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Author Topic: Bitcoin Hedge Fund  (Read 2704 times)
FXTrader
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September 08, 2011, 10:25:04 PM
 #21

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Any time frame on this?
BTW, there should be two quite different models: maximize fiat vs maximize bitcoins.

The time-frame is dependent on the size of account I'll be trading.  If I am trading 100 bitcoin I would have no problem scalping for returns.  If I had a 5,000 bitcoin account however I'd target swing-type trades of 3-5 days...it really all depends on the liquidity.

My trading system is fractal, or it can be traded across any liquid timeframe.

My model - Maximize bitcoin.  I want this to be a very strong distinction for investors - I am seeking to maximize your bitcoin, not your fiat wealth.

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September 08, 2011, 10:26:51 PM
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Thanks for the flowers :-)
But we would only look into this once we would be registered as an official hedge fund, and we would provide full disclosure and transparency. 


Certainly, I understand your reticence.  I think it doesn't make sense to create a real/official hedgefund with the purpose of trading an instrument with a market cap less than $1 billion dollars.

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September 08, 2011, 10:36:05 PM
 #23

Yeah I definitely come from the regulated markets / regulated currencies so the constant fear of scam is something I'm not quite used to.


That mobile app is certainly a good idea, I'd need to look into it.  I'd prefer to do it the simple way and in the forum publicly request Magical Tux to lock the account for withdrawing as well as copy and paste an email sent to him requesting the same.  Basically I'd love for the operational risk/back-office functions to be out of my hands as much as possible.


And in terms of building a track-record...I'm considering limiting the max deposit to 10 bitcoin for the first investment cycle or two.


The purpose of this thread is to see if this is worth our time.
Using the mobile app it would already work without MagicalTux doing anything. You have an android phone?
10 bitcoin sounds reasonable. I tempted to try it.
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September 08, 2011, 10:42:50 PM
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Using the mobile app it would already work without MagicalTux doing anything. You have an android phone?

I actually do not have an Android phone.  I didn't need to check my email at stoplights anymore so I got rid of my smartphone.


Yeah so I'm a firm believer in being a steward of little and I understand that trust is earned.

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September 08, 2011, 10:51:20 PM
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Using the mobile app it would already work without MagicalTux doing anything. You have an android phone?

I actually do not have an Android phone.  I didn't need to check my email at stoplights anymore so I got rid of my smartphone.
So using currently available things it would work like this:
You need an Android phone/tablet to access my mtgox account with restricted rights (trade only). Having only the trade right you can sell/buy but not withdraw. The Android app is linked with your phone and is activated by a code generated by me after logging in with my yubikey.

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10 bitcoin sounds reasonable. I tempted to try it.

Yeah so I'm a firm believer in being a steward of little and I understand that trust is earned.
I agree.
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September 08, 2011, 11:00:56 PM
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So using currently available things it would work like this:
You need an Android phone/tablet to access my mtgox account with restricted rights (trade only). Having only the trade right you can sell/buy but not withdraw. The Android app is linked with your phone and is activated by a code generated by me after logging in with my yubikey.

So my basic problem with this setup is:
-My motivation in this is performance commission - What if I have a successful cycle and participants refuse to pay performance fees.
-I need to know my "account balance" so I can know how to best trade the markets and manage risk
-I don't want to spend the time accessing X number of accounts to enter a trade.  By the time I do that, my average cost could be awful.

Here is my desired setup:
-An account at Mt. Gox which is open to transfers for a day or two every two weeks
-I trade this account and collect a performance fee at the end of two weeks (on a high-water mark...I must make a profit for you or I don't get paid)
-At the end of an investment cycle, you can withdraw or deposit
-I want Magical Tux to freeze the account to transfers during an investment cycle

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September 08, 2011, 11:09:46 PM
 #27

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So using currently available things it would work like this:
You need an Android phone/tablet to access my mtgox account with restricted rights (trade only). Having only the trade right you can sell/buy but not withdraw. The Android app is linked with your phone and is activated by a code generated by me after logging in with my yubikey.

So my basic problem with this setup is:
-My motivation in this is performance commission - What if I have a successful cycle and participants refuse to pay performance fees.
-I need to know my "account balance" so I can know how to best trade the markets and manage risk
What do you mean? The mtgoxmobile app is a full featured trading client, it has all the functions of the mtgox website.
-I don't want to spend the time accessing X number of accounts to enter a trade.  By the time I do that, my average cost could be awful.
You mean once you have multiple clients?

Here is my desired setup:
-An account at Mt. Gox which is open to transfers for a day or two every two weeks
-I trade this account and collect a performance fee at the end of two weeks (on a high-water mark...I must make a profit for you or I don't get paid)
-At the end of an investment cycle, you can withdraw or deposit
-I want Magical Tux to freeze the account to transfers during an investment cycle
Now we have the risk on the client (my) side. What if you just withdraw the investment, either in the invest phase, or after the trade cycle.
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September 08, 2011, 11:19:21 PM
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You mean once you have multiple clients?

Yeah, basically I have no motivation to get into something that I can't leverage and grow.  If I can only do this for a max of X clients, then I don't think it's worth our time.

Quote
Now we have the risk on the client (my) side. What if you just withdraw the investment, either in the invest phase, or after the trade cycle.

This is where I want to work with Magical Tux and the community to get a solution.  The best way I can see is to only allow transfers to addresses which make deposits.  But the fault of this is what if I make a deposit myself and transfer to that address?

In an ideal world I would program in total percent return of the account per investment cycle and at the end of that cycle, no account can withdraw more than their initial balance +/- the percent return of the account times their deposit.

In the real world, I think we are going to have to start small and build trust.  I would love the opportunity to start with a few coins from a few people and begin posting regular profit or loss on these coins.

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September 08, 2011, 11:36:48 PM
 #29

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You mean once you have multiple clients?

Yeah, basically I have no motivation to get into something that I can't leverage and grow.  If I can only do this for a max of X clients, then I don't think it's worth our time.
Great plan.

Quote
Now we have the risk on the client (my) side. What if you just withdraw the investment, either in the invest phase, or after the trade cycle.

This is where I want to work with Magical Tux and the community to get a solution.  The best way I can see is to only allow transfers to addresses which make deposits.  But the fault of this is what if I make a deposit myself and transfer to that address?

In an ideal world I would program in total percent return of the account per investment cycle and at the end of that cycle, no account can withdraw more than their initial balance +/- the percent return of the account times their deposit.

In the real world, I think we are going to have to start small and build trust.  I would love the opportunity to start with a few coins from a few people and begin posting regular profit or loss on these coins.

What we need is just some option that requires both parties to agree to the actual withdraw, no withdraw without it. We have to ask Mark about this.

BTW, I want to be able to observe the whole thing. In other word, I want to be able to log in and watch your trades. Once your business has grown and earned trust, I am sure, you can trade on your own Wink. So that could mean you giving my mtgox mobile "watch" access.

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September 08, 2011, 11:43:46 PM
 #30

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What we need is just some option that requires both parties to agree to the actual withdraw, no withdraw without it. We have to ask Mark about this.

BTW, I want to be able to observe the whole thing. In other word, I want to be able to log in and watch your trades. Once your business has grown and earned trust, I am sure, you can trade on your own Wink. So that could mean you giving my mtgox mobile "watch" access.

I have no qualms with this.  I would be fine giving you watch access.  If this grows, however I am going to have to give results end of day or end of cycle simply to protect the position from other traders (hunting stops, etc.)

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September 08, 2011, 11:47:08 PM
 #31

What we need is just some option that requires both parties to agree to the actual withdraw, no withdraw without it. We have to ask Mark about this.

+1. I would like a wallet trust system similar to a bank account requiring x of y signatures for other projects I have in mind that would need to have multiple people with access to a bitcoin wallet.

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September 08, 2011, 11:50:59 PM
 #32

If there is going to be ties with Magical Tux and MtGox, I'll genuinely consider being a customer.
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September 08, 2011, 11:53:19 PM
 #33

If there is going to be ties with Magical Tux and MtGox, I'll genuinely consider being a customer.

What I want Mt. Gox to do is create something similar to this:


www.currensee.com

-The above is a company which created a "Facebook" of traders with real accounts
-The best of the best are allowed to manage others' money
-The traders keep a 20% performance fee and the company keeps 2% of the profits

Basically Mt. Gox creates a "manager" account type with this stuff programmed in so that I can focus on trading and not this type of thing.

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September 09, 2011, 12:00:24 AM
 #34

If there is going to be ties with Magical Tux and MtGox, I'll genuinely consider being a customer.

What I want Mt. Gox to do is create something similar to this:


www.currensee.com

-The above is a company which created a "Facebook" of traders with real accounts
-The best of the best are allowed to manage others' money
-The traders keep a 20% performance fee and the company keeps 2% of the profits

Basically Mt. Gox creates a "manager" account type with this stuff programmed in so that I can focus on trading and not this type of thing.

I think the whole system would be doable as a separate website using various mtgox technologies like redeemable codes and account api. But for now it has to be done "within" mtgox because otherwise there would be an issue with trust.
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September 09, 2011, 12:08:55 AM
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[clearing out this post]

B.A. Finance
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September 09, 2011, 12:16:00 AM
 #36

So I would love to get the ball rolling.

Basically if you're interested in being a first-mover on this, here's what I'd like to do.

-I am only going to accept deposits between .25 and 10 BTC - Anything more or less and I will return it
-You MUST email me at TheBTCTrader@gmail.com with the address you sent from and the quantity or I will return your BTC
-For these beginning days, I will not have a withdrawal period...basically if you feel uncomfortable, shoot me an email and I'll send your BTC back

Here is the address:
1Krw1p1TDdv5hJcCAqCJA54VRyrQNUzZts

You need some other type identifying people as transactions are public
http://blockexplorer.com/address/1Krw1p1TDdv5hJcCAqCJA54VRyrQNUzZts
Now I just wait for some transactions to appear and then I tell you it was me
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September 09, 2011, 12:21:17 AM
 #37

So I would love to get the ball rolling.

Basically if you're interested in being a first-mover on this, here's what I'd like to do.

-I am only going to accept deposits between .25 and 10 BTC - Anything more or less and I will return it
-You MUST email me at TheBTCTrader@gmail.com with the address you sent from and the quantity or I will return your BTC
-For these beginning days, I will not have a withdrawal period...basically if you feel uncomfortable, shoot me an email and I'll send your BTC back

Here is the address:
1Krw1p1TDdv5hJcCAqCJA54VRyrQNUzZts

You need some other type identifying people as transactions are public
http://blockexplorer.com/address/1Krw1p1TDdv5hJcCAqCJA54VRyrQNUzZts
Now I just wait for some transactions to appear and then I tell you it was me

Interesting, here's a workaround:

-You must tell me before sending BTC.  I will verify time stamps.  If not, I'll be returning BTC to the address it came from.

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September 09, 2011, 12:30:13 AM
 #38

So I would love to get the ball rolling.

Basically if you're interested in being a first-mover on this, here's what I'd like to do.

-I am only going to accept deposits between .25 and 10 BTC - Anything more or less and I will return it
-You MUST email me at TheBTCTrader@gmail.com with the address you sent from and the quantity or I will return your BTC
-For these beginning days, I will not have a withdrawal period...basically if you feel uncomfortable, shoot me an email and I'll send your BTC back

Here is the address:
1Krw1p1TDdv5hJcCAqCJA54VRyrQNUzZts

You need some other type identifying people as transactions are public
http://blockexplorer.com/address/1Krw1p1TDdv5hJcCAqCJA54VRyrQNUzZts
Now I just wait for some transactions to appear and then I tell you it was me

Interesting, here's a workaround:

-You must tell me before sending BTC.  I will verify time stamps.  If not, I'll be returning BTC to the address it came from.

I think it is easier to just give you a mtgox redeemable code. Once you have redeemed it, you post an acknowledge message here that includes the actual code. That way we produce some public track about the whole thing.
Can you give me some watch access to the account first?
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September 09, 2011, 12:32:10 AM
 #39

Hold up.  I'm going to delete that previous post...let's wait on this until we can get some feedback from Mt. Gox on how to better do this.

B.A. Finance
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September 09, 2011, 12:35:01 AM
 #40

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Can you give me some watch access to the account first?

Sure thing, want to post instructions?  I haven't explored how to do that.

B.A. Finance
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