Jean-Marie Mognetti, CoinShares CEO
CoinShares is introducing an automated trading product for retail crypto investors, aiming for a market niche not well served by robo advisors.
The platform, called HAL, connects to users’ preferred exchanges then automatically executes their chosen trading strategies. Its trading bots 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 a month and can be canceled at any time. The product is being marketed in the European Union and U.K., although the digital-asset investment company doesn’t restrict users based on nationality or residence, with the exception of those living in countries sanctioned by the Financial Action Task Force. It initially offers four quantitative styles:
Thematic index strategies also are planned.
A spokesman for the company told Forbes that each user’s strategy would have its own behavior so that the product wouldn’t distort the market with many customers taking similar positions that could be exploited to their disadvantage. The company itself promises not to front-run the strategies it offers. HAL is CoinShare’s first consumer-facing service, before this the company focused on offering crypto trading products to institutional and professional investors. An advantage is that CoinShares’ platform is actively trading around the clock, which is useful in the 24-hour world of crypto. The product is non-custodial but executes on a user’s behalf through their exchange.
“Now we’re going up to people who are already inside the crypto ecosystem and like to already trying to play with the ecosystems themselves, but who need a bit of help to navigate in a better risk-adjusted way the volatility of this market,” says Jean-Marie Mognetti, CEO of CoinShares said.
“It’s for every consumer who has an exchange account with an exchange in Europe who wants to be able to have a bit 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 leading 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 Europe Union’s Alternative Investment Fund Managers directive. The license enables the U.K.-based company to distribute its products across Europe post-Brexit.
CoinShares generated $14.4 million in revenue in the second quarter of the year, but recorded a loss of $100,000 after a $17.7 million hit from liquidating the company’s Terra holdings after the algorithmic stablecoin collapsed.
Robo-advisors have quickly gained traction since they were introduced a decade ago. Charles Schwab, a financial services company with its own robo advising product, predicts that $460 billion worth of assets will be managed by robo advisors in 2022. However, traditional automated advisors have moved slowly to offer crypto products given the volatility of the assets, leaving room for crypto-native firms like CoinShares to fill the gap.
In February, the U.S. automated investing platform Betterment made its move into crypto by acquiring Securities and Exchange Commission-registered crypto investment advisor Makara. In announcing the purchase, Betterment said the addition of crypto services would “further differentiate” the company’s product suite. Other advisors, like Wealthfront and SoFi, offer exposure to bitcoin and ether but do not have automated crypto products.
“We have been able to navigate several bear markets with success,” Mognetti said. “Ultimately people tend to trust people who stand by them in the long run, so CoinShare is one of these entities in the crypto ecosystem, which has been there for a very, very long time and we’ll continue to be there for a very, very long time.”
HAL stands for Heuristically programmed ALgorithmic computer, which is what the company aims to provide with its quantitative strategies. But CoinShares is cognizant that it was also the name of “an ambivalent” computer character in the 1968 movie 2001: A Space Odyssey.
The movie character was a “computer that controls every automated facet of this mission to a singularity of unknown origin on a moon of Jupiter, and HAL knows everything,” a spokesman said, and in parallel, “Our strategies are automated, control everything and monitor the market in real time. With HAL you don’t need to worry about your trades anymore.”
