[AUTOTRADE]BTC hedge fund by BtcAutoTrader(The first automated BTC hedge fund)

[lynn_402]

The price on cryptostocks for the autotrade stock is redicules at the moment, some people is clearly manipulating the price to try to take advantage of people panicselling shares. A loss of around 4 btc per week on the expences side when the stock still pays out 16-17 btc each week does not motivate the price to drop down to 30% when the company actually makes 12-13 btc profit for the shareholders each week with all expenses paid, there should still be 760 out of the 800 btc raised capital in the company so if people would like to trade the stock at around 95% of the price, 0.0000950, that would be more resonable than trading it at 0.0000320 or some silly low price.

We don't know if there still is 760 of the 800 raised BTC; it is not exact that all expenses are paid, and the company could have been running at a loss since a long while now. I would not sell at these ridiculous prices, but I understand those who do since there is much uncertainty in this situation; a complete financial report would be greatly appreciated. And actually, after Neobee and all the other failures, panic selling at a considerable percentage of IPO price is quite understandable...

[thy]

A complete financial report would be good it they published and they should also publish the info they send out in mails to some that made there email visible at cryptostocks so all can read it.

[lynn_402]

A complete financial report would be good it they published and they should also publish the info they send out in mails to some that made there email visible at cryptostocks so all can read it.

I was hesitant to make it publicly available, but it is unfair for potential share-buyers to not be aware of this.
Here's the info they sent by e-mail.
http://pastebin.com/X3MR1kWA

[novaboy2k]

Seems like the main problem is that the current low price per btc, currently at around 480 usd/btc 3120 RMB/BTC, in the future when the price per btc is back at or above the 1000 usd/btc 6000 RMB/BTC level there will not be any problem, why not just temporary charge a higher(in percent/btc) management fee until the btcprice is back at a level where 20% fee would be enouth.
If you now charge something like 35-45% depending on what the current btc price is each week when the price is around 480/520 btc the problem would be solved and you would be able to take out the nessesary funds 100 000 RMB mentioned to pay your expenses and the dividend would still be at around 0.00001300 btc per share each week and when btcprice starts to climb again you can gradually charge less and less % until your back at the 20% level again, problem solved....

Exactly.

I would happily take the hit to get 0.00001300 per share.

[msc_de]

some days ago i read an interview text from Autotrade in chinese boards here, it was said that some of autotrade team member had about 60000 autotrade shares personally. if they play '' bump-pump'' game and run buy-back, it would be really a nightmare.

hopefully i thought in wrong direction. but current price really made me lose money as an investor.  

[davos]

Seems like the main problem is that the current low price per btc, currently at around 480 usd/btc 3120 RMB/BTC, in the future when the price per btc is back at or above the 1000 usd/btc 6000 RMB/BTC level there will not be any problem, why not just temporary charge a higher(in percent/btc) management fee until the btcprice is back at a level where 20% fee would be enouth.
If you now charge something like 35-45% depending on what the current btc price is each week when the price is around 480/520 btc the problem would be solved and you would be able to take out the nessesary funds 100 000 RMB mentioned to pay your expenses and the dividend would still be at around 0.00001300 btc per share each week and when btcprice starts to climb again you can gradually charge less and less % until your back at the 20% level again, problem solved....

Exactly.

It seems to me that the main problem is that they are following a fixed dividend system regardless of their costs, profits, or losses.

If they had, for example, not made a single trade - even if their cost overrun estimates are correct they would still have about 500-700 BTC of capital from investors left.

I don't say that this is what they are doing - I just mean that there is no information contained in their payment of dividends (which has scaled linearly with the amount of invested capital) to suggest their ROIC or any other business metric.


Let me put it another way. The contract has two, contradictory explanations of how dividends will be paid out. It says:

【Dividend policy】   
   20% of profit will be the account management fees, all the remaining 80% is used to share out bonus, each fund will be share one over one million of 80% of profits.
   Shared out bonus at 15:00 (GMT+8) in every Monday, if the day is China legal holiday will postpone to the next working day.

and

【Income estimation】
   【LTC hedging】
      We will hedge 2000 LTC everyday, assuming a net profit of each hedge is 0.0005 BTC, the net margin is 1BTC
   【XPM hedging】
      We will hedge 5000XPM everyday, assuming a net profit of each hedge is 0.0004 BTC, the net margin is 2BTC.
      Each dividend of each week is (1+2)*7*0.8/1000000=0.0000168BTC.
      Each dividend of each year is (1+2)*365*0.8/1000000=0.000876BTC。
      Annual return is 0.000876/0.0006=146%(lowest price to buy)
      Annual return is 0.000876/0.001=87.6%(highest price to buy)
   We will hedge more Crypto-Currency type according to the market condition in the future, and the AutoTrader will be optimal to raise efficiency.

It is obvious - to me at least - but hopefully to anyone observing the dividend payments which of these two obligations is being observed. And it would be, I dare to suggest, neigh-impossible for both of these statements to be so consistently true at the same time.

What really boggles my mind is that if they were going to follow a set plan for the distribution of funds - regardless of their actual trading income - they would set it at a level that would not cover even half of their claimed operating costs (which one assumes they had to know before they started).

So again, I would return to the call for a balance sheet and perhaps the real numbers related to trading.

The signs indicate to me that the "profits" they have reported at each dividend period have no relationship whatsoever to any trading that has been done and are being paid out strictly based on how much capital has actually been invested in this project.


I would love to be wrong about what the numbers seem to be suggesting, and perhaps there is a good explanation.

[lynn_402]

Good analysis, Devos. I'd like to add that it's weird how the dividends have been always perfectly consistent, in weeks of high volatility and in weeks of low volatility. It's also suspicious how the considerable problem of running at a 50% loss per week has only been adressed three months after IPO, two days before the last shares were sold. If this is another of those scams that seemed fulled of potential (like neobee..), I'll give up and put all my coins in cold storage

[twentyseventy]

I completely agree..

I understand they use the bitcoins from IPO sales to invest and that if the price of bitcoin goes down there revenue in fiat goes down. The payment of bitcoin in dividends is steady but obviously the dollar value has gone down which can mess your business model up.

But to claim a 50%- deficit i just find hard to believe.

Release of some accounting be appreciated.

From the e-mail sent to share holders:
"We have encountered a problem although the AUTOTRADE is in earnings, in accordance with
the calculation of each participating is 20% of trading profits, the current profits can not
afford our operating costs. According to the latest four dividends, our total dividends income
is (20.96+20.74+20.07+19.6)*20%=16.274BTC, converting to RMB is about
16.274*3000=48822, which can not pay eight team members’ salary, in addition, office area,
computer depletion, water and electricity fee, internet fee and many other operating charges,
by our rough calculation ,the operating costs of each month is more than one hundred
thousand, the deficits will persistent even though one million of AUTOTRADE have been sold
out."

Clearly that is unsustainable.

   We have many kinds of hedging strategy. China with China's exchange hedge, China and foreign exchange hedge, foreign and foreign exchange hedge, we will adopt different hedging strategy, the following is strategy example.
   【LTC hedging strategy1】   
      Step0. We will exchange less than 100 BTC to LTC as the base currency reserves.
      Step1.BtcAutoTrader automatically detected the price of LTC is lower in btc-e than okcoin and reach the set value.
      Step2.BtcAutoTrader buy 10LTC with BTC in btc-e.
      Step3. BtcAutoTrader sell 10LTC in okcoin to get the CNY.
      Step4. BtcAutoTrader exchange all the RMB into BTC in China .
      PS:Step2、3、4 complete at the same time.
   【XPM hedging strategy1】   
      Step0. We will exchange less than 100 BTC to XPM as the base currency reserves.
      Step1. BtcAutoTrader automatically detected the price of XPM is lower in btc-e than bter and reach the set value.
      Step2. BtcAutoTrader buy 10XPM with BTC in btc-e.
      Step3. BtcAutoTrader sell 10XPM in bter to get the CNY.
      Step4. BtcAutoTrader exchange all the CNY into BTC in China.
      PS:Step2、3、4 complete at the same time.
      
【Operation strategy】
   We will buy enough of the high performance computer to ensure our BtcAutoTrader to 7 * 24 hours running, and each machine trading only one type of Crypto-Currency.For example：
   PC1：Only LTC hedging.      
   PC2：Only XPM hedging.
   PC3：Only BTC hedging.      
   PC4：Only QRK hedging.   
   PC5：…

【Overview of BtcAutoTrader】   
   1. Can be 24 hours a day for unmanned their duties and constantly monitor the  price of the BTC,LTC,XPM in different exchange.      
   2. According to the set can monitor multiple exchanges at the same time, 10 or more.      
   3. Can set the hedging price differential, alert when reach the set value.      
   4. Automatically monitor the pending order in the exchange and buy or sell less quantity than the order to ensure the deal finished.

Emphasis mine on both posts. Why is there so much overhead for a simple arbitrage scheme? You need to pay salary for EIGHT team members?

For the record, I steered well clear of this (as with anything on Cryptostocks); I seriously question why there is so much overhead for this kind of operation. Been waiting for this to go up in flames for a while.

[mikaeldice]

Beyond the reportedly exorbitant expenses and the fact that they don't understand that 'profits' are what's left over after expenses, you guys might question why they moved into selling software (their competitive advantage, even) when the stated purpose of the fund was for arbitrage (or 'hedging' as they call it).

[novaboy2k]

we've been scammed... DUMP!

[nwfella]

I do believe I hear a fat lady warming up.

[junkonator]

I do believe I hear a fat lady warming up.

A fat one, too? Lookin' forward!

[bentleysui]

Autotrade, since you are working at a loss, where is the loss paid from? Is it held from the employees salary or are the funds from IPO used to cover for that? The constancy of the dividends payouts seem to indicate that your employees are taking the loss, but I'd like a confirmation on this.

In any case, you should not pay dividends when working at a deficit - this can bring nothing good long-term.

Dear lynn_402,

The loss paid from Our own start-up capital,Once VC plan to invest in our company, promises to solve our loss problems, but because of the negotiation process BTC price from 5000 RMB to fall lowest 2500 RMB, they feel that the risk is too high, so they recently terminated negotiations.

[bentleysui]

Dear AUTOTRADE investors,
Dear users and distributors have been paid,
Dear users and distributors want to buy,

We are very very sorry,We didn't expect new products will bring so good/bad effect.
Now our great pressure,We don't hope you misunderstand our intention.
We decided to suspend the sale of BtcAutoTrader,
Please give us a little time to listen to our explanation,
and whether to continue to sell BtcAutoTrader,
We will launch a vote as soon as possible, please wait patiently.
Thank you very much.

Best regards.
Your AUTOTRADE Team.

[novaboy2k]

Dear AUTOTRADE investors,
Dear users and distributors have been paid,
Dear users and distributors want to buy,

We are very very sorry,We didn't expect new products will bring so good/bad effect.
Now our great pressure,We don't hope you misunderstand our intention.
We decided to suspend the sale of BtcAutoTrader,
Please give us a little time to listen to our explanation,
and whether to continue to sell BtcAutoTrader,
We will launch a vote as soon as possible, please wait patiently.
Thank you very much.

Best regards.
Your AUTOTRADE Team.

How does an automated hedge fund cost 100000k a month?

[bentleysui]

Dear AUTOTRADE investors,
Dear users and distributors have been paid,
Dear users and distributors want to buy,

We are very very sorry,We didn't expect new products will bring so good/bad effect.
Now our great pressure,We don't hope you misunderstand our intention.
We decided to suspend the sale of BtcAutoTrader,
Please give us a little time to listen to our explanation,
and whether to continue to sell BtcAutoTrader,
We will launch a vote as soon as possible, please wait patiently.
Thank you very much.

Best regards.
Your AUTOTRADE Team.

How does an automated hedge fund cost 100000k a month?

We introduced when AUTOTRADE IPO, our team is 8 people.
We have members to monitor BtcAutoTrader for 7x24, some emergency need need manual processing.
Now everyone's costs in 9 k ~ 15 k/month.
In addition, office area, computer depletion, water and electricity fee, internet fee and many other operating charges.

[needmoney]

Reserved I'll look it.

[bcmine]

Dear AUTOTRADE investors,
Dear users and distributors have been paid,
Dear users and distributors want to buy,

We are very very sorry,We didn't expect new products will bring so good/bad effect.
Now our great pressure,We don't hope you misunderstand our intention.
We decided to suspend the sale of BtcAutoTrader,
Please give us a little time to listen to our explanation,
and whether to continue to sell BtcAutoTrader,
We will launch a vote as soon as possible, please wait patiently.
Thank you very much.

Best regards.
Your AUTOTRADE Team.

How does an automated hedge fund cost 100000k a month?

We introduced when AUTOTRADE IPO, our team is 8 people.
We have members to monitor BtcAutoTrader for 7x24, some emergency need need manual processing.
Now everyone's costs in 9 k ~ 15 k/month.
In addition, office area, computer depletion, water and electricity fee, internet fee and many other operating charges.

In US Dollar business you can make up to 2 % ROI every month in arbitrage. With approx. 8 % you are doing fine, your capital of 750 XBT is just too small and the market probably not big enough for more. You know it better.

Running a fund is a hard business. Good luck and I do believe in a good solution for you and for the shareholders

[novaboy2k]

Dear AUTOTRADE investors,
Dear users and distributors have been paid,
Dear users and distributors want to buy,

We are very very sorry,We didn't expect new products will bring so good/bad effect.
Now our great pressure,We don't hope you misunderstand our intention.
We decided to suspend the sale of BtcAutoTrader,
Please give us a little time to listen to our explanation,
and whether to continue to sell BtcAutoTrader,
We will launch a vote as soon as possible, please wait patiently.
Thank you very much.

Best regards.
Your AUTOTRADE Team.

How does an automated hedge fund cost 100000k a month?

We introduced when AUTOTRADE IPO, our team is 8 people.
We have members to monitor BtcAutoTrader for 7x24, some emergency need need manual processing.
Now everyone's costs in 9 k ~ 15 k/month.
In addition, office area, computer depletion, water and electricity fee, internet fee and many other operating charges.

In US Dollar business you can make up to 2 % ROI every month in arbitrage. With approx. 8 % you are doing fine, your capital of 750 XBT is just too small and the market probably not big enough for more. You know it better.

Running a fund is a hard business. Good luck and I do believe in a good solution for you and for the shareholders

Its just not going to happen. They are what you call financially screwed!
They tried getting an investor to "bail" them out.. But they said no... Sell your shares now while they are still worth something... I took a 30% hit and coins now in cold storage to regain the fiat loss.

[msc_de]

Dear AUTOTRADE investors,
Dear users and distributors have been paid,
Dear users and distributors want to buy,

We are very very sorry,We didn't expect new products will bring so good/bad effect.
Now our great pressure,We don't hope you misunderstand our intention.
We decided to suspend the sale of BtcAutoTrader,
Please give us a little time to listen to our explanation,
and whether to continue to sell BtcAutoTrader,
We will launch a vote as soon as possible, please wait patiently.
Thank you very much.

Best regards.
Your AUTOTRADE Team.

How does an automated hedge fund cost 100000k a month?

We introduced when AUTOTRADE IPO, our team is 8 people.
We have members to monitor BtcAutoTrader for 7x24, some emergency need need manual processing.
Now everyone's costs in 9 k ~ 15 k/month.
In addition, office area, computer depletion, water and electricity fee, internet fee and many other operating charges.

In US Dollar business you can make up to 2 % ROI every month in arbitrage. With approx. 8 % you are doing fine, your capital of 750 XBT is just too small and the market probably not big enough for more. You know it better.

Running a fund is a hard business. Good luck and I do believe in a good solution for you and for the shareholders

Its just not going to happen. They are what you call financially screwed!
They tried getting an investor to "bail" them out.. But they said no... Sell your shares now while they are still worth something... I took a 30% hit and coins now in cold storage to regain the fiat loss.

agree what you said.

buy low and sell high and away, i did it with a little profit this morning and bye