British Hedge Fund Hires Crypto Quant – Trustnodes

Winton, a British investment management hedge fund with $8 billion in assets under management, is expanding its operations to crypto.

The hedge fund has added a Crypto Quant Researcher to their London offices, making them one of the first European entity to have a position with such title.

According to a now closed job posting, the company was looking for someone to join their Investment Management & Research group to “support the development of our crypto systematic trading strategies.”

Crypto specific quant experience was not required, in part presumably because such a field is hardly about two years old, but they did want general quant experience in systemic trading within an established company.

They also wanted Python coding experience because Winton is big on big data, processing as much as “the equivalent of 30m King James bibles’ worth of information every day,” according to an FT article from 2013.

Their data hungry machines will have a field day with the many public blockchains that reveal at any moment what exactly is happening in the entire circa $1 trillion crypto market.

There’s the big data: what bitcoin is moving, where and why; and then there’s the sub data: who is doing what on Uniswap, is some NFT just getting hot, did some dapp get hacked and does that mean its price will crash. Then there’s the ‘social’ data: what’s Trustnodes saying?

So far, a company like Winton has probably mostly relied on the latter, though using specialized ‘social’ data as well, like reports from research companies.

Actual raw data in traditional finance is hard to get however, and immediate or instant raw data can often be pretty much impossible to get.

Yet they waited this long to get involved, and that may be simply because it has taken this long for awareness to reach a certain level, and for crypto market liquidity to reach a certain point.

The Dawn of the Second Phase: Institutional Investors

Some hedge fund hiring some trader, with 133 people applying, is just another day in finance, but in this specific case, it’s a new development in a developing new trend.

Institutional investors. They’re not here as a ‘class’ yet, but they began arriving in 2020, with the United States leading.

By the end of 2020, it seemed like every day some new hedge fund was buying bitcoin, but it took some time for a British one to show up, Ruffer Investment, and they didn’t stay long as the investment management firm sold their $500 million bitcoin a couple of months later.

The British at least showed up, however. Neither the German nor the French did, let alone Italian, etc., but the bitcoin market began moving to the stock market opening time in New York, Shanghai, and in Europe.

Shanghai was taken out by China’s Communist Party (CCP) which kicked out miners in May last year, and in the process seemingly succeeded in removing crypto from Shanghai’s trading houses.

At least that’s what we have to say nowadays because the picture is far more nuanced with Asia remaining part of the global crypto market.

But while bitcoin ticked with the morning coffee in New York, Shanghai and London, it still does so but to a lesser extent for both Shanghai and Europe.

For the former, dum politics. For the latter, our theory is that US trading houses took bitcoin and they run with it, while the European ones maybe did sort of take it, but certainly didn’t run.

New York, California, and bedrooms up and down the country in US with them Pythons in pajamas, we speculate have created systems that have bitcoin and ethereum as an integral part of their overall assets trading.

If they were asked to remove crypto from it, presumably it wouldn’t be much different than asking someone to go back to Nokia after trying the iPhone.

The crypto related financial sophistication in US, therefore, will only increase, but currently it isn’t sophisticated and at times it does come across as actually dumb.

Inefficient, and that’s presumably due to entities like Winton having to hire a general quant, trained in ‘paper’ based assets, like stocks, instead of the very first code based assets like crypto.

The difference may be primarily of the form, but there is also a difference in substance. The latter however is either ignored or not intimately understood yet simply because cryptos don’t have much history.

So we have trading houses at times treat bitcoin in a way that can only be explained by a lack of appreciation for its differences.

That’s opportunity, caused by the insufficient involvement of trading houses in crypto, and so we get the Winton entry.

That they’re British also suggests that Europe, two years behind we’ve ‘always’ estimated, is… well, just about in time.

This small news therefore may be a big indicator in trend as it might suggest that crypto will start paying more attention to European mornings too.

That includes also the euro, potentially, and further indicates that the dawn of the institutional investors phase might be moving more to the beginning of that phase as Europe also joins.