Investing in cryptocurrency through traditional methods can feel like navigating a relentless storm. For many newcomers, crypto trading is both unpredictable and challenging to grasp due to its complexity. However, it remains a space filled with opportunities.
The persistent volatility we’ve all become accustomed to isn’t something that attracts many retail investors—especially if they are unfamiliar with the space. Yieldfund is on a mission to change that and help investors access consistent weekly returns without having to worry about crypto’s volatility.
Today we dive into the topic of crypto volatility and Yieldfund’s vision with its CEO, Rick Simons, a visionary in automated quantitative trading with a deep understanding of crypto and traditional finance. He’s here to provide insights into how Yieldfund helps traders navigate turbulent markets and how innovation and strategy can turn volatility from a hurdle into a powerful tool for growth.
What inspired you to build an automated quantitative trading company for retail crypto investors?
Retail investors typically miss out on high-return opportunities because the strategies that need to be used are typically reserved for institutional investors or high-net-worth individuals. At Yieldfund, we aim to bridge this gap and bring automated quantitative trading capabilities to everyone in a mission to level the playing field for retail investors.
How does Yieldfund detect and adapt to sudden price shifts in the crypto market?
Sudden price movements are difficult to predict. Our quantitative trading systems are built and designed to run both short and long positions. This approach ensures that Yieldfund investors are strategically positioned for optimal outcomes, with carefully defined market exposures based on the number of trades and trade volumes. Our trading algorithms can also be adjusted to manage exposure based on how markets are developing.
What is it about crypto investing and its volatility that makes a lot of new investors look away and not take the “risk”?
The crypto market is still significantly smaller in terms of volume compared to the stock and forex markets. As a young market, crypto has fewer regulations in place to safeguard new investors. As a result, it is more susceptible to market manipulation and news-driven movements, making it much more volatile than established markets. This volatility makes it difficult and unpredictable for many investors, which keeps them from participating. Additionally, and this is something we discovered in our research, many investors still lack a clear understanding or consistent grasp of the unique nature of cryptocurrency.
How important is it for retail investors to have a product that doesn’t affect their investment during periods of high volatility?
We believe this is very important for retail traders as volatility is something that affects many, with over 90% of retail traders losing money when they initially start trading or investing. One of the reasons why investors choose to invest with Yieldfund is that volatility won’t affect traders’ outcomes. They invest with us to earn a fixed term at a fixed interest rate. This means that retail investors won’t have to endure sharp volatility spikes, nor will they be exposed to market volatility.
Can you describe a recent market shock and how the Yieldfund quantitative trading company managed to capitalize on it?
In February of this year, the most significant crypto hack to date occurred at Bybit. The impact on the broader crypto market was substantial, with nearly all crypto assets affected — Bitcoin dropped by up to 10%, and altcoins fell by as much as 40% within a matter of hours. The hack triggered a sharp and sudden price decline across the market. Due to this unexpected drop, our system immediately switched to short trading and was able to capitalize on the sudden price movements generating a 22.38% profit in the month.
What role do volatility regimes play in determining your rebalancing frequency and asset weightings?
Short-term volatility movements do not play a role in this. When a market “hovers” or moves sideways for an extended period, these are the most challenging situations for us and often require regular adjustments to the algorithm.
Looking ahead, how will you evolve your models or platform features to stay ahead of emerging market trends and manage volatility effectively?
We are continuously working on improving our algorithm to stay ahead of market developments and increase performance consistency. Looking ahead, we see artificial intelligence playing a key role in further enhancing the predictive capabilities of our system. By integrating AI-based analyses, we aim to better anticipate market movements and respond more effectively to volatility. This ongoing development ensures that our platform remains adaptive, resilient, and aligned with emerging trends in the financial markets.
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