John Iadeluca is the founder of Banz Capital, a Hedge fund, Offering high net worth investors exceptional risk-adjusted returns from a managed portfolio. John will share with us in this interview, the services Banz Capital will be providing and the opportunities in Blockchain, Cryptocurrency and Trading.
- Please tell us your name and about yourself. How did you get started with trading?
My name is John Iadeluca. I got involved with trading stocks and forex when I was around 12. I learned how to program when I was 11 and financial programming really interested me which the entirety of Wall Street seems to be shifting towards as of recently. When I was 17 I started working with blockchain development and saw the potential with trading crypto algorithmically after I built a Bitcoin faucet. I was never really good at math, but when I learned about trading quantitatively I couldn’t stop learning about it because I found it so interesting. Since cryptos are entirely digitized assets, they can be maneuvered and worked with differently than any other asset like traditional commodities. That’s how I got started.
- What is Banz Capital?
Banz is a digital asset based hedge fund, that focuses on quantitative trading, arbitrage, and ICO projects. The quantitative part speaks to the fact that digital assets can be analyzed in different ways than stocks because of their nature. Exchanges that you trade cryptos on have interactive API’s, that if you know how to work with, can yield analytical viewpoints. The arbitrage emphasis is done between exchanges. In the early 2000s, high frequency traders would be able to purchase shares of a stock on one ECN and sell on another. We took that concept and applied it to crypto. Since cryptos function through exchanges, you can do the exact same thing, replacing ECN with an exchange. Buy on one exchange for $1 and sell on another for $1.10. That’s 10% profit. Of course, doing this manually is quite difficult. Utilizing bots for this however, is a different story. I’ve been working with ICO’s for over a year now for a firm on Wall Street and it’s without a doubt the future of crowdfunding and fundraising. That’s the other emphasis that Banz focuses on. They’re new opportunities. We form partnerships with ICO’s to enable large scale investments. We don’t invest in an ICO without proper analysis.
- Would you like to tell us about your investment portfolio?
Sure, we allocate 70% to quantitative trading & arbitrage, and 30% for newer projects. Our biggest play recently was Universa, which we developed a case study for. They launched their blockchain’s mainnet version last week, and saw 500% increase from the original price. I got in at $0.01. I think it’s at about $0.05 at the moment, despite the entire market losing more than half its value.
I think our portfolio aims at being different than other funds. Anyone can buy Bitcoin and claim they’re a genius when price goes up, but the ones that profit during a bearish market are the ones that stand out. If you can make money when everyone else loses money, people start listening. Our portfolio isn’t something that was put together in 5 minutes; it takes weeks of diligent research, tweaking of programs, chart analysis, and more to ensure you make good plays.
- Who can have access to your fund and what are the requirements?
It functions as any other hedge fund, just emphasizes a different asset class than most, but the structure is there. The hedge fund is only available to accredited investors. This means you have to make over $200,000 a year, or $300,000 with a spouse, or have a net worth of over $1 million.
- What is the market size of Global cryptocurrency investment?
It stands at around $300 billion at the moment, but I think it’ll hit $1 trillion eventually. Whether that takes a year or 10 years, I don’t know. I doubt this is something that just dies out. Even if it does though, it’d probably be beneficial for our strategies.
- What do you think about the recent crypto market slump?
I think it’s healthy. This past December it was like everyone was becoming a millionaire overnight. Now it’s more about who’s putting in the most effort and research, who’s trading the most effectively, and who’s algorithms are working. There’s a lot of uncertainty, but now you’re seeing the huge Wall Street giants quietly getting involved. George Soros’ hedge fund just approved crypto trading. VC’s are pouring money into ICO’s behind the scenes. Deutsche Bank, Credit Suisse, Goldman Sachs all have veterans leaving to form their own funds or blockchain ventures. Santander just released their Ripple test project. It’s a cool time period. The market was sort of in a speculative area, which is now stabilizing. Like during the dot com bubble, once the dust settled from the bubble, you had giants that emerged like Amazon. It took some time, but they’re now one of today’s most promising stocks. I’m still bullish about the overall crypto market, but ones that actually serve purpose. There’s a lot of projects that add ‘decentral’, ‘global’, and ‘blockchain’ to their project description and call themselves an ICO, and people fall for it. That’s the area that needs to get sorted out before anything.
- What are the best cryptocurrencies or ICO’s to invest in now and why?
I’m going to say Ethereum because the amount of effort that goes into their tech from the development team is really promising. As a development platform, Ethereum actually serves a real purpose right now, and if you’re a programmer you know how incredible Solidity is. It’s literally like programming a monetary system. It’s not as speculative as other cryptos also. It’s reliable, and if you’re trading, it’s probably the easiest crypto to trade. Universa (UTN) is great also. I’m biased about them probably because I got in really early, but they’ve just launched mainnet and actually have real use cases.
As far as ICO’s, I can’t name any specific ones because of contracts I’m under, but look for experienced team members, real products, usable networks, and ensure legitimacy. Don’t fall for speculative projects.
- What is your advice for new traders or funds?
Make sure you do your research beforehand and have the money to spend on it. Also, make sure you have a strategy clear before anything. Build a track record. Form connections and try to network as much as possible. Being good at cold calling helps this a lot. Make sure your legal counsel is the best as well; trust me, it’s worth it to drop more money for a reliable legal team instead of facing consequences down the line. Also, if you’re trading don’t get emotional about a trade. Warren Buffet said that the markets don’t care about you, and that always stuck with me. I never get emotional about trading, I profit off of it and move on. You can’t get stuck on a crypto (or stock) because it goes down; it’s going to move regardless of whether or not you think it’s the greatest project in the world. You could be 99% sure about a play and be dead wrong and lose 80% within an hour in crypto, so be aware of that. Don’t get emotional, just make a play, obtain profit, and go on to the next. Cut losses quick if the latter.
- Speaking of Warren Buffett, what do you think of institutional investors that talk negatively about crypto?
I think they have the right to speak their opinions. It doesn’t really affect me, though. The technology’s there, and that’s all I really care about. As long as it’s there, I can profit off of it whether it goes up or down.
- If I want to make at least $1 Million USD from Cryptocurrency within 1 year, what are the best ways to achieve this?
Do a ton of research. Chances are you’re not going to make a million within a year trading crypto unless you’re really good at it, so just keep learning. Learn the markets and put in tons of hours studying. Also, try not to give up, which is really easy to do with trading. I lost a ton of money when I first started trading but I kept learning and eventually made multiple times more than what I lost. This doesn’t mean be stupid though, just learn how the markets work and don’t get emotional. Some of my first algorithms were god-awful. Part of getting success in trading is to be lucky too, there’s no doubt about that. Figure out the odds of something happening and play the odds. The option that exceeds 50% is more likely to succeed, right? So play it like that. Be smart too. There’s a quote that says ‘There’s a difference between a smart bet and a winning bet’, and I always remember that when I’m trading or investing. Make smart plays.
- How do you see the future of this market?
Lots of hedge funds are going to enter. You’re already seeing this, because from a programmatic standpoint, it’s so much more efficient to high speed trade crypto than it is a stock, at least from my experience. You’re already seeing this with hedge funds entering left and right, despite the huge price decreases. I think the markets are going to be heavily regulated within the future as well, I don’t think anyone can deny that. ICO funding will continue to grow. I think blockchain’s going to start to see the corners of most business models because of its immutability. Maybe even a regulatory framework detailing mandatory blockchain systems. Schools and universities are going to start updating curriculums. I’ve been contacted by MBA programs about developing a course structure for blockchain, which is really interesting. Blockchain developers are paid anywhere between $250-300/hour right now because of the shortage of workers. These are people who don’t even have degrees yet.
- Is there anything else you’d like to tell our readers?
Try to get involved, or at least learn about technological systems like blockchain. Companies are throwing money at employees that have knowledge in it, because there’s such a lack of workers. Blockchain, artificial intelligence, computer science and quantitative mathematics are taking over Wall Street, take note of that.
For more information, visit Banz Capital: http://www.banz.capital/