We are happy to announce that as of today, a new Crypto Strategy – OC Prime, has been made public on the ICONOMI Platform. We talked to Mr. Hugo Pinto, Head of Quantitative Research at Obvious Capital about the story behind the name of the company, the investment strategy, how he sees the development of the industry as a whole, and more.
Hugo Pinto, one of the Experts behind the OC Prime Crypto Strategy
Hugo Pinto is one of the co-founders of Obvious Capital and currently is Head of Quantitative Research. Previously a trader, quant, and portfolio manager, he has over 15 years of experience in conventional financial markets. His background includes experience as a Data Scientist in one of the worldwide leading companies in luxury retail, as well as several collaborations as a statistician consultant and researcher. A Crypto-enthusiast, he’s passionate about Mathematics and Natural Sciences, with an emphasis obviously, in Quantitative Finance and Statistical Modelling.
What’s the story behind the name of your company, Obvious Capital?
Financial markets, especially those with active classes, may seem relatively easy to understand at first sight by a common investor. However, it’s tricky to look into one asset’s history and conclude that future behaviors can be easily inferred, or even to understand how good risk management should be made according to a specific investor’s profile. Therefore, portfolio management, in such a young market as crypto, should be obvious – but it is effectively complex. The name came about as a consequence of such a contradiction.
What is the investment strategy, and how would you describe it for beginners?
Obvious Capital employs, in this particular Crypto Strategy, a proprietary and fully-automated systematic strategy. Behind the curtains, our algorithms monitor the price action, the volume, and a selected number of indicators for the majority of the crypto markets on a 24/7 basis. Then, with particular emphasis on momentum and volatility conditions, they project the ideal timing for accumulation and distribution of a selected set of recommended assets. Binding this all together, there is an outermost layer that manages the risk counterpart, setting definite and strict rules that try to preserve the capital, especially in abnormal market conditions.
Does your strategy already have some track record, or have you performed any backtesting?
Our strategy was backtested thoroughly on several years of data, and on the majority of all existent trading pairs. The premise was to validate its robustness and sensitivity to different market regimes, of varied duration. Once it was approved, it followed a paper-trading period, and finally a live deployment stage in the last quarter of 2018. What follows next is the track record – with all the fees applicable and realistic price execution – of one of our live performing funds:
OC Prime has been one of the top performers on the ICONOMI platform in the last seven days. How do you anticipate the conditions that lead the market to minimums since July?
In recent weeks, bitcoin markets have developed a well-shaped descending triangle that usually tends to resolve itself to the downside. As volatility was narrowing, the algorithm had to make an inherent choice: either bet on the upside break and build up a small position, setting stop losses if we reversed, or bet that the pattern would follow its statistical resolution and de-risk most of the capital into fiat. If this last bet was counteracted, then it would wait for the momentum confirmation to enter the bull run, with a little lag, but maintaining a good reward-ratio through this optimal policy. Those are the key ingredients in our algorithms: patterns, volatility, and momentum, all weighted accordingly to the specific market state conditions.
As a well-established company in crypto space, how do you see the development of the industry as a whole?
Blockchain is truly a disruptive technology that, in our opinion, will revolutionize the industry and, in particular, the financial sector. We also believe that this revolution is only at its initial stage because we still lack a whole set of tools, financial regulations, commercial offerings, and advanced trading frameworks. Nevertheless, despite the holistic vision of a still immature ecosystem, we see clear signs of global adoption and, more recently, of large interest from major institutions, reference companies, or even countries. This will eventually translate itself, in the future, into a strong growth period around the digital assets economy, into the stabilization of the crypto markets, and finally into their strong valuation with time.
Why did you decide to create a Crypto Strategy at ICONOMI?
When we started Obvious Capital, we developed not only a commercial offering suitable to HNWIs and UHNWIs, but also some services that would help recent ICO’s, STO’s, or IEO’s to survive in the long-term.
"What was lacking here, as a global provider, was a broader retail offering that would allow us for scalability in the custodianship while decreasing the minimum range of investment required. Clearly, the ICONOMI platform satisfied us in those quintessential aspects, and we eventually advanced in the implementation of such a Crypto Strategy – the OC Prime", explains Pinto.
Is there anything special that you would like to share with your future investors?
Obvious Capital’s team is comprised of individuals with vast trading experience, especially in the conventional markets. We have quants, data scientists, software developers, and experienced traders who try to develop, on a continuous and exploratory basis, new trading strategies while exploiting the market inefficiencies at their maximum extent. In such a pipeline, existent strategies keep getting upgraded and optimized, while new ones also keep being delivered consistently over time. All with the premise that we can extract the most value from the markets to our customers, while keeping their degree of satisfaction aligned with their expectations.