#545: Jesse Proudman on Automated Crypto Investing

— Strix Leviathan operates as a defensive crypto hedge fund using momentum and machine learning strategies to capture 60-70% of bull market gains while limiting losses to 0-20% in bear markets, with a three-year track record.

— Makara is spinning out as a standalone SEC-registered robo-advisor product designed for mainstream investors who find crypto intimidating; it offers curated investment baskets (like Bitcoin-only or inflation-hedge portfolios) paired with educational content.

— SEC registration for Makara provides regulatory legitimacy and allows transparent fee structures; it demonstrates a willingness to work within the traditional financial system rather than circumvent it.

— The Bitcoin ETF narrative, while positive for the asset class, is overstated because it wraps a 24/7 asset into banker hours and prevents direct Bitcoin ownership or participation in the technological revolution.

— Institutional adoption in 2021 differs materially from 2017 retail speculation; institutions are deploying dry powder incrementally and buying dips quickly, preventing prolonged drawdowns seen in prior cycles.

— Regulatory clarity has improved significantly since 2018, with the SEC becoming more cooperative than state regulators; however, hostile tax policies (such as Washington State's capital gains tax) are pushing entrepreneurs toward more crypto-friendly jurisdictions like Miami.

— If you are an institutional investor or high-net-worth individual uncomfortable with 80%+ drawdowns, consider defensive strategies (like Strix's approach) that target lower volatility and Sortino ratios rather than maximum returns.

— For new retail investors intimidated by crypto complexity, platform products offering curated baskets with education (like Makara) may be preferable to self-directed exchange accounts or traditional ETFs, since they provide guidance while preserving direct asset ownership.

— Monitor whether the institutional bid for Bitcoin continues to accelerate and whether supply tightness (coins moving off exchanges) persists; these structural factors may sustain the bull market longer than 2017 cycles, making dip-buying more profitable for long-term holders.