Introduction:

Justin is a third year Rotman Commerce student at the University of Toronto. Over the summer, he worked as a cryptocurrency summer analyst at a Toronto-based block chain brokerage firm.

What is cryptocurrency and block chain?

Block chain is a distributive ledger system which means that transactions are all stored on a ledger, so they can all be traced anonymously. Cryptocurrency uses this currency to store value and that’s the way in which we can record and store financial transactions as a substitute for money. It is a type of currency which uses digital files as money. A lot of people have heard of Bitcoin, which was sort of the first crack at it, after which there has been an evolution in which we can apply cryptocurrency and block chain technology.

Can you tell us more about what you did as an intern?

I got to be a part of several facets of the company, but the main one was the OTC (over-the-counter) trade desk in which we match buyers to sellers of different cryptocurrencies. I helped facilitate some of the trades and worked on the research side. Another aspect of the company was similar to investment banking. We helped with ICOs, new projects and if there were any acquisitions. I did a lot of research projects as well, researching if there were any new areas in the crypto space. 

Can you tell us about the analytics you performed and which programs you used?

The type of analysis I did was really interesting because it was really broad. When I first got into the area I really saw crypto as a niche capital market space where everyone bought and sold bitcoin to try and make money. When I actually got in I learned that there are many different ways people can make money or start a business in the space. There’s Bitcoin mining, and I also did a project on arbitraging electricity. There’s also using this block chain technology to help people make payments, with operations or help large businesses with different parts of their supply chains. I did one really interesting analytical project on ICOs (initial currency offering) so I was able to bring in a little bit of capital markets experience to build up comparative analyses. A lot of the numerical stuff was on excel, whereas more of the qualitative stuff was more proprietary as we didn’t have established guidelines for it. We collected primary data through interviews and then we were frameworking that. I was able to bring in some VBA experience which helped me to bring in some trading models and streamline some of the booking process as well.

What is arbitraging electricity?

Bitcoin mining facilities use a lot of energy so they often have pre-agreed energy contracts (similar to energy futures) given the volatility of the electricity market. If the companies aren’t using the electricity and electricity markets are very high, then they can use these agreements to sell back their electricity to the market. A lot of companies don’t do that, but my company did so that was very interesting!

What did your day look like?

There was no strict timetable. My main daily task was to scavenge the news everyday like an Investment banker in the crypto space, and send a quick summary of some of the headlines to help other people in the company to start their day. Then, it would mainly be working on some projects that I had been assigned. We had very flexible schedules.

What advice do you have for students who are more interested in going into the crypto world?

It’s a great thing to look into! It’s interesting to see how the traditional finance space can translate into the crypto space and how they overlap. If you’re into finance, maybe you can look into the crypto trading markets first. You’ll see many similar trading models, which can spur your interest into how crypto is valued and see the similarities and differences there. There’s a lot of synergies between many different financial interests so you can really choose a space you want to go into. It’s still pretty new so if you think there’s a way you can add value, there probably will be!