The Indian cryptocurrency scene took what seemed to be a death blow back in 2018 when the Reserve Bank of India made it illegal for banks to handle cryptocurrency transactions. However, early in 2020, the Indian Supreme Court overruled the ban, and since then, a wave of cryptocurrency and blockchain innovation has been coming out of the country. These include scalability platform Matic Network, India’s biggest crypto exchange WazirX, and now, automated crypto trading firm, Mudrex.
Mudrex appears to have hit on a somewhat unique business model in the crypto trading and investing space, combining many of the best elements of copy trading and algorithmic trading. Copy trading, a form of social trading, involves a newcomer following the same trading strategy as a more advanced trader to try and replicate their success. It’s been popularized thanks to platforms like eToro, as it allows users to familiarize themselves with markets in a less risky way.
It offers a way to earn income for advanced traders, as copy trading platforms usually pay them a fee based on the number of trades copying their strategy. However, many of these platforms are fairly cumbersome to use, requiring traders to place each trade in the strategy one by one.
Algorithmic trading involves using bots to automate a chosen trading strategy, meaning that traders can take advantage of the 24/7 crypto markets without having to remain glued to their screens the entire time.
A Killer Combination for Investors?
Mudrex now offers cryptocurrency investors the opportunity to replicate more advanced traders' strategies in an automated way using algorithms. Effectively, it’s a passive investment strategy that involves hands-off active trading. Furthermore, there’s no programming or technical expertise required for investors to get set up. It’s a simple drag-and-drop interface, meaning it’s suitable even for novices.
Anyone can create an account for free and start investing straight away. Users can decide which trader they wish to replicate based on various factors, including the total returns, the cryptocurrency pair, or the exchange they want to use. Some of the returns shown on the dashboard are pretty impressive, most likely based on a significant upward push in the price of cryptocurrencies over recent months.
Investors can also choose to backtest a particular strategy to familiarize themselves with how it works before they put any real funds into live trading.
Investors pay a fee that’s defined by the trader whose strategy they’re replicating. This ensures that the traders must remain competitive to attract investors to their strategy. Mudrex reviews each strategy to make sure it’s robust enough to be listed on the platform. Fees typically range between 0.5 and 2 percent.
It’s also worth noting that Mudrex isn’t a custodial service. It works through the exchange APIs, meaning you’ll need an exchange account with at least one of the supported exchanges, which include Binance, BitMEX, Deribit, OKEx Perpetuals, and Coinbase Pro. Funds are stored on the exchange itself.
The company was founded by Edul Patel and Prince Arora, two Indian entrepreneurs who previously worked together at Deutsche Bank, where they were building a real-time risk management portfolio margining system. They started discussing how they could bring this kind of information to everyday investors, and Mudrex is the result of their efforts. They have been joined by 2 other members in the founding team, Alankar Saxena and Rohit Goyal. Patel previously founded Niffler, a $1m deals and discovery app that he eventually sold to Tapzo. Goyal also worked on his own projects before Mudrex, a gaming application called PaxPlay and one of India’s first grocery e-commerce businesses, Sabjiwaala.
Since launching in 2019, Mudrex has attracted $3 million in assets under management and is pursuing significant further expansion in early 2021. The company received seed backing from Y Combinator and aims to close a Series A round later this year.