Analysis of digital currency market

Throughout the digital currency market, there has been no mature professional platform to help investors with quantitative trading. With such an opportunity, we will establish the Rcash platform. Rcash is a one-stop quantitative trading platform on the digital currency market. Investors may conduct quantitative trading fast and conveniently with the tools and strategies provided by Rcash, for lowering the threshold for using quantitative trading and also helping investors realize stable investment yields.

Rapid growth in the digital currency market

With the rapid development of blockchain technology, the digital currency market represented by coins like Bitcoin, Litecoin, and Ethereum has ushered in a phase of aggressive development. Digital currency trading volume already exceeds US $40,000,000,000 (about 280 billion yuan) every day. In the four months between August and December of 2017 alone, the total value of the digital currency market rose from 150 billion U.S. dollars to 700 billion U.S. dollars

Considering the primary market, the number of active ICO projects has experienced rapid growth since the beginning of 2017, and a further 10,000 ICO projects are expected to launch in 2018. From the secondary market point of view as of January 24, 2018, CoinMarketCap reports show that secondary currency digital currencies reached 1486 worldwide with a total of 8,014 digital currency transactions, a significant increase from the previous year.

The range of people involved in digital asset trading has long since moved on from the early crowd of crypto-geeks to encompass ordinary investors already further differentiated from professional investors and investment institutions likewise involved.

Faced with such a fiery market climate, in the fourth quarter of 2017, the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE) both launched bitcoin-based futures, confirming a place in traditional financial markets for Bitcoin and other digital currencies.

Investment trends in quantitative trading

Quantitative trading refers to the use of programs to execute trading orders and specific trading strategies. Compared with traditional fundamental analysis and technical analysis, quantitative investment depends mainly on data and models to identify investment targets and strategies. Differing from traditional investment methods, quantitative investment reduces the presence of subjective feeling the process of managing assets, while nevertheless using code to better present information for human judgement and enable smarter strategies when faced with the vast amount of information circulating in markets.

The investment strategies identified and executed through these programs will not tend to be disturbed by investor sentiment. The computer will instead use quantitative data analysis methods to quickly respond to changes and events in the market, avoiding negligence and biases arising from factors summarizable as human error.

The ability of the human mind to process such a vast amount of market information and make effective investment decisions is extremely limited. Unlike investment strategies relying on subjective judgement, quantitative investment offers the numerous advantages computer analysis to better enable investors to capture opportunities as they emerge.

The advantage of quantitative investment strategy is that it can clearly depict various investment concepts in different economic environments and different market environments. In the United States quantitative investment has already gone through more than thirty years of development history. According to Bloomberg data, as of November 4, 2008, the total assets managed by a total of 1184 quantitative funds reached 184.8 billion U.S. dollars with an average annual growth rate of 20%, compared with the 8% growth shown in the 18 billion U.S. dollars’ worth of assets managed by 21 non-quantitative funds in 1988.

Ten years from now, a foreseeable 60% of the stock market orders will be issued by such programs. More than 80% of large U.S. funds and one-third of large Asian funds will have used quantitative investment strategies. Quantitative transactions are slowly but surely becoming the future of investment trends in the financial sector.

Large market for risk free arbitrage

Arbitrage is one kind of risk-free transaction in the digital currency market. When the same transaction is traded in two or more markets, due to the difference between regions and other factors, there is a certain inherent price difference between the trading pairs. However, due to the market supply and demand, the market environment and trading rules will not be exactly the same, so there will be a price transmission delay or other distortion of the situation as a result. Therefore, the level of inherent spread will deviate. Intermarket arbitrage is also an opportunity to use the market imbalance to buy (or sell) a certain trade pair in a market and sell (or buy) the same trade pair in another market in order to earn a profit spread.

It is precisely in the digital money market that there are exchange rate differences between various types of digital currencies and different exchange rates between different exchanges. Whether the market is in a bull market or a bear state, as long as there are differences between different trading pairs and exchanges, investors have the opportunity to profit using quantitative trading strategies.

At this stage, the daily global digital currency trading volume has already reached 40 billion US dollars. If the arbitrage funds market turnover were hypothetically 0.5% of the total margin, then use of arbitrage strategy at this point would alone yield 200 million US dollars a day. With full-year profits reaching 730 million US dollars, these are impressive margins.

Arbitrage in the digital currency market presents a huge market in and of itself, because everyday investors have a strong impulse to trade. Individual investors rarely compare the current prices of multiple exchanges when making a deal, so there will not be great sensitivity to the spread between the various exchanges for each transaction. By calculating the different rates prevailing in different markets, the arbitrage platform mechanism can complete risk-free arbitrage investment behavior.

Investor predicaments

At this stage, the total number of people investing in digital currency has reached tens of millions. Of them, most are casual individual investors, and most participants do not have a well founded trading strategy when investing in digital currencies. In the face of price fluctuations in the secondary market, they are often unable to determine when to buy and sell, leading to losses. Quantitative transactions in the digital money market, on the other hand, address only the concerns of investors and provide them with solid returns

In real life, investors often find it hard to apply quantitative trading strategies to actual digital currency investments due to various constraints. We can summarize the challenges facing ordinary investors and quantitative trading investors as follows:


Ordinary investors:

There are 1,486 digital currency currencies that can be traded on the secondary market worldwide, with transactions numbering in the tens of thousands. At the same time, there are over 180 exchanges in the world, each matching transaction currencies differently by some measure from one another. For ordinary investors, it is difficult to simultaneously monitor the prices listed on various exchanges. Because of their limited ability to access information, data, and forecast models, this poses a significant obstacle to the effective use of quantitative trading strategies.

Quantitative investors:

For investors operating on the basis of some number of quantitative transactions, it is hard to easily implement such functions as building a quantitative trading model and completing a backtesting. Because of the different trading interfaces of the exchanges, it is very difficult for investors to develop a common interface at this stage based on their own capabilities to collect data from various platforms and subsequently complete strategic trading. It is difficult for investors to utilize existing resources to realize cross- market and cross-trade arbitrage.

The Rcash mission

Rcash is a global one-in-all digital currency trading platform. Rcash resolves the lacking access and infrastructure facing investors who could benefit from a quantitative trading strategy. The platform enables the the use of conversion channels, currency trading, difference evaluation across transaction pairs, and quantitative trading strategy to help investors realize profits previously inaccessible in digital currency trading.

Ordinary investors will be able to profit through the investment platform’s quantitative strategy fund. The platform provides a package of tools for quantitative investors to help them quantify transactions more quickly and easily. In exchange, investors will need to pay RCH tokens as service fees when using platform tools and interfaces.

A revolutionary platform for quantitative trading
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