- Matthew Tweed runs his cryptocurrency business from his parents’ home in suburbs outside London.
- 20-year-old Tweed told Insider that “about 90%” of the conversations he has about cryptocurrency take place on Reddit.
- It supported ether to eventually replace bitcoin due to its technological advantages.
Matthew Tweed learned his first valuable lesson about cryptocurrency six years ago, when he was just 14 years old.
“I got into investing in cryptocurrency because I found an interesting token that was meant to be for online markets, and I moved from that to bitcoin,” Tweed told Insider. “I don’t remember the name of the project – it didn’t go anywhere, but it showed me that there are a lot of great projects out there, but a lot of projects that won’t end up.”
Tweed now runs his low-latency trading company, Pine Financial, from his family home in Woking, a mid-sized commuter town, 25 minutes from London. He believes that it is possible to achieve 100% annual gains in this area of cryptocurrency trading.
Low latency, or market making, refers to the use of algorithmic trading to increase profitability. Tweed bots execute trades on cryptocurrency exchanges such as Deribit.
“I was able to get into the market-making space without having eight numbers behind me, but it’s not easily accessible,” Tweed said. “You have to put in a lot of time to be competitive.”
Tweed spent a significant amount of that time on Reddit. He said his first break in the market-making trade came from an interaction with another user on the social media site.
“At the end of 2018, I got into a low-latency trade,” he said. “It came from someone I met on Reddit — to be honest, 90% of what I did and the people I met came from various reddits on algorithm trading.”
“I trade frequently in a lot of my business,” Tweed added, referring to a Reddit forum with 1.2 million users focused on quantitative trading and automated strategies. “The specific subreddits are fine, but places like r/cryptocurrency don’t have a lot of good content, so I hardly look at them.”
Tweed embarked on a career in algorithmic trading just as his classmates began college. For him, formal education had limited appeal, given his success in cryptocurrency trading.
Regarding which cryptocurrency he likes the most, Tweed said he believes that the superior technological capabilities of the Ethereum network will enable its ether token to surpass Bitcoin.
“Ethereum will be more scalable — and that should lead the way to being able to offer much better applications, so you can have a decent smart contract-based decentralized system,” he said. “You will never be able to build smart exchanges on top of bitcoin – there is no platform for it.”
“In the long term, I think there is a good chance that Ethereum will become the king of cryptocurrency,” Tweed added.
Ether has been volatile this year, rising from $730 to a peak of around $4,000, before collapsing to below $2,000 a week later. The token has risen about 10% to $3,140 since last week’s implementation of the so-called “London Hard Fork” upgrade, which initially consumed about $8,900 in coins per minute.
“I think Ethereum 2.0 would be great for scalability in the crypto space,” Tweed said. “Many smart contract platforms claim better scaling than Ethereum, but they are often too centralized, or make other basic trade-offs, which undermines the purpose of crypto.”
However, despite his success as a relative stranger, Tweed said investors need to be careful before throwing themselves into the crypto space.
“Cryptocurrency is small and somewhat niche — I wouldn’t recommend people throwing money at it,” he said. “There are a lot of ways retail investors can lose money.”
“There is a need for regulators to have industry knowledge, but in general, I am in favor of exchange regulation, risk disclosure, and education to protect retail investors,” he added.
Tweed pointed to “sh*tcoins,” such as the highly volatile currency dogecoin, as an example of an area where retail investors could lose money without stricter regulation.
“[Sh*tcoins] It’s entertaining, and I enjoy watching it, but I wouldn’t invest in it or keep it. “The price may go up in the short term, but there is no reason for that in the long run. In the short term, it is just about supply and demand – people are jumping on the meme.”