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Crypto Users who Diversify Perform Better [New Research]

We ran over 100,000 backtests for our latest research. This research helps answer the questions of 1) how many cryptocurrencies you should HODL or rebalance and 2) how often to rebalance for best performance. Crypto Users who Diversify Perform Better

May 19, 2018

Over the course of the last year and a half, our team has become recognized as a global leader for portfolio management in the crypto market. Executing over $350M in trades, Shrimpy has captivated the minds of tens of thousands of cryptocurrency traders.

If you haven’t already, sign up for a free Shrimpy account and join our Telegram group to stay up to date on the latest research. We also recommend reading our last article discussed the relationship between portfolio diversity, rebalancing, and performance.

After reading this article people were enraged.

They weren’t enraged for the reason you would expect. After all, we ran over 25,000 backtests in order to produce this data. They were enraged because the study stopped at 10 asset portfolios. They demanded we further the study to include more crypto! Just how much should you diversify?

Engineers don’t always want to be practical. Sometimes they just want to know how far something goes before it breaks. They wanted us to break the data.

So, we tried. The Setup

Instead of stopping at 10, we went up to 40 assets (our preferred general term for cryptocurrency) in each portfolio this time. That’s 100,000 backtests. The results of those backtests have been broken down by strategy type. We also converted the graphs to a simple line graph that shows the relationship between the number of assets in a portfolio and the median value of the portfolio at the end of a one year period. The initial investment for each backtest was set to $5,000.

Additional information regarding the setup for the backtests can be found here:

HODL This graph shows the results of a $5,000 initial investment that used the ...
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