This year, Ethereum has been one of the most talked-about cryptocurrencies. The year 2016 started with a series of wins for the ambitious project, yet shortly afterwards it faced a series of problems. However, notwithstanding the hardfork after The DAO’s collapse, and the subsequent emergence of Ethereum Classic, many experts still believe Ethereum is a project that holds plenty of promise, investing their assets in ETH.
One of the latest examples is Ethtrade investment fund which chose Ethereum as its main investment vehicle, which is clearly seen from the project’s name. The fund’s experts expect that ETH price may grow to $21 by mid-2017, and even surpass it later.
Tomas Novak, Ethtrade’s regional development manager, told ForkLog about the fund’s structure, what to expect from cryptocurrency markets within the next two years, and Ethereum’s perspectives.
ForkLog: Please, tell us about Ethtrade. How old is it? What has it achieved by now?
Tomas Novak: In mid-2015, when the hype around Ethereum was only gaining steam, we invested our personal assets in ETH, gathered a group of traders and started testing various options of interaction between managerial portfolio and traders. A part of the team was formed back in 2008 and 2009. Since then, we’ve been trading on exchange market.
In February 2016, it became clear that we were right in putting our stake on Ethereum, so we decided to launch a trading platform to increase the number of traders and attract external funding. We know there have been attempts to implement discretionary management in cryptocurrencies, yet we were the first to succeed, mostly due to the popularity of Ethereum and other cryptocurrencies, and expansion into Asian markets.
Our users started earning since this spring. Our main achievement, in my opinion, is that throughout the entire period of trading there have been no unprofitable (in USD terms) months. Over the entire 2016, the overall turnover for all our traders has nearly reached 10,000 BTC. Certainly, there were negative factors and bad deals, but generally we’re definitely on the bright side.
There are 53,200 users on our platform, as our website’s main page says. It’s open for everyone and is being continuously refreshed.
FL: Do you invest only in Ethereum, or there are other cryptocurrencies for your trades?
T.N.: Ethereum is the main tool of our trades, though we use other cryptocurrencies as well. In fact, it all depends on the market situation: if the market allows us to earn with other altcoins, we try to do that.
We’ve set up a 24/7 monitoring of news, updates, user comments and so on, also we use a trader notification system. Once sufficient trade volume is back in Ethereum, we switch to it. Margin trades on XMR proved fine; there was a pump pattern similar to that of ETH. We trade Waves, Straits and some altcoins at Bittrex. Certainly, we also trade BTC for USD, while some traders prefer BTC for CNY.
FL: What’s your strategy as to managing your investors’ money?
T.N.: There are various possible tactics, each trader may have their own, yet we ask them to adhere to the strategies accepted by our company. I can’t go into details as it’s our business. We may say, however, that every our strategy is certainly an aggregate of well-known financial tactics. We use both technical and fundamental analysis.
A while ago we’ve bought SC, QORA and RDD, a few bitcoins for each, at minimum prices. Eventually, it allowed us to form a redundant supply of funds. We also managed to make a fortune out of XMR. We also participate in ICO’s, though nowadays there are too many newbies in this space, so we can’t earn as much as before. For instance, we invested nearly 20 BTC in LISK at the date’s exchange rate.
FL: Is your portfolio segregated into medium-term, short-term and long-term, or all the funds are continuously traded at exchanges?
T.N.: The portfolio is as follows:
1) short-term on regular trades;
2) medium-term on margin trades;
3) and, certainly, we don’t store long-term portfolio at exchanges.
FL: How do you ensure safety of funds? It’s quite important in the context of frequent hacks of cryptoexchanges.
T.N.: We diversify them. If we have some funds at the exchange, we use them. All funds work. If the funds don’t work, we withdraw them to cold wallets. Our biggest BTC wallets have multisig. We plan distribution of funds in such a way as to prevent the company to go bankrupt in case there are problems with any major exchange; also, we try not to store more than 30 per cent of the trading deposit at the same exchange.
Most often, traders access exchanges via API’s with no option of withdrawal. Some traders attempted to cheat, and we say goodbye to those very fast. Notably, there is always some risk in any endeavor, especially in crytotrading. Still, we don’t drive it to the extremes.
FL: What about your team and its earlier experience? Who is the project’s founder and main investor?
FL: How do you estimate Ethereum’s perspectives for the next two years? How much, do you reckon, ETH will be worth by mid-2017?
T.N.: The network is continuously developing. As for the perspectives, we try not to watch the price. We analyze the teamwork and the status of existing Ethereum projects. We’ve seen that 2016 has become the year of Ethereum’s maturing: prolonged pumps, dumps, manipulations, hacks, hardforks, and numerous ICO’s.
In short-term, it won’t let the rate go up, yet it creates a powerful foundation for full-fledged development of Ethereum network after the launch of Metropolis and Serenity. Vitalik Buterin knew what he was doing when he wrote a 2020 roadmap, so we’re ready to wait and work under such conditions. Now the community watches bitcoin price rally, yet it will cease sooner or later, and then it will be the time for altcoin prices to grow.
We believe that by mid-2017 Ethereum would reach $21 or so, while by late 2017 it would easily surpass this value. It will basically depend on the quality of projects launched on this decentralized global computer. We believe that Ethereum may approach current bitcoin market cap, while the latter could reach $100 billion within next two years.