4 Months of Bots performance compared to a Top 10 coins HODL

Two weeks ago I posted a comparison between the 3 month performance of my crypto trading bots portfolio and a holding portfolio of the 20 most traded crypto coins.

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

Today I will compare the 4 month performance of my crypto trading bots portfolio of 28 bots (by various bot creators) with a holding portfolio of the 10 biggest crypto currencies. As more than 90% of crypto currency market capitalization is accounted for by the top 10 coins, a top 10 crypto coin hodl is the way to go if you believe in crypto currency growth in the years to come. But  the bots are build to outperform the market in the long run. At least that is what the marketing department is promising us and wants us to believe.

The 28 bots have been able to trade during the past 4 months. Get into positions of coins the algorithm believes would gain and exit the market when the algorithm predicts a decline. By leaving a declining market, previous profits are protected.

The top 10 coins were bought on August 19th and have been in portfolio until today, December 18th (the so called “buy and pray” strategy). The value of the portfolio is fully exposed to the whims of the market.

In both cases, buying the bots and buying the coins for holding, the buyer doesn’t have to take any action (besides pray). The bots act as your personal asset manager, trading with the money you give them and in the coins they are programmed for. The top 10 coins hodl goes where the market flows. No need to intervene.

In the past 4 months we have seen both a bear market with crypto currencies falling up to 25% in september and a bull market from the end of october until today with some crypto currencies gaining more than 100%. An interesting period to compare, so let’s look at the results.

28 crypto trading bots and top 10 coins compared

In the chart above the dark blue line represents the performance of the crypto trading bots (yellow line is the 15 day moving average) and the orange line represents the value development of the top 10 crypto coins portfolio (light blue line is the 15 day moving average).

Over the past 4 months the results are:

  • Top 10 Coins Hodl portfolio : +35,4%
  • Crypto trading bots portfolio: +16,2%

The chart below shows the difference between the trading bots and the coin hodl.

Difference (Bots performance -/- Top 10 Coins performance)

The blue line shows the difference in performance (in percentages) between the trading bots and the coins (yellow line is the 15 day moving average). A position above the X axis (0 line) means the bots outperform the coins. When in negative territory (below the X axis) the trading bots are losing and the top 10 coins hodl is making more money. The difference today (Dec. 18th) is 19,2% in favor of the top 10 coins hodl.

The preliminary conclusion drawn in my previous comparison post still stands. Trading bots shield your portfolio and protect it from falling crypto currency quotes as we can see in the first 90 days in both charts and also during the corrections on November 26th and the beginning of December (day 99 and 114). But my 28 trading bots (or “asset managers”) are not able to outperform the top coins in rising markets.

Will the marketing department be able to put the money where their mouth is, and will we see a decisive outperformance by the trading bots? The market will not be going up forever. As the saying goes, “what goes up, must come down”, so the trading bots will surely get their chances. Are the bots able to preserve their profits while coin value drops? I will continue comparing the performances and report back next month.

If you have any questions or suggestions don’t hesitate to comment.

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