In this episode of the Crypto Trader podcast, Jacob Canfield is joined by Murad Mahmudov, co-founder of Adaptive Capital, a new cryptocurrency hedge fund with a focus on on-chain analysis. Murad is a Princeton graduate, a former trading analyst, and is one of the most famous cryptocurrency analysts presently. They mainly discussed topics related to trading, both in the traditional space and in the emerging cryptocurrency market, as well the value of on-chain analytics to traders in this space.
Topic #1 Crypto Is Merely Taking Off
Murad shared how he got into trading. Even before his stint in Goldman Sachs, Murad already has ample experience trading from internship programs in trading firms in Singapore, Russia, and Europe, mostly trading metals and oil products, both physical and derivative contracts. He was already an avid trading and finance fan, and while in Goldman, he discovered a keen interest in cryptocurrencies. He spent the past two years making a switch from the traditional to the decentralized finance space. He argues that this newly emerging world of finance revolving around crypto and blockchain is a rocket ship of potential and growth.
Topic #2 The Market Is Still A Baby
Murad outlines that the cryptocurrency market is still immature. It is still inefficient, there is little to no institutional involvement, and there is a lack of dedicated technologies and algorithms. But because of this newness, Murad says that old techniques that don’t work in traditional markets anymore may work with crypto. Furthermore, he commented that the retail component of bitcoin will still dominate for the present crypto cycle, even in the gradual increase of institutional regulations. And because of this, the emotions of the markets will be more pronounced.
Topic #3 Trade Like Murad
Murad shared his trading strategies and techniques. He likes to use as many tools at his disposal as possible, and he only trades when his models, including fundamental and technical outlook, as well as insights from on-chain analytics, align. The more of these different approaches concur, then the more confident he is in his trade. He wants as many chips stacked in his favor as possible. He focuses on fundamentals as his guide for his future trades, and then his team utilizes the technology of on-chain analytics to corroborate evidence.
Topic #4 Uses of On-Chain Analytics
Murad underscores on-chain analytics. It is not as useful for intraday trading, day trading or scalping, but is highly effective in positional trading or even medium-term swing trading. Murad says that it is a very understudied but emerging field, and the people currently delving deep in this science can be counted on one hand. There has never been a financial instrument which is both an asset and a payment network at the same time, so there are certain connections there that the chain could analyze and discern.
Topic #5 To All Those Starting Out
The advanced trader may not need any more help, but the young trader will do better to have a guide at least. Most traders start with topics like price-action trading, moving averages, Fibonacci levels, which are high-level fundamental technical analysis, and are hard to the new trader. Murad lists out names to look out for, sites to look at, and things to read to acquire preliminary trading knowledge. He advises starting on the four to five resources he mentioned to teach yourself on fundamentals and on-chain analytics. He also says to reach out to him for more intermediate resources to satisfy your trading needs.
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