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Cryptocurrency

Money never sleeps, but that’s not what keeps Sydney’s bedroom traders up at night

While most Sydneysiders are in bed, some, including Cronulla-based market analyst Lee Savage, trade sleep for the chance to make big bucks in cryptocurrency — the only market open 24 hours a day, seven days a week.

As the harbour city winds down, financial centres including New York come to life, jumpstarting the volatility — or larger swings in — the value of cryptocurrency that Savage says can create chances to make big bucks.

“In the beginning, I used to trade until about one o’clock in the morning, but then I realised that a lot of volatility was even later at night,” the former IT project manager says. “American traders are more active at that time and cryptocurrency has become closely tied to what’s happening in the US stock market.”

But it hasn’t been smooth sailing – especially in the past year. The price of Bitcoin, the most commonly traded cryptocurrency, plummeted from a high of about $60,000 in March last year to less than $25,000 in November, trading at about $30,000 in mid-January this year.

The collapse of global cryptocurrency exchange FTX in late 2022 impacted tens of thousands of Australians, after Brisbane-based Digital Surge, which had deep trading links with the company, lost $33 million.

But those people are a small proportion of the more than one million Australians who own cryptocurrency according to the Australian Taxation Office, or about 5 per cent of the Australian adult population, according to Roy Morgan.

Bondi, Westmead and Darlinghurst are among areas in the state with the highest number of accounts registered with cryptocurrency exchange Independent Reserve. Suburbs with the highest concentration of users with accounts include Homebush, Wentworth Point and Zetland.

Adrian Przelozny, chief executive of Independent Reserve, notes that higher-income suburbs tend to have a larger number of registered accounts and that income level is a substantial factor in the likelihood of an individual owning crypto. “Through independent analysis, we saw that the propensity to own crypto increases nearly four-fold among top income earners,” he says.

Savage’s routine has changed since having a daughter but, about five years ago, he would regularly trade into the early morning. “I’d usually trade from around six o’clock in the evening to two or three in the morning,” he says. “I didn’t have a family then, so it was a bit easier.”

Savage says it was his gaming habits and grit that kept him awake. “It was probably because I spent so many years gaming late at night,” he says. “I’m also a pretty determined person when I set my sights on something, coming from a modest upbringing.”

While his sleep schedule was often all over the place, the late nights prepared Savage for fatherhood. “I guess it was good training because when my daughter came along, my sleep schedule was also out of whack,” he says.

‘I don’t trade all hours of the morning. I’ve been there, done that.’

Trader, author and zen monk Peter Castle

Trader and author Peter Castle usually puts his last trades in before 11pm and uses stop losses — a mechanism that limits the amount that he could lose — in case the market plummets while he is sleeping. “I don’t trade all hours of the morning. I’ve been there, done that,” he says.

And while traders have an eccentric and high-strung image in pop culture, Castle is a zen monk, practising Buddhist principles.

“I’m really passionate about mental health,” he says. “I started meditating as a response to trading 30 years ago because I needed something to keep my head. It makes you less impulsive, calms you down and makes you more patient.”

Addiction is one mental health problem that University of Sydney associate professor of information systems Daniel Shlagwein says can be found in the space. “This element of gamification can set in when a lot of individual investors start trading crypto, by themselves, on whatever exchanges they want,” he says. “At the heavy trading end, we see this phenomenon of people exhibiting, by medical criteria, almost addictive behaviour towards cryptocurrency trading, whether they make money or not.”

Women are less represented in the crypto space than men, but data privacy manager Karin Van Eeden discovered a passion for it during the pandemic.

Data privacy manager Karin Van Eeden started a TikTok account during the pandemic to help educate people about cryptocurrency.

Data privacy manager Karin Van Eeden started a TikTok account during the pandemic to help educate people about cryptocurrency.Credit:Steven Siewart

“It actually started through social media including TikTok and learning bite-sized bits about crypto,” she says. “I got so obsessively deep into it that I ended up resigning from my job and going into crypto and tech full time.”

Van Eeden invested in crypto and documented her journey on TikTok, racking up more than 90,000 followers on her account @crypto_karin. “I just tried to be really honest, sharing my journey whether I made five grand or lost five grand,” she says.

Although she mostly trades in the early evening, Karin has traded later when there was an event or announcement.

“I remember setting my alarm a few times for the middle of the night when I was waiting for news,” she says. “When it’s US time and things are happening, you don’t want to miss out.”

‘When women do get interested and want to learn more, it can be a bit of a boys club.’

Data privacy manager Karin Van Eeden

About 3 per cent of women and 7 per cent of men in NSW owned cryptocurrency in August, according to data from Roy Morgan.

As a woman, Van Eeden says entering the crypto space wasn’t easy.

“When women do get interested and want to learn more, it can be a bit of a boys club,” she says. “Several times, I’ve shared a video and people will comment things like ‘you’re dumb’ or ‘you don’t know anything’. There can be a lack of respect for women in the space.”

Van Eeden notes that women statistically tend to be more risk-averse investors but says there needs to be more female-friendly resources.

“There’s a lack of introductory resources where women can feel like this a safe community to learn and ask questions and not be treated like we’re dumb,” she says.

Van Eeden says going to in-person events in Sydney — while also male-dominated — has helped her find crypto communities that welcome women.

Michael Berman, chief executive of Sydney-based finance broker FXTRADING.com, says crypto has exploded in popularity in the past three years, recently increasing the crypto offering on his platform.

Like Savage, he says the peak time for trading tends to be during the night. “Usually, big economic news in the US comes out at about 10.30pm,” he says. “So the bulk of the volume from our clients is traded in the middle of night.”

But he describes market activity as a “relay race” where, at almost all times, there are timezones in which large numbers of people are waking up and trading.

Berman attributes some of the rapid growth in crypto investments to central banks and governments pumping extra cash into the economy but says it’s still a trillion-dollar industry.

In the more than two decades that Berman has worked in the finance industry, he has seen a sizeable shift towards automated trading. “Technology is playing a bigger role in all trade execution,” he says.

Bexley-based software company NuGenesis has prototyped an artificial intelligence (AI) technology that chief executive Hussein Faraj says can predict price movements of cryptocurrencies Bitcoin and Ethereum four hours ahead with 99.9 per cent accuracy.

Factors that feed into the algorithm include social media activity such as tweets.

But it has cost them substantial amounts of money and time. “To teach an AI, we need to know everything,” Faraj says. “So we execute trades purposely to lose money. We’ve thrown a lot of money away to teach it.”

NuGenesis chief executive Hussein Faraj said his team has stayed up around the clock to develop their technologies.

NuGenesis chief executive Hussein Faraj said his team has stayed up around the clock to develop their technologies.Credit:Steven Siewert

That’s one way Faraj gives the AI data to work with when they can’t access information on market makers, such as brokerage houses, which influence the value of cryptocurrencies.

Liaising with international teams means that senior members of the team can work up to 20 hours a day.

“In technology generally, there’s no nine to five,” NuGenesis head of technology Luay Mohsen says.

As years have passed, trading has become more flexible, too. “People in the old days would trade from 10 o’clock in the morning until 4 o’clock in the afternoon and that was it,” Berman says. “Now you can literally trade all day.”

Savage doesn’t trade at night as often anymore, relying on his experience to pinpoint the best times. “With experience, you start to learn the times and dates when it makes more sense to trade rather than having to do it every night,” he says. “[But] I still do it sometimes because the US hours are very strong for when the volatility picks up.”

But the AI program, which the NuGenesis team have named Navis, works around the clock. “The guy never sleeps,” Faraj says.

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