CoinShares introduces an automated trading product for retail crypto investors, targeting a market niche underserved by robo-advisors.
The platform, called HAL, connects to users’ favorite exchanges and then automatically executes chosen trading strategies. Its trading robots are active at all times and take positions on a daily, hourly or weekly basis. CoinShares strategies trade in bitcoin, ethereum, BNB, matic, XRP, cardano, solana, bitcoin cash, and dogecoin. The service costs $19.90 per month and can be canceled at any time. The product is marketed in the European Union and the United Kingdom, although the digital asset investment company does not restrict users based on their nationality or residence, except for those who live in countries sanctioned by the Financial Action Task Force. It initially offers four quantitative styles:
- Wise, daily-only long trend followers that are designed to turn neutral when prices fall. These operate on a time horizon of days or weeks.
- Pulse, which are hourly long-short trending approaches that can take advantage of price rises and falls within a trading horizon of just one hour.
- Artificial Intelligence Pick, a multi-coin strategy that trades Bitcoin and Ether following hourly or daily signals, relying on neural networks to make decisions. The network is looking for the best approach over the next 24 hours.
- Dynamic, a low volatility absolute return product that blends multiple strategies.
Thematic index strategies are also planned.
A company spokesperson said Forbes that each user’s strategy would have its own behavior so that the product does not distort the market with many clients taking similar positions which could be exploited to their disadvantage. The company itself promises not to favor the strategies it offers. HAL is CoinShare’s first consumer-facing service, prior to which the company focused on offering crypto trading products to institutional and professional investors. An advantage is that the CoinShares platform is actively trading around the clock, which is useful in the around-the-clock crypto world. The product is not custodian but runs on behalf of a user through his exchange.
“Now we move on to people who are already inside the crypto ecosystem and already like to try and play with the ecosystems themselves, but need a little help navigating in a way better adjusted to risk in the volatility of this market,” explains Jean-Marie Mognetti, CEO of CoinShares.
“It’s for every consumer who has an exchange account with an exchange in Europe who wants to be able to have a little more risk-based approach to their trading environment,” Mognetti said.
Last year, CoinShares acquired French fintech Napoleon Group, a company offering a similar service to HAL. Napoleon was already integrated with major exchanges, including Binance, Bitfinex, Bitmex, FTX, and Bitstamp, and provides CoinShares with a pre-established customer base. Napoleon Asset Management also holds a license under the European Union Alternative Investment Fund Managers Directive. The license allows the UK-based company to distribute its products throughout Europe after Brexit.
CoinShares generated $14.4 million in revenue in the second quarter of the year, but posted a loss of $100,000 after a $17.7 million hit from the liquidation of the company’s Terra holdings after the collapse of the algorithmic stablecoin.
Robo-advisors have rapidly gained traction since their introduction a decade ago. Charles Schwab, a financial services company with its own robo-advisory product, predicts that $460 billion in assets will be managed by robo-advisors in 2022. However, traditional robo-advisors have slowly evolved to offer crypto products given asset volatility, leaving room for crypto-native companies like CoinShares to fill the void.
In February, U.S. automated investment platform Betterment entered crypto by acquiring Makara, a crypto investment adviser registered with the Securities and Exchange Commission. Announcing the purchase, Betterment said the addition of crypto services would “further differentiate” the company’s product suite. Other advisers, like Wealthfront and SoFi, offer bitcoin and ether exposure but do not have automated crypto products.
“We managed to successfully navigate several bear markets,” Mognetti said. “At the end of the day, people tend to trust people who support them for the long term, so CoinShare is one of those entities in the crypto ecosystem, that’s been around for a long, long time and we’ll continue to be there. for a very long time, a very long time.”
HAL stands for Heuristically Programmed Algorithmic Computer, which is what the company aims to deliver with its quantitative strategies. But CoinShares is aware it was also the name of an “ambivalent” computer character in the 1968 film. 2001: A Space Odyssey.
The film’s character was a “computer that controls all of the automated facets of this mission to a singularity of unknown origin on a moon of Jupiter, and HAL knows everything,” a spokesperson said, and alongside, “Our strategies are automated, control everything and monitor the market in real time. With HAL, you no longer have to worry about your trades.