The volatility of digital currency is 8-10 times that of the traditional stock market. The conversion of the bulls and bears is very fast. If you only hold index funds, large capital will be lost in the short term in the case of volatile market; PWC 2019 digital currency hedge fund report pointed out that in the case of the bear market in 2018, Bitcoin fell by 72%, index funds fell by 80%, and funds using quantitative strategies had an appreciation of 8% instead, so it is necessary to use hedging strategy, futures and other products to manage your positions.
Quant funds will use position management and quantitative strategies to achieve sustained profitability in the bull market by adding chips while bear market leverage hedging, and control downside risks. In this way, by doing long or short, you can get excess profits in both bull and bear market.
The digital currency market is not efficient compared to the traditional securities market, and there are a large number of cross-exchanges and arbitrage opportunities. Digital currency asset ALPHA has a very low correlation with ALPHA in the traditional market, so the US dollar-based strategy is very suitable for allocation of alternative investments portfolio.