From Hypotheses to Factors: Constrained LLM Agents in Cryptocurrency Markets
Yikuan Huang, Zheqi Fan, Kaiqi Hu, Yifan Ye · 29 April 2026
arXiv:2604.26747 — q-fin.PM, q-fin.GN, q-fin.TR
LLM agents are promising tools for empirical discovery, but their flexibility can also turn discovery into uncontrolled search. Our framework casts the task as sequential hypothesis search: an agent reads an append-only experiment trace, proposes falsifiable factor hypotheses, and maps them to executable recipes, while a deterministic engine enforces fixed data splits, selection gates, transaction costs, and portfolio tests. Candidate actions are restricted to a point-in-time factor DSL, making both successful and failed hypotheses auditable.
This is the architecture. An agent proposes falsifiable hypotheses; a deterministic engine decides. The append-only trace and the auditability of failed hypotheses are the parts this system took most directly — every experiment here writes an immutable trace, and the rejections are published beside the rest.