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Novogratz's Crypto Trading Desk Lost $136M in Nine Months

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Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#71

Post by dgacmu »

dragontamer wrote: post #39
misiti3780 wrote: post #16

Earlier quoted context omitted.

to back this up, read the expose in the economist this week about family offices and how they all divesting from hedgefunds because the fees are ridiculous and they are doing no better than the S&P, usually worse when you take into account the onerous fees those mgrs are charging.

To be fair, when you have $100 Million, the goal of the game is not "growth", but holding onto that money. $100 million isn't much different from $108 Million (8% gains over the year)... or even $500 Million. In both cases, its still more than enough money to live on for the rest of your life. The S&P 500 has dropped 50% in the past (ie: 2008), and it doesn't make sense to risk that much money on that. You can't use…

Vanguard's AUM grew by about 1 trillion last year. This hypothetical 100M is 1/3rd of a day of that - and one almost certainly doesn't move all of it in a single day. Nor is one likely to keep all of it in a single fund. Once you have a bog-standard stocks/bonds/cash/maybe RE split, 100M isn't moving the market. I think you're off by an order of magnitude.

Where you're right, of course, is that 100M justifies considerably greater attention to the money management. But the biggest focus is tax efficiency, not the micro details of the market.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#72

Post by bhaak »

polkapolka wrote: post #52
GreaterFool wrote: post #24

Earlier quoted context omitted.

I also hear arb is doing fine. I wonder how it works though. Most exchange APIs are terrible and it is simply not technically feasible to do anything using those APIs. Also prices at too many exchanges move in absolute lockstep. Must be private, privileged access to better (internal) APIs, profit sharing, rip the face of "retail" investor kind of deals. After all the "exchanges" are not really exchanges as we know th…

You bypass the API completely and fill orders "manually".

What do you mean by "manually"?

The general web page of an exchange is horrible slow compared to their APIs and often breaks during high volume periods.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#73

Post by mikkom »

paulie_a wrote: post #33
AznHisoka wrote: post #9

Earlier quoted context omitted.

One of the best kept secrets in the hedge fund/financial industry is that most people really dont have a clue what they are doing. Sure they make bold predictions, appear on CNBC and use industry jargon. But at the end of the day, they arent much better than you or me at managing large amounts of money.

It's always sad when I get my upwards of 10 percent by professionals. I personally get 500-1000 percent return year over year. I'm working with small amounts of money that if I lost entirely wouldn't be the end of the world. But some years they barely beat inflation.

> I personally get 500-1000 percent return year over year.

Numbers like this are always quite funny to me. What does year over year mean in this context? 5 years? 10?

If you would start with $1000 then in 10 years you would be at approx. 976 million with only lower part of your profits (500%).

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#74

Post by dgacmu »

module0000 wrote: post #60
robk wrote: post #46

Earlier quoted context omitted.

How??

He'e eluding(likely) to the commodities market. You can make double your money on a mediocre trade. You can also lose 100% of your money on a similar mediocre trade.

Alluding. :)

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#75

Post by JumpCrisscross »

dragontamer wrote: post #69
quickthrower2 wrote: post #62

Earlier quoted context omitted.

Real estate is as old as humanity

No. Its only as old as modern society. The idea of a private citizen owning land was not generally accepted in the medieval age of kings. Only lords and other nobility could own land back then. Technically, the king owned the land, and the Lords were simply stewards of the King... probably indirectly (King -> Count -> Lords) Eventually, real estate could be owned by the common peasants and merchants, but that starts…

> Technically, the king owned the land, and the Lords were simply stewards of the King

This varies from culture to culture. Romans owned their land. Egyptians did not.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#76

Post by jazzyjackson »

apo wrote: post #44
village-idiot wrote: post #37

Earlier quoted context omitted.

For something that’s supposed to compete with Visa, $1m isn’t exactly “happening”. Edit: supposedly there is $62 billion worth of BTC sloshing around out there. If you take that number at face value, then close to .0016% of BTC has been committed to the lightning network. This is not “happening” by any stretch of the imagination.

You're right in that VISA volume will dwarf Lightning Network volume for a long time. However, you made the provably false statement that Lightning "wasn't happening." That train has left the station, leaving a surprisingly large crowd on the platform yelling at passersby that it will never happen.

"never going to happen" is a sort of valley slang, probably best exemplified in the film "mean girls" wherein one girl is trying to introduce 'that's so fetch' to the local lexicon, and her friend says "Stop trying to make fetch happen. It's not going to happen"

"Lightning" is not simply code that does indeed run at this minute - it is also the idea that Bitcoin will transcend into a pragmatic currency with the widespread usage of this 2nd-layer interface that can handle more than 7 transactions per second. That's the part that's not happening.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#77

Post by polkapolka »

bhaak wrote: post #72
polkapolka wrote: post #52

Earlier quoted context omitted.

You bypass the API completely and fill orders "manually".

What do you mean by "manually"? The general web page of an exchange is horrible slow compared to their APIs and often breaks during high volume periods.

Did you run into latency problems doing arbitrage this way? Or do you rely on API's?

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#78

Post by mortenjorck »

bhaak wrote: post #25
lordnacho wrote: post #12

The article is missing some critical details. What does the fund do? The article suggests they do arbitrage. Those opportunities actually tend to increase when things are volatile. Also while you can lose money doing it you wouldn't expect a precipitous collapse in NAV. If you discover you're slower than everyone else you can shut down. Volumes aren't necessarily correlated to price either, so that isn't entirely con…

This interview[1] sounds like they called bottom at 6k and then the floor fell out: "We thought it was a bear market. I went into it thinking in the long run crypto is going to be a real structural shift in the world and I can just hedge my portfolio. And to be fair, we did a really great job not losing money the first 60 percent down. What you forget is that a market like Bitcoin that’s down 84 percent has dropped 6…

I was pretty sure $6-7k was the floor for BTC, and it’s interesting to see a high-profile fund manager made effectively the same, expensive mistake. The biggest surprise for me, though, was ETH, which given its better fundamentals, I had thought would be where the market went after Bitcoin popped – and yet, it was not only dragged down, but crushed even harder than BTC.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#80

Post by Animats »

lordnacho wrote: post #12

The article is missing some critical details. What does the fund do? The article suggests they do arbitrage. Those opportunities actually tend to increase when things are volatile. Also while you can lose money doing it you wouldn't expect a precipitous collapse in NAV. If you discover you're slower than everyone else you can shut down. Volumes aren't necessarily correlated to price either, so that isn't entirely con…

The article suggests they do arbitrage.

They blamed their failure on "increased competition for arbitrage opportunities." Properly, arbitrage is low risk exploitation of differences between two markets in the same thing. Cryptocurrencies used to look like they had arbitrage opportunities, with differing prices between exchanges. Mostly, that was because it was so hard to pry cash out of the underfinanced cryptocurrency exchanges. They always had some excuse for delaying paying out. Arbitrage requires the ability to move cash quickly from one exchange to another.

As that situation improved, the spreads between exchanges narrowed. Opportunities for low-risk arbitrage disappeared. These traders reacted to this by going into higher-risk forms of trading. Which is about typical for traders. It didn't end well.

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