Last week I started a pair trading account as I believe it is a good way to express alpha in crypto.
If you L/S two assets in the same sector (DeFi, AI, L1) in equal size you can largely remove beta exposure and what remains is the difference in alpha between the two assets.
There is a massive difference in fundamentals, structural flows, and momentum between altcoins in the same sectors, and pair trading is a great way to express a view on these factors.
Started with:
L $ENA / S $AAVE on 30th June (up 7.4%)
L $IP / S $WLD on 1st July (up 4.5%)
Happy with first week returns on the above and have now closed these, looking to enter new trades later today.
Hoping to share weekly updates on this portfolio. I am very surprised there is no fund running a purely L/S strategy and I'm very interested to see how the above plays out. Wish me luck.
and yes I am using leverage to augment returns
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