3 Months of Bots performance compared to a Top 20 coins HODL

After a booming summer with enormous gains for crypto currencies in the months of July and August 2020, I started tracking the performance of my collection of 27 bots and comparing it to a selection of 20 crypto currency coins. Main reason was to decide if there was any sense in buying bots.

Some coins had profits of 60 to 70 percent in the two month summer period while my bots portfolio only made a fraction of that. Why not simply buy the coins and hold them in a crypto wallet?

The results of the last three months (end of August to end of November) are presented in this chart.

Bots vs Top20Coins HODL
Yield of a selection of 27 bots (blue line) vs Hodl of top 20 coins (orange line)

The result of my bots portfolio is shown by the darkblue line in the chart (the yellow line is a 15 day moving average). The result of the Top 20 Coins Hodl is shown by the orange line (with a lightblue line as 15 day moving average).

The chart shows that the months of September and October were less successful crypto currency months with an average loss up to almost 25% for the Top 20 Coins. The collection of bots, able to abort positions, limited its loss to 5%. November is as booming as the July-August period. The Top 20 Coins turned their average loss into a 12,65% average profit today (Nov. 23rd), and closed in on the bots result of 14,76%.

A preliminary conclusion can be made. Bots shield your portfolio and protect it from falling crypto currency quotes. The bots algorithms can close positions when signals point to decline. But bots are not able to perform as well as coins in rising markets.

Will bots be able to outperform a coins hodl over a longer period (up to a year)? That remains to be seen. The bots will have to preserve their gains by closing positions in case of a correction on the crypto currency market and reopen positions when the market turns up. Instead of the high peeks and deep valleys shown by the crypto currencies, the bots will have to develop a cascading pattern with smaller steps up, but without deep lows (like stairs or better an escalator).

I will continue sharing my comparison for the months to come.