Quantitative Strategies That Combine the Strengths of Active and Passive Investing: NITG’s Intelligent Evolution
In recent years, quantitative investment strategies have rapidly risen in prominence across financial markets, becoming a focal point for many professional investors and platforms. As part of NITG’s platform development, the deep exploration of quantitative strategy potential has expanded users’ investment choices while supporting stable asset growth and effective risk management—especially in uncertain market environments.
Active vs. Passive: The Traditional Divide
Conventional investment approaches are generally categorized into active and passive strategies:
Active investing relies on fund managers’ expertise to identify undervalued assets through in-depth research of company fundamentals and market trends, aiming to outperform market averages and generate excess returns (alpha). However, it is heavily dependent on individual skill, subject to emotional and cognitive biases, often lacks consistency, and tends to involve higher management costs.
Passive investing, by contrast, seeks to replicate the performance of market indices to capture broad market returns. Its benefits include lower fees and diversified portfolios, making it suitable for long-term holdings. However, it typically lacks flexibility and rarely delivers returns above market averages.
Quantitative Investing: The Best of Both Worlds
Quantitative investing stands between these two approaches—effectively merging their core strengths. Using advanced computer algorithms and mathematical modeling, quantitative strategies extract actionable signals from vast volumes of historical and real-time market data, enabling the creation of systematic and efficient trading logic. Unlike subjective human decisions, quantitative models are data-driven and rule-based, resulting in more consistent, stable, and repeatable investment processes.
Alpha Generation in the Crypto Market
With alpha generation as its goal, quantitative strategies also show enormous potential in the cryptocurrency sector. By building multi-factor models, strategies can evaluate crypto assets across dimensions such as market capitalization, liquidity, volatility, on-chain activity, and capital inflows/outflows. For instance, in 2022, one quant team identified a group of undervalued tokens with rapidly increasing on-chain activity. Supported by strict risk controls and dynamic strategy adjustments, their portfolio achieved a return of approximately 28%, significantly outperforming Bitcoin during the same period—demonstrating the feasibility and effectiveness of alpha-focused quant strategies in digital asset markets.
Lower Costs and Higher Efficiency
Quantitative strategies also bring clear cost advantages to crypto investing. Through intelligent automation, the trade execution process is streamlined, reducing the need for manual analysis and order placement. Compared to human-driven crypto strategies, quantitative models can react more quickly to market changes and operate continuously without intervention. Data shows that professional quant teams often operate with 30% lower costs than manual strategies at equivalent capital levels, greatly improving capital efficiency.
Superior Risk Control in Volatile Markets
In the highly volatile crypto market, quantitative strategies offer robust risk management capabilities. By diversifying across multiple assets, dynamically adjusting positions, and incorporating real-time risk monitoring, these strategies can swiftly respond to market turbulence and reduce exposure. During the 2022 market correction, most investors heavily concentrated in single tokens suffered significant losses. In contrast, quant portfolios—backed by automated rebalancing mechanisms—effectively avoided systemic declines, experiencing much lower drawdowns than the market average and showcasing stronger resilience and defensive performance.
Quantitative Strategies on the NITG Platform
Within the NITG platform ecosystem, quantitative strategies have optimized investment efficiency while offering users an ideal solution that combines alpha generation, cost reduction, and risk mitigation. As technology advances and models continue to evolve, quantitative investing is set to play an increasingly pivotal role on the NITG platform—becoming a key tool for navigating market cycles and achieving long-term wealth growth.