Investors often break down into two main categories. There are those who prefer looking at the numbers and statistics, believing that these hard and fast facts hold the truths to what lies ahead for the investments that they pick. They see in the past performance prediction of what’s to come. They are known as quants, which is short for quantitative analysis.
On the other side of the coin are those who prefer instead to look at the fundamentals behind an investment, checking out information about the company, looking at the leadership, and generally deciding if there is substance behind the investment. This is qualitative analysis, which is the realm of the quals.
In terms of cryptocurrency, it gets a bit more difficult for each of these groups to claim supremacy, as both have obstacles that are up against them when they try to assess the digital coins that have taken the world by storm. It can make investing in cryptocurrency an extreme headache.
That’s why many people choose to enlist the aid of a trusted trading program along the lines of Crypto CFD Trader to do the work for them. Most likely, you will stick to your proven method when it comes to deciding upon which coins to buy and sell, and no number of obstacles will sway you from your path. Still, you should be aware of them so that you can make informed decisions when they try to block your way.
1. The Quants Can’t Look Back
As stated above, past performance is the main statistic which quants try to hone in on as a predictor of an asset’s future rise or fall. The issue with cryptocurrency is that even the oldest among the group, which is Bitcoin, has only about a decade of history behind it. It is hard to trust any past performance for a coin that is only a few years, or even a few months, old. That means that quants must look deeper inside the numbers for kernels of truth.
2. The Quals Are Missing Fundamentals
Again, many cryptocurrency coins have hardly been in operation for any period. And many come from murky origins, just a loose collective of people who wanted to try something and get it funded through a digital coin offering. How can you possibly find out the track records of those people? How can you know if their ideas hold water based on nothing more than a website white paper? There’s not a lot of fundamental of which you can grab hold.
3. Combining Ideas
Although the quants and the quals are often diametrically opposed, combining the two methods might be the best idea for cryptocurrency investing. After all, every piece of information must be savored since there is so little of it to go around. Quants need to find their inner qual and vice versa.
Cryptocurrency investing likely won’t settle the quant versus qual debate. But it might well lead to an uneasy truce between the two sides.
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