Tech
With an annual trading volume exceeding NT$9 trillion, the Taiwanese startup joins the ranks of the world’s top ten cryptocurrency market makers: We are the Wolf of Wall Street!
Taiwan is home to a mysterious company that is not only among the top ten cryptocurrency market makers in the world, but also ranks as the best liquidity provider for the top three trading pairs globally! In 2023, their annual trading volume reached an impressive US$300 billion (about NT$9 trillion) and is expected to surpass US$500 billion (about NT$16 trillion) this year!
This Taiwan-oriented company, Quantrend Technology, has earned a reputation for being the “Wolf of Wall Street” in the cryptocurrency world. In just two years since its inception, it has developed exceptional trading strategies through superior AI technology. The company’s co-founder, Popo Chen, is a well-known figure in the crypto community. He was one of the co-founders of Cobinhood, a Taiwanese cryptocurrency exchange that was once a very promising unicorn in the industry. Kaede Tai, Chief Technology Officer, is also a renowned tech genius, known for co-founding PTT, Taiwan’s popular online forum.
In a twist of fate, these two extraordinary figures in Taiwan’s crypto and tech communities have joined forces with the ambition to make a difference in the cryptocurrency world. Their goal is to turn the page on past incidents such as pump-and-dump schemes, ICO scams, and the FTX fund embezzlement scandal. Guided by a dash of romantic perseverance, they are leveraging AI technology and superior strategies to ascend to the global elite in quantitative trading, standing up to the industry giants.
If you are interested in the mysteries of the cryptocurrency industry and are eager to discover the invisible hand behind trading, tune in to this episode of “All About the Money” for an in-depth interview. Join us as we explore Quantrend Technology’s business model, future trends in cryptocurrencies, and how to uncover the most profitable opportunities in this FinTech revolution.
Creating a sustainable business model for cryptocurrencies
The most renowned cryptocurrency, Bitcoin, has been around for 14 years, but it remains a highly volatile and intense market, where there is a saying that “a day in the world of cryptocurrencies is like a year in the real world”. This volatility has scared off many long-term investors, instead attracting those looking to get rich quick.
But should the world of cryptocurrencies be based exclusively on this get-rich-quick model? Isn’t there a better way to make consistent, long-term profits in this market?
“Of course, a new trend offers opportunities for quick wealth, because hot money flows in. However, after witnessing the speculative frenzy of recent years and the decline of NFTs, I realized that cryptocurrency should develop in a more practical direction” , says Popo Chen. With this vision, he founded Quantrend Technology in 2020, with the goal of emulating Renaissance Technologies LLC’s hedge fund model. They use quantitative AI models derived from mathematical and statistical analysis for cryptocurrency trading strategies.
By investing and profiting through proprietary trading and offering institutional clients low-risk investment portfolio products, Quantrend Technology is able to balance self-investment with client services.
You may be wondering, given the high volatility of cryptocurrency, how does Quantrend Technology manage to mitigate risks? Similar to the concept of hedging in traditional financial markets, they employ a “market-neutral strategy” to offset risks. This involves holding long and short positions simultaneously to offset each other. Meanwhile, powerful predictive factors and AI models are used to forecast price differences between various assets, generating excess returns (Alpha) by capitalizing on these price differences.
In other words, the superiority of predictive models and the speed and accuracy of judgments determine the magnitude of excess returns (Alpha). This is the decisive advantage that Quantrend Technology proudly boasts.
Quantrend Technology CTO Kaede Tai also points out that the current barriers of financial products in the cryptocurrency world are too low. This has led to a gambler’s mentality, where many people use 100x leverage to buy perpetual contracts, essentially gambling for a winning or losing outcome. In contrast, only long-term holders tend to trade in the cryptocurrency spot market.
So, is it possible to find the perfect balance? Quantrend Technology has developed an innovative service that combines the benefits of high-frequency trading and long-term holding. Using clients’ Bitcoin holdings as a base, they “mirror” a trading limit and employ portfolio-based AI trading strategies to profit from price differences. After each trade, they immediately buy back Bitcoin, allowing spot holdings to grow not only in value, but also in volume.
The success of these products proves that even without relying on speculation, gambling or other fringe means, it is possible to build a sustainable business model in the world of cryptocurrencies.
An impenetrable technological moat even for the financial giants
The unstoppable trend of cryptocurrency is evident from the legalization of spot ETFs on Bitcoin and Ethereum. But the key question is: is the moat deep enough? As financial giants move to carve up market share, what advantages does Quantrend technology offer?
CTO Kaede Tai believes that traditional giants may not be able to dominate the cryptocurrency world easily. “There are many new concepts here, such as ‘perpetual contracts,’ which have never existed before. Furthermore, cryptocurrency exchanges are cloud-based, unlike traditional finance which requires the creation of physical data centers and dedicated lines. It’s a completely different ecosystem.” For these large institutions, finding people who understand trading, cryptocurrency and artificial intelligence at the same time is very challenging. This is precisely the background and strength of Quantrend Technology which can easily identify the profitability formula .
You can’t keep up with the trading bots – they work 24/7 while you sleep!
Cryptocurrency has endured ups and downs and experienced bull and bear cycles. It finally enters the mainstream market in recent years. From decentralized management to being recognized and regulated by numerous countries, cryptocurrency has also become a significant investment position for major traditional financial institutions such as Goldman Sachs and JP Morgan. This shift has strengthened the general public’s confidence in cryptocurrency investment.
“In the economy as a whole, total assets of traditional investors far exceed total assets in the cryptocurrency market. The key question is how the bottom will flow into this emerging market, allowing its value to consolidate over time (Note: a phenomenon where an asset or protocol becomes more valuable or useful over time). Considering these factors, I believe we are still in the early stages of a bull market and this trend should continue for the next two to three years.”
So how should retail investors participate in this highly profitable FinTech revolution?
Popo and Kaede unanimously suggest, “Don’t even try to compete with commercial robots!”
“AI is designed to learn and exploit human behavior, so our profits are essentially derived from human nature. To be honest, we are the wolf of Wall Street. Don’t go into the lion’s den trying to trade on your own.”
Popo advises that the simplest strategy for retail investors is dollar-cost averaging (DCA). This approach helps achieve an average price, protecting retail investors from short-term volatility. As prices approach the peak, investors can gradually sell their holdings, effectively profiting from the average price difference without emotional stress. “Or even a simpler strategy,” he adds, “if you can’t beat them, join them!”
Quantrend Technology has successfully entered the top ten cryptocurrency market makers in the world by leveraging AI technology. They have proven that the cryptocurrency community can employ a sustainable business model, improving financial efficiency in the cryptocurrency market through their advanced technology. This enables retail investors to buy and sell at the best prices, while allowing market makers to earn reasonable profits, gradually paving the way for a mature and stable market mechanism.