The month of April was an excellent month for our 48 trading bots.
On average the return on our bots increased with 24,5% in crypto terms (20% in EUR value). This compares very favourably with the price of the Bitcoin which decreased with 5% during the same month.
Our 3 new Dagobert Buck trading bots had a very good first month while the 3 new The Noogieman trading bots unfortunately started the first month with a loss.
Now working hard on new bots for our new brand “Illuminati” where we try to introduce some new trading concepts, again with a focus on high-risk bots (which are generally favoured on the trading platforms).
Today we put our first trading algorithm live under our new brand “Illuminati”.
Illuminati is the name of a secret society founded in 1776 in Bavaria, Germany that still today is linked to ruling the world as a sort of “fourth power”. The name Illuminati refers to the very secret society of quant developers that have been powering winning trading teams around the world in the last 10 to 20 years.
Quant algorithms have been powering Flow Traders, Optiver and IMC in the Netherlands, but also internationally firms like Rentech, Citadel, DE Shaw, Two Sigma, AQR and others. The core of these trading algorithms is built by a small, very global but high calibre group of quant developers.
Illuminati is now our fifth brand of trading algoritms, together with Boosting Alpha, The Noogieman, Dagobert Buck and Team Dakar. We aim to launch an additional 10 to 20 new trading algorithms under this new brand in the next 2 to 3 months.
In the dark days before Christmas, while contemplating my Bitcoin strategy for 2021, I asked myself the question which options are available. I came up with three different strategies; (1) Buying Bitcoin trackers, (2) Buying trading bots that have Bitcoin as basecoin and (3) Buying USDT based single coin trading bots that trade Bitcoin. All three strategies are contrasted against holding bitcoin on Binance (the yellow line in all charts).
First category: Bitcoin trackers
Bitcoin trackers invest your money in Bitcoin and do not touch it until you decide to sell. They promise to follow the price of Bitcoin 1:1. I purchased 3 trackers:
The Big Friendly.bot:
According to the botcreator, The Big Friendly.bot is the easiest way there is to buy Bitcoin. As soon as you start the bot, it invests in the mother of all crypto currencies: Bitcoin. Once this is done, it does not touch the investment at all.
VanEck Vectors Bitcoin ETN (DE000A28M8D0):
This Exchange Traded Note (ETN) gives direct access to the largest and most liquid of cryptocurrencies: bitcoin, 100% backed by bitcoins, stored in cold storage with a regulated custodian with crypto insurance (limited amount coverage) Tradable as an ETF with Deutsche Boerse Xetra. (More info: https://www.vanecketfs.nl/producten/VanEck-Vectors-Bitcoin-ETN/32/overzicht)
The results over the last 2 months are not very surprising.
As expected all three trackers follow the price of Bitcoin very closely. Only disadvantage of the two listed trackers is that you are not able to trade outside the stock market opening hours. This can be a big risk as you can’t protect yourself against price drops after closing of the stock market or during weekends. Cryptocurrency markets are always “on”, with 365/24/7 trading activity. In the event of a crash of the cryptocurrency market on Friday evening, you can only intervene on Monday morning.
The Big Friendly.bot can always be sold as the Bots platform strives to be open and functional 24/7.
Second category: Bitcoin based trading bots
These trading bots have Bitcoin as their base coin and should multiply their value in Bitcoin through trading Bitcoin-pairs. I selected three bots for my comparison.
CBS by Altrady:
A unique algorithm that works by automatically analyzing the market history for each available market, checks current prices against previous support levels and will ensure the bot buys low and sells high.
Thunderbird by Dagobert Buck:
This trading bot focuses on BTC pairs (BNB, ETH, LTC, AION, ALGO, ANKR, ARPA and ATOM) and tries to predict the future of a pair by estimating the USDT components. So BNBBTC is predicted by looking at BNBUSDT and BTCUSDT.
DeFi Strategy by Dagobert Buck:
This trading bot focuses on the top 10 currencies in the world of Decentralized Finance (DeFi). The currencies are LINK, LEND, MKR, SNX, COMP, YFI, ZRX, REN, KNC and BAND. It uses the same strategy as Thunderbird, trying to predict the future of a pair by estimating the USDT components.
Two of the bots have been following the pricetrend of their basecoin Bitcoin, hence have not been trading much, at least not successfully. The third bot has lost value to Bitcoin through its trades. None of the bots have been able to make money through successful trades.
This goes for most of the bots on the Bots platform that do not have a stable coin (USDT) as their basecoin, but a coin like Bitcoin, Ethereum or BNB. When looking at their performance in crypto currency, most show a negative result. The bots are not able to successfully trade, and multiply the amount of basecoin you have invested in. The stellar results in euro as shown in the app are caused by even more stellar results of their basecoin.
Although most (unaware) users are happy with the results of these bots, and Revenyou is proudly using these results in there marketing stratgies, investing in a tracking bot that follows the pricetrend without intervening or investing directly in the coin (not through a bot), would have resulted in a higher gain.
Third category: USDT based single coin trading bots that trade Bitcoin
These trading bots have stable coin USDT as their basecoin and try to multiply their value by trading Bitcoin. I selected two bots for my comparison.
Himalaya by Boosting Alpha Netehrlands:
A moderate and stable bot that only trades in Bitcoin. Through its cautious approach it tries to participate in winning prices and to stop in time at falling prices.
Sweet Orange Mia by Team Agga Technologies:
This trend trading bot trades in Bitcoin and was created to focus only on the greater benefits of the crypto market. The bot will stop trading if the market is stagnant.
These bots will not gain as much as Bitcoin, but are designed to hold on to their profits in declining markets. Two months is too short a period for reviewing or judging these bots, especially in the growing market we have experienced for the past two months. Although the chart shows that the bots were able to hold on to gains when Bitcoin prices fell, and even outgain Bitcoin in certain instances, the overall gains in two months are half of the Bitcoin gains.
Unlike trackers and BTC based bots, these trading bots will exit declining markets themselves and hide in their stable coin to protect gains. Less risk, more ease of mind for the owner.
A fourth strategy which I have started in the beginning of February is trading Bitcoin myself on Binance. Together with a friend I am developing a strategy to multiply the amount of Bitcoin through trading in BTC pairs (more or less simular to category two described above). Our goal is to earn more bitcoins and to profit from rising Bitcoin prices. If you don’t have the time, knowledge or interest in developing your own trading strategy another option is copy trading, where you can automate your Bitcoin trades using signal providers.
Let me know through the comments if you know of any other strategy, if you have other experiences with the strategies described above, or if you have any other comments or additions.
Now that Revenyou has come up with their own Bots League (you are welcome for the idea) it is time to publish the final results in my Battle of the Bots league.
In the Battle of the Bots series I have compared the performances of various crypto trading bots (see previous blogs for an explanation and a description of the competing bots. Link at the end of this post). The monthly results of three series of battles between three trading bots of different botcreators could help in deciding which bots or botcreators to choose.
Here are the final results.
Battle of the Bots 1
Top10 Balance 2 bot +163,02%
Sweet Orange Mia bot +63,35%
Power of Pi bot +22,33%
Battle of the Bots 2 (in crypto value)
Joe Daredevil bot +6,36%
DeFi Strategy bot -8,30%
CBS by Altrady bot -26,50%
Because DeFi Strategy bot and CBS by Altrady bot have Bitcoin as their basecoin, and Bitcoin has increased in value over the past three months, these trading bots have increased more in euro value than their USDT based counterparts. USDT (US Dollar stablecoin) has decreased in value compared to the euro.
In the Battle of the Bots series I will compare the performances of various bots. The monthly results of three series of battles between three trading bots of different botcreators will be posted for the next year. The goal is to evaluate the bots performance over a longer period of time, both in winning as well as in decreasing crypto currency markets.
In the third battle a long time favorite of many bots-users will compete against two BTC based bots. What difference does the base coin make?
JoeDaredevil by Boosting Alpha: This bot invests in 18 high volatility coins, lesser known coins with lower market volumes. Therefore it targets a relatively high profit potential. Estimated annual return is 129%. Risk level according to the bots app is 9/12. Basecoin USDT.
CBS (CryptoBaseScanner) by Altrady: The oldest bot on the platform. A unique algorithm that works by automatically analyzing the market history for each available market, checking current prices against previous support levels so that the bot buys low and sells high . Testing results predict a 36% return on investment (ROI). A risky bot according to the bots app, 10/12. Basecoin BTC.
DeFi Strategy by Dagobert Buck: The bot focuses on the Top 10 coins in the world of Decentralized Finance (DeFi), a strong emerging submarket within crypto with a lot of growth potential. It targets a ROI of 70% per year. The bots app rates it as a high risk bot with risk level 11/12. Basecoin BTC.
The following chart shows the results of the three bots over the past two months.
JoeDaredevil, represented by the blue line, has been able to increase the amount of base coin, being Theter (USDT), while CBS (grey line) and DeFi strategy (orange line) have had a hard time finding and trading coins that outperformed their base coin BTC. It looks like CBS traded a coin that has experienced a free fall, losing more than 25% overnight (was it XRP?). Unfortunately the botcreator cannot give a clarification. Altrady’s reaction:“Unfortunately I cannot provide an answer myself because I do not receive any feedback from RY as to which signals have or have not been sold. I also suffer from it. I lost 30% in one night.”
Because of the rapid growth of BTC, the chart in euro view gives a completely different picture.
Final score after two month in basecoin (result after one month):
JoeDaredevil by Boosting Alpha : +17,16% (+10,85%)
DeFi Strategy by Dagobert Buck: -7,89% (-6,05%)
CBS by Altrady: -22,07% (+0,06%)
Final score after two month in euro (result after one month):
DeFi Strategy by Dagobert Buck: +85,38% (+27,75%)
CBS by Altrady: +56,92% (+36,07%)
JoeDaredevil by Boosting Alpha : +11,49% (+7,12%)
2020 has clearly been a very good year for Bitcoin, and therefore for trading bots with Bitcoin as their basecoin. Because of the enormous increase in value of Bitcoin (today’s value is almost 4 times last year’s value), the value in euro’s of BTC based bots has seen enormous increases as well.
The US dollar on the other hand (and with it USDT as the US dollar based stablecoin) has decreased almost 10% in value last year, compared to the euro. This is discounted in the results of trading bots based on the stablecoin, which can be seen if you compare above results for JoeDaredevil (17% in USDT vs 11% in euro).
The question remains if BTC based bots will perform as well with a decreasing Bitcoin. They should be able to make better trades if coins they trade catch up the 2020 losses against the Bitcoin. But they will not be able to surf Bitcoin’s increasing value any longer. USDT based bots will benefit from a rebounce of the US dollar. For now, looking at euro value, BTC based bots are the winners of 2020.