Introduction

The BitQuant Initiative is a passion project that I've had on the back burner for years.

I've always wanted to build a set of software-defined investment strategies that take advantage of market inefficiencies. But in the aftermath of the GFC, market volatility fell off a cliff and I figured that individuals had little chance of outperforming a simple passive investment strategy. 2010-2019 was the golden age of HFT for hedge funds and pasive investing for individuals.

Satoshi Nakamoto changed things in 2009 with the development of Bitcoin.

Although I made my first purchase in 2013, I didn't take Bitcoin very seriously until 2022. Between 2013-2022 my contrarian intuition told me: "It seems so crazy that this thing has gone up 10x, so why not 100x?" That intuition turned out to be largely correct.

In 2024 I had a number of new insights:

  • Bitcoin price behaves in a predictable and quantifiable manner if you can see through the volatility.
  • Bitcoin price is following an adoption curve not unlike other major global technology revolutions: the microprocessor, the internet and mobile.
  • Most people are unable to see through their own emotions or the asset volatility. Even if they can see things clearly and aren't blinded by feeling that "It's a scam!", they are unable to act accordingly.
  • Professional traders and hedge funds have struggeled with the asset because it's so difficult to square with their P&L objectives.
  • If these insights can be turned into a quantifiable strategy, a lot of money can be made.

This opportunity won't last forever. BitQuant Initiative's time is now.

Objectives

  • Develop a medium- to long-term quantitative investment strategy for Bitcoin
  • Develop a risk-management strategy for bitcoin-related products
  • In non-crypto markets, find opportunities buying and selling volatility (i.e. options)
  • Make money and have fun!

Non-Objectives

  • High-Frequency Trading - Can't even begin to compete.
  • Day Trading - A losing proposition.
  • Competing with Hedge Fund Strategies - They have infinitely more capital and IQ than I do.
  • Engaging in the false belief that I or anyone can see the future

Areas of Ambivalence

  • I'm not ideologically opposed to non-bitcoin crypto, but I find it exceedingly difficult to understand or model.

Disclaimer Not Financial Advice.