With the rapid growth of the decentralized finance business, more cryptocurrency initiatives with a focus on DeFi products and services are emerging. Numerai is a hedge fund platform that creates financial prediction models using a combination of blockchain technology, machine learning, AI, and data science.
So, if the NMR crypto world has piqued your interest, but you’re not sure what it’s all about or where to start, this post will teach you all you need to know about it and prepare you to dive into one of the most user-friendly trade experiences possible.
Let’s look at all the reasons why you might want to invest in NMR crypto in 2022.
Numerai History
The Numerai cryptocurrency is an innovative new asset class that has been experiencing substantial growth since its launch in 2017. It’s also a great investment opportunity for those who are looking to diversify their portfolio and make some money.
The project was founded by Richard Craib as a way to crowdsource Artificial Intelligence predictions about how the stock market will perform in the future. Users can participate in this system by submitting predictions about the stock market, which are then used by the system to determine whether they should buy or sell shares of certain companies.
As you might expect, these kinds of crowdsourced predictions have proven to be highly effective at making more profits than traditional hedge funds. The average hedge fund is expected to return just 2% over time, whereas Numerai users have been able to generate returns of up to 30% per month with their AI algorithms.
What Sets Numerai Apart?
Numerai is unusual in that it allows people to trade stocks and submit their forecasting model using a combination of cutting-edge technologies. It rewards data scientists and users for submitting market prediction models and uploading signals. Users can earn NMR for their involvement through Numerai’s incentivization system, which is powered by AI, data science, machine learning, and cryptography.
Numerai is a one-of-a-kind program that allows data scientists and financial advisors to supplement their income by submitting trading plans based on pertinent market data. It represents a unique concept that raises the bar for similar networks as a crowdsourcing tool that serves as a decentralized hedge fund.
While data scientists will be most interested in the project, ordinary investors will benefit as well. You simply purchase the cryptocurrency and keep it. Rewarding models that correctly predict stock market moves while deleting staked coin that fails to deliver increases the value of the remaining crypto over time.
It’s Easy To Use
The main goal behind Numerai crypto was to design an easy-to-use interface that would allow people from all walks of life to invest their money without having any problems using it or understanding how it works. The platform has been designed with simplicity in mind so that everyone can use it without having any difficulties whatsoever.
Numbers Imply That Numerai Is Onto Something
Although many people have left the hedge fund industry, it is still a very substantial industry with a market capitalization of more than $100 billion. Numerai is now a small operation. Its cryptocurrency is worth $175 million.
Is it possible for this anonymous community of data scientists to outperform Wall Street’s big money? That’s exactly what Numerai has been doing so far. Many quant hedge firms will be crushed by 2020. RIDGE and RIDA funds from Renaissance plummeted 31% and 32%, respectively. Numerai, on the other hand, fared well, climbing 6% despite the COVID-19 volatility.
Numerai’s peer-to-peer fund returned 21% from September 2019 to December 2021, compared to net losses from typical quant funds. The model, which rewards originality and winning, appears to uncover new anomalies, generating outperformance.
This is, of course, only a two-year track record. However, if it continues to excel, the big money may take notice and join in. If that happens, Numeraire’s cryptocurrency will skyrocket in value. A tiny investment now could pay off handsomely in the future.
Final Thoughts
It would seem that the general public, even if they are somewhat familiar with the concept of cryptocurrencies, is still wondering about whether this investment is worth it or not, however, with practical applications of data-driven financing, and a highly-functional business model at the center of it all, there is a lot of potentials for Numerai to grow in the coming years.
Most importantly, Numerai has proven that its business structure can work. With enough time, effort, and thought put into it, it could become one of the most valuable companies of this decade.
