CoinShares is launching an automated trading product for retail crypto investors, targeting a market niche not well served by robo advisors.
The platform, called HAL, connects to users’ favorite exchanges and then automatically executes their chosen trading strategies. Its trading bots are active at all times, taking positions on a daily, hourly or weekly basis. CoinShares strategies trade Bitcoin, Ethereum, BNB, Matic, XRP, Cardano, Solana, Bitcoin Cash and Dogecoin. The service costs $19.90 per month and you can cancel at any time. The product will be marketed in the European Union and the United Kingdom, although the digital asset investment company does not restrict users based on nationality or residency, except for those living in countries sanctioned by the Financial Action Task Force. It initially offers four quantitative styles:
- Smart daily long-only trend followers designed to remain neutral when prices are falling. These work with a time horizon of days or weeks.
- Pulses are hourly long-short trend-following approaches that can benefit from price rises and falls over a trading horizon as short as one hour.
- Artificial Intelligence Pick, a multi-coin strategy that trades Bitcoin and Ether on hourly or daily signals and relies on neural networks to make decisions. The network will be looking for the best approach over the next 24 hours.
- Dynamic, a low volatility absolute return product that mixes multiple strategies.
Thematic index strategies are also planned.
A spokesman for the company said forbes that each user’s strategy would have its own behavior so that the product would not distort the market by having many clients take similar positions that could be exploited to their detriment. The company itself promises not to push the strategies it offers. HAL is CoinShare’s first consumer-facing service, previously the company focused on providing crypto trading products to institutional and professional investors. One benefit is that CoinShares’ platform actively trades 24/7, which is useful in the 24-hour world of crypto. The product is not custodial but executed on behalf of a user through their exchange.
“Now we are reaching out to people who are already in the crypto ecosystem and are already keen to try playing with the ecosystems themselves, but need a little help to better manage the volatility of this market in a risk-adjusted manner. ‘ says Jean-Marie Mognetti, CEO of CoinShares.
“It’s for any consumer who has an exchange account with an exchange in Europe and wants to be able to have a little more risk-based approach to their trading environment,” Mognetti said.
Last year, CoinShares acquired French fintech Napoleon Group, a company that offers a service similar to HAL. Already integrated with leading exchanges such as Binance, Bitfinex, Bitmex, FTX and Bitstamp, Napoleon offers CoinShares a pre-determined customer base. Napoleon Asset Management is also licensed under the European Union Alternative Investment Fund Managers Directive. The license allows the UK-based company to distribute its products across Europe post-Brexit.
CoinShares posted $14.4 million in revenue for the second quarter of the year but posted a $100,000 loss after the company made $17.7 million by liquidating the company’s Terra holdings following the collapse the algorithmic stablecoin had suffered.
Robo-advisers have rapidly grown in prominence since their inception a decade ago. Charles Schwab, a financial services firm with its own robo-advising product, predicts that by 2022, robo-advisors will be managing $460 billion in assets. However, traditional automated advisors have slowly moved towards offering crypto products in the face of asset volatility, leaving space for crypto-native firms like CoinShares to fill the gap.
In February, US automated investment platform Betterment entered the crypto space by acquiring Securities and Exchange Commission-registered crypto investment advisor Makara. Announcing the purchase, Betterment said the addition of crypto services would “further differentiate” the company’s product suite. Other advisors, like Wealthfront and SoFi, offer Bitcoin and Ether but don’t have automated crypto products.
“We have successfully navigated through several bear markets,” Mognetti said. “Ultimately, people tend to trust people who stand by them for the long term, so CoinShare is one of those entities in the crypto ecosystem that’s been around for a very, very long time and we’re going to be around for a very, very long time.”
HAL stands for Heuristically Programmed Algorithmic Computer, which the company aims to deliver with its quantitative strategies. But CoinShares is aware that it was also the name of an “ambivalent” computer character in the 1968 film 2001: A Space Odyssey.
The film character is a “computer controlling every automated facet of this mission to a singularity of unknown origin on a moon of Jupiter, and HAL knows everything,” said a spokesman, and in parallel: “Our strategies are automated, control everything and watch the market.” Real time. With HAL, you no longer have to worry about your trades.”