The link between our data and market volatility -- not to mention actionable intelligence! -- means we spend a great deal of time on this blog discussing how and why quantifying the language of public policy delivers informational advantages and efficiency gains for quants and strategists alike.
But as EagleAlpha pointed out recently HERE the landscape of alternative data is much broader. They feature 15 distinct data providers delivering data specific to digital currency markets. The data categories look looks familiar to institutional market participants (flow and ticker data, sentiment and event risk datasets) even when the sources of the data are unique (on-chain, patented language quantification.
The rapidly evolving digital currency market is entering overdrive from the public policy perspective, compliments of Russia's invasion of Ukraine last month. For more on this, see our March 2 and March 21 blogposts). the moves occur against a broader backdrop of market maturation as institutional investors prepare to enter these markets at scale across the intermediation value chain (dealers, brokers, clearers, custody, derivatives, ETFs, etc.) Digital currency markets are poised to become far more mainstream.
A maturing market dominated by regulated financial fiduciaries will require the digital currency alt data providers and the data scientists/portfolio manager data consumers also to pivot and demand more relevant datasets. For example, institutional investors with rigorous risk pricing protocols will increasingly make sentiment data less valuable as a cryptocurrency pricing tool.
From routine horizon scans to quantitative volatility alerts and nowcasting factor inputs, the quantitative data we generate from the public policy process helps strategists and portfolio managers anticipate market volatility and risk exposures using objective data.
Quantitative data makes it easy to spot spikes in public policy volatility that will translate into market volatility as well as momentum patterns correlated with other, related issues
or with impacted industry sectors which extend far beyond the currency mining and trading. The same data that feeds our V3 Bloomberg Terminal App is available to institutional customers via API.
Capital markets traditionally have invested millions annually to acquire, analyze, and act upon strategic shifts implied by the policy process. Our patented process accelerates discovery and pattern identification by human readers as well as systematic traders and ML/AI trend projection engines.
An industry uniquely exposed to regulatory policy risks over the next 36-48 months means our own dataset will be increasingly necessary to evaluate the risks of investing in and holding exposures not only to the currencies themselves but also to the firms seeking to service this market. We look forward to growing with this industry.