4 Months of Crypto Trading Bots performance compared to holding Top 20 crypto coins

A month ago I posted a 3 month comparison between my crypto trading bots portfolio and a portfolio in which I’m holding 20 different crypto currency  coins. The goal is to see if the trading bots can outperform the crypto currency market.

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

Now, with a month of extra data, the picture should become clearer. Are the crypto trading bots able to generate a higher revenue than the crypto currency market? Firstly let’s have a look at where we left of last month.

Bots vs Top20Coins HODL
3 month performance of crypto trading bots (blue line) and holding rhe Top 20 crypto coins (orange line)

Due to a booming November month the Top 20 crypto currency coins portfolio (orange line in the chart) turned an average loss into a 12,65% average profit (Nov. 23rd), and closed in on the result of the portfolio of crypto trading bots (blue line) of 14,76%.

What happened in the period of Nov. 24th until Christmas? The results are in the chart below.

4 month performance of crypto trading bots (blue line) and holding rhe Top 20 crypto coins (orange line)

As you can see the last month has been a period of great volatility. The results over the past 4 months are as follows (3 month results):

  • Portfolio of crypto trading bots: +16,34% (14,76%)
  • Portfolio of Top 20 crypto currency coins: +7,33% (12,65%)

The crypto trading bots have been able to gain while the average value of the crypto currency coins lost more than 5% in value. The outperformance of the trading bots is 9% over the 4 month period.

A good way to be able to compare both portfolios even better is to use the Sharpe ratio. The Sharpe ratio was developed by Nobel laureate William F. Sharpe and is used to help investors understand the return of an investment compared to its risk. Risk in this case is equal to volatility. A portfolio with a high degree of volatility is riskier than a portfolio with lower volatility. High volatility brings with it chances of higher profit but also chances of higher loss.

  • The Sharpe ratio adjusts a portfolio’s past performance for the excess risk that was taken by the investor.
  • A high Sharpe ratio is good when compared to similar portfolios or funds with lower returns.

In the chart below we see the Sharpe ratio of the crypto trading bots portfolio represented by the blue line and the portfolio of 20 crypto currency coins represented by the orange line.

Sharpe ratio of the portfolio of crypto trading bots (blue line) and the portfolio of 20 crypto currency coins (orange line)

The conclusion that can be drawn from the higher Sharpe ratio of the crypto trading bots portfolio is that their risk-adjusted return is also better than when simply holding 20 crypto currency coins during the last 4 months.

Next month in a new update we will see if the trading bots can build on their outperformance or if there is another boom in the crypto currency market which makes a simple coins hold more favorable. If you have any questions or suggestions don’t hesitate to comment.

Profile: DemaTrading.ai (DT), Bots Creator

DemaTrading

DemaTrading.ai was founded in 2020 with the idea to help traders reach an audience. Our team, of about a dozen professionals, including freelancers and  algo- suppliers, has years of experience in trading in most financial markets, both manually and automated. Most of our experience is within the crypto and forex markets. We also have an extensive background in artificial intelligence (ai), including machine learning (ml). After years of working in these markets we met a lot of people who had good trading strategies, developed over many years, with trial and error. A lot of these people had the trading skills, but not the technical skills to automate their strategies and publish their bots on public platforms. Even if they have the skills they often do not want to spend the time on programming, as this brings a lot of extra work. They want to focus on trading, and we help them to do just that.

Meeting many people who felt this way, the idea of DemaTrading.ai came to live. We want to help traders to focus on their trading and we take care of everything else. This means that both manual- and algorithmic-traders that have their trading automated already, can use our service. We sit down with these traders, and in case they trade manually we help them to automate their strategy first. After automating your strategy we can extensively test the algorithms on profit, risk, drawdown, and improvement possibilities. If the performance is not good enough, we will not publish the strategy. Publication requires a minimum quality guarantee. After optimization we deploy the algorithm in bots on our servers and we take care of all technical aspects. In addition we do the sales and marketing activities. You, the developer of the algorithm, just needs to provide your bank account details to get paid periodically. We chose for this approach to be able to offer traders a way to build up a form of passive income. For the trader this setup is a set-and-forget strategy while we manage everything ongoing.

To ensure full confidentiality we sign a non-disclosure agreement before you reveal your algorithm. After signing the contract we are contractually obliged to keep it a trade secret, and we can not secretly use your algorithm in any way. We also take the highest security measures that we can to prevent any kind of security breach. The algorithms run on AWS servers, 24/7 availability, that are highly secured, and the servers do not allow any incoming connections from unknown devices. The servers do not have a public IP associated with them.

If you have an original and/or unique algorithm that you think will sufficiently perform and that you would like to get published, have a look at our website:
www.DemaTrading.ai. We will be happy to help you automate and profit from your own ideas.

We expect that around february 2021, the first bots under the name DemaTrading.ai, will become operational on the RevenYOU-BOTS-Platform.

Demian Voorhagen,  co-founder of DemaTrading.ai

 

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.

Performance of single coin Ethereum and Bitcoin trading-bots update

Two weeks ago I shared the performance of the single coin bots trading Bitcoin and Ethereum on the Bots platform, in a blog post (see link underneath). Today I will share an update with two weeks of additional data.

Performance of single coin Ethereum and Bitcoin trading-bots

Two weeks ago we saw a sharp fall in prices of both Bitcoin as well as Ethereum. As shown in the previous blog some bots handled that correction better than others. In the last two weeks we have seen recovery of prices to previous highs and after that a market that moved sideways to slightly downward in the past days. How did the single coin bots handle this volatility? Let’s first have a look at the Ethereum bots chart.

11-week performance of the single coin Ethereum bots

The grey line represents the Ethereum price. The Ethereum bots are Dr. Spock by botcreator Rave before the Machine (orange line) and Refreshing Grey Mia by Agga Technologies (blue line). The results after eleven weeks are (results two weeks ago):

  • Ethereum: +58,45% (+39,5%)
  • Refreshing Grey Mia: -1,22% (-9,76%)
  • Dr. Spock: -12,05% (-11,15%)

Compared to two weeks ago Ethereum coin has shown an increasing outperfromance to the bots gaining almost 19%. Refreshing Grey Mia gained 8,5% in the same period, while Dr. Spock fell almost an additional 1%.

Next up the Bitcoin bots. Let’s have a look at the chart.

9-week performance of the single coin BTC bots

Bitcoin (lightblue line) is traded by four single coin bots. Himalaya (orange line) by Boosting Alpha, Dr. Block (grey line) and it’s sibling Dr. Block 2 (yellow line) by Rave before the Machine and Sweet Orange Mia (dark blue line) by Agga Technologies. The results over the last 9 weeks are (compared to results over 7 weeks):

  • Bitcoin: +72,33% (+56,3%)
  • Himalaya: +28,82% (+11,6%)
  • Dr. Block 2: +27,88% (+20,6%)
  • Dr. Block: +19,03% (14%)
  • Sweet Orange Mia: +14,12% (+15,5%)

The nice recovery of Bitcoin to previous all time high levels has been followed by Himalaya, improving from worst performing to best performing Bitcoin bot. Dr. Block 2 shows the same steady growth as before as does Dr. Block. The only bot that didn’t gain compared to two weeks ago is Sweet Orange Mia.

Next update in two weeks time. You can subscribe using the Orange sign up box next to this blog to receive Blog-updates  in your mailbox.

Profile: Dembots (DE), Bots Creator

business-idea-success

The goal of Dembots is to offer people an alternative to spread risk. Not offering trade bots, but a bot that has a buy and hold strategy that automatically re-balances your portfolio for you.
I have a one person business, with years of forex- and crypto-trading experience. With both, manual and automated algorithms. I have a degree in Artificial Intelligence (AI).

The current Dembots series is based on the idea of the S&P 500 and similar funds (roughly speaking). The bots buy the top coins (sorted on volume), keep them for a period of 2 weeks (currently). After that period it sells all the coins and re-buys them again, evenly divided. So if you for example start with 50 Euro in Bitcoin and 50 Euro in Ethereum, and this would grow to €55 in Bitcoin and €65 in Ethereum. The bot would sell both coins and then purchase them again for €60 each. This ensures you took a part of the profit you got from your Ethereum spike, and you never invest in one coin specifically. You invest in the general market, if the market raises, your investment raises. This could also be beneficial if a coin has dropped in price. The bot will increase the funds after re-balancing, and if the coin raises back to its old price you profit from that.

The technique utilized is based on machine learning, artificial Intelligence (AI), continuously optimized to, generate optimal risk on Return On Investment (ROI).  Most bots have a meaningful names like ‘Top10 Balance.bot’, “Top10 Balance2.bot”. “Top20 Balance.bot” and “Top30 Balance.bot”.
Currently all Dembots bots run on the RevenYOU-BOTS-platform.

Demian: “Previously I have developed algorithms.
Currently I am in the process of setting up a company where you can submit your trading strategy/algorithm and we will publish it for you. You do not need to have any experience. All you do is share your strategy and your bank account. Then we pay you a monthly fee for your part of the profit, that comes from the algorithm that you developed and supplied. We do the coding, serving, publishing, backtesting and strategy-optimization (including machine learning models).

⊗ Update 18 december 2020:
The latter service is now available on Dema trading.
DemaTrading

DemBots will no longer develop bots under this name but continue the work with a larger team in the company DemaTrading.ai.

 

 

 

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