Belgo-Estonian fintech, Osom Finance has unveiled its new quant trending technology for crypto, developed by tech and finance veterans from Credit Suisse and KBC, specially designed for financial institutions and traders looking for a simple way to gain exposure to a very diversified set of crypto assets.As the central banks turn to quantitative easing to mitigate economic turmoil, an inflationary environment looms, and traditional fiat currencies face the threat of debasement. Cryptocurrencies, with their deflationary nature, fixed supply and resistance to unconventional monetary policy, act as a prime hedge against such macro risks, offering speculators a veritable opt-out clause.
Osom’s Autopilot is an algorithmic trading bot that leverages bitcoin and altcoins to fully capitalise on this potential. Originally designed for traditional markets, the quant trader has been adapted for crypto and aims to remove the trouble of portfolio construction as well as the need to devise, execute and maintain a trading strategy.
Trading via Autopilot, instead of direct participation in the market will become an attractive option for many: as they no longer need to worry about custody, best execution, or liquidity crunches. These elements can be especially important for traditional traders, who are not deeply involved in the underlying technology and can look to Autopilot as a low-risk way to diversify their asset base rather than just following an “index” where Bitcoin can easily represent over 70 per cent of the assets and take longer to recognise substantial gains in smaller altcoins.
Autopilot employs artificial intelligence and machine learning in conjunction with strategies devised by economists, social scientists, former crypto veterans, and traders to automatically build and trade a well-diversified index which comprises more than 30 pre-vetted altcoins.
With publicly-traded companies such as MicroStrategy and Square recently shifting a significant part of their treasury and assets to Bitcoin, institutions and businesses are starting to recognise that Bitcoin’s functionality enables it to be an immensely powerful hedge against inflation.
“Humans are overly prone to the fear of missing out and other such cognitive biases,” says OSOM co-founder Anton Altement. “These emotions often trigger undesired reactions, especially in traders, that makes it near impossible to maintain an actionable strategy. That’s what Autopilot is designed for, to allow traders exposure to an extremely profitable asset class while controlling the downside and sticking to the strategy despite the emotions.”
Putting its well-diversified portfolio into action, Autopilot elects the optimum entry, exit, and reentry opportunities to attain maximum profit. The system has been delivering annual returns of over 50 per cent —a significant difference when compared to the results from Credit Suisse Global Investment Returns Yearbook 2020, where global stocks have delivered a real return (after inflation) of 7.6 per cent over the last decade, and 3.6 per cent for bonds.
It’s the promise of higher yields that has led to a rising interest in robo-based analysts and advisors in recent times. In fact, despite the coronavirus pandemic throttling global economies, the market for robo advisors has only grown further, with usage increasing between 50 per cent and 300 per cent in the first quarter of 2020 from the quarter prior. JPMorgan recently revealed their plans to roll out its own robo-adviser next year.
On average, the Autopilot system strives to limit drawdowns to a maximum of 20 per cent – 30 per cent while delivering a current annual return of approximately 50 per cent to date. In addition, Osom is backed by a robust regulatory foundation—being one of only 30 per cent of companies to be re-licensed by the Estonian Financial Intelligence Unit (FIU).
