs, but the regulations are very expensive. We wanted to implement in the case of Protos, a DAO, then had to see, however, that at the Moment is just very difficult, and then decided to have a “normal” Fund token. The Fund is managed by us, even if we interact strongly with our Community on Facebook and inform them.
BTC-ECHO: What are the Trends in the Trading of crypto currencies you can make? What will change in the next 3 to 5 years at the most?
Philipp kaller Hoff: I believe, fundamental data, will become more weighted in the next few years and we will always have a better understanding of how to evaluate crypto-currencies. In addition, the Trading infrastructure will be better and it is cheaper to trade in these. This is good for companies like us, because we always have to get first of all these costs in, then to be better.
BTC-ECHO: let’s say you’re a amount of 10,000 Euro in crypto-currencies create. In which cryptographic Assets would you invest?
Philipp kaller Hoff: said, I’m not a stick – or crypto-Picker, but would always invest systematically. The first and easiest strategy is to buy from my point of view, always first to the market for capital weighting. In the case of crypto-currencies which is actually very easy, because Bitcoin and the other Top 10 crypto-currencies ever with almost 90 percent from the market mind. Of course, I think our Trend strategy is best, but you have to act on a regular basis. This strategy has the target that participates in the market, but the risk down dramatically. This of course has its price, because you invested in the market, but then again not sold, if it continues upwards. You have to manage, of course, and so I would always invest first in the capital-weighted market, as the changes only very slowly.
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