In the early days of crypto, the market was a playground for “discretionary” traders: those who relied on gut instinct, Twitter trends, and a high tolerance for risk.
However as the market matures into 2026, a shift is occurring. The reliance on gut feeling is being replaced by systematic and quantitative approaches, where decisions are driven by data-heavy models rather than human judgement.
The Data Overdose
The 24/7 nature of crypto is often pointed to as one of the main challenges for individual traders. It’s simply not possible for a human, who needs sleep, to monitor a market that operates around the clock.
However the more fundamental driver behind the rise in quant strategies is the sheer volume of data available to algorithmic traders. These programs can simultaneously follow real-time movements across dozens of blockchains, monitor inflows and outflows onto exchanges, and watch price movements of thousands of tokens across multiple exchanges, recognising patterns that would be invisible to a human observer.
Humans simply can’t process this amount of data. By the time an individual has read a single news alert, an algorithm has already cross-referenced that information with liquidity depth and historical patterns, executing a response in milliseconds. In this environment, the “edge” isn’t just about knowing what is happening; it’s about knowing everything at once and in real time.
Institutional Influence and Market Speed
This rise in crypto quant strategies mirrors a long-standing trend in traditional finance (TradFi), but at a significantly faster pace. According to JP Morgan, rules-based strategies now account for up to 80% of trading volumes in US equity markets. Crypto is heading in the same direction in a fraction of the time.
Over the past two years, major TradFi firms including Blackrock and Fidelity have launched crypto ETFs which now represent over $100b in AUM. This creates an even more challenging environment for discretionary traders.
“In a 24/7 market, discretionary trading isn’t just difficult, it’s inherently unscalable” says Tom Hickey, Head of Distribution at Neverwinter, a quantitative crypto fund. “Systematic strategies not only allow us to operate around the clock, but it means we can do it while considering thousands of data points simultaneously”
The AI Factor: From Rules to Learning
A factor in the rise of these strategies today, which wasn’t around during the rise of TradFi programmatic strategies, is the presence of Artificial Intelligence. Traditional “rules-based” algorithms typically follow a simple “if this, then that” logic. However, modern AI-driven strategies can use machine learning to create additional layers of logic which aren’t ‘hard-coded’ in.
This makes the strategies more adaptive. They don’t just follow a set of instructions, but instead they can learn to adjust their behavior based on shifting market sentiment, or identifying when a previously successful strategy has lost its edge and pivoting to a strategy better suited for the current environment.
A New Standard for Risk
Systematic strategies are becoming a preferred choice for investors looking for an unemotional way to navigate volatile crypto markets. These models can excel in areas where discretionary management can’t: including being active around the clock and the sheet volume of data they are able to consider. As the crypto market continues to grow, these strategies appear to be here to stay.
