Promise less than what you can deliver and deliver more than what you promise
SwissBorg investment in Cryptocurrencies — track record
Dear Community,
We’ve been asked several times what was our track record regarding our investment competencies. Instead of showing you back-tested models or past performances track records that could be subject to caution, we decided to share with you our insights and one of the current trades we have implemented a few days ago. Here is one arbitrage we have been doing, please find below the sequence of the trade.
A fork on Bitcoin is due on November 16th which will create the Bitcoin (BT1) + the Bitcoin segwit2x (BT2).
The future Bitcoin on Bitmex will only take in account BT1, this is why it trades at a discount for Dec 29 expiry (at $6834 as we speak) :
On Bitfinex you can buy bitcoin at $7336:
You can convert your Bitcoin into BT1 + BT2 in the Token Manager section of Bitfinex :
You can sell your BT2 at $1280 right away:
You end up being long BT1 for $7336-$1280 = $6056 while you are short the future on Bitmex for $6834. You can use some leverage on your short leg, say you use a 3x leverage to keep some cushion so you use around $2100 of capital here.
You can gain $778 on $8156 i.e. 9.5% gain minus some gamma as Bitmex deposit is Bitcoin only so, expected net return is 5.6% (269% annualized) the trade having been implemented October 24, i.e. $778 — $315 = $463/ $ 8156 as these two products will converge to be the exact same one after November 16th.
Please note this is currently the end of the trade, see the below graph, where you could implement that trade with a double digit returns — from 30% (!) to 5.6% — if implemented a few days ago.
Read the part 2 of this article : Promise less than what you can deliver and deliver more than what you promise and really do so!
Maxime Gillot, SwissBorg CIO
