Building Cryptocurrency Index Funds in 2019


Shrimpy is becoming the default portfolio management application for the crypto space. Allocating a diverse portfolio on every major exchange has never been so easy. With only a few clicks, it is now possible to automate a portfolio which can track the market, execute a periodic or threshold rebalancing strategy, and simplify the way you manage your portfolio.

Introducing the Shrimpy Index Fund Builder.

This index builder is the most powerful way to index the cryptocurrency market with minimal effort. Instead of selecting custom portfolios, the index will automatically buy and sell assets on your favorite exchange to construct the index of your choice.

Why Use Shrimpy To Index?

In Shrimpy, we don’t restrict you to a few select indexes. You get infinite options to configure the index that works for you.

  • Select any range of assets for your index.

  • Allocate based on market cap, square root market cap, or an even distribution.

  • Set a maximum percent allocation per asset.

  • Fix a minimum percent allocation per asset.

  • Exclude assets your index should ignore.

  • Include assets your index should always include.

  • Set a asset buffer zone to prevent frequent asset swapping.

  • Pick a rebalance period or threshold that works for your strategy.

In order to better understand how each of these configurations work, let’s walk through a few examples of indexes that can be built in the Shrimpy application. First, we should look at the most basic index fund - one that tracks the top 10 assets by market cap.

This is an index of the top ten cryptocurrencies, weighted by market cap. USDT was excluded because it is tethered to a fiat currency.

This is an index of the top ten cryptocurrencies, weighted by market cap. USDT was excluded because it is tethered to a fiat currency.

Looking at this index, it is clear that the overall performance of this fund will heavily rely on the performance of Bitcoin. A portfolio which heavily relies on the performance of a single asset can be a risky bet. As a result, you may decide that you want to reduce the reliance on Bitcoin by putting a cap on the percent allocation allowed for any one asset. For the sake of this example, let’s say we want a maximum percent allocation of 20%.

Shrimpy allows you to easily solve this problem by entering a minimum and maximum percent allocation to cap the percent each asset can hold in your portfolio. This will prevent any asset from maintaining a target allocation greater than the maximum percent allocation and from achieving a target allocation less than the minimum percent allocation.

The max and min percentages that you chose are completely up to you.

In addition to setting a minimum and maximum percentage, let’s pretend you read our article on diversity, and this led you to wanting a more diverse portfolio. The article can be found here:

Crypto Users who Diversify Perform Better [New Research]

Once again, you can do this with Shrimpy. All you need to do is input the number of assets you would like to hold in your index. If you want assets 12 through 96, input 12 - 96. If you wanted 26 assets, simply input 26. It’s that easy.

The result so far is an index which has 26 assets that are weighted by market cap and has a maximum allocation percent of 20%. This index would look something like the following:

This is an index of the top 26 cryptocurrencies, weighted by market cap. The maximum allocation for any asset is capped at 20%.

This is an index of the top 26 cryptocurrencies, weighted by market cap. The maximum allocation for any asset is capped at 20%.

We can quickly see this is becoming a powerful tool for numerous use cases.

After allocating such a beautiful portfolio of 26 assets, let’s say you changed your mind. You decided you only want to index the top 6 cryptocurrencies. Additionally, maybe you read our article about optimizing asset distribution and determined that an evenly allocated portfolio would be a better strategy. This article can be found here:

Optimizing Asset Distribution For Cryptocurrency Rebalancing

Shrimpy allows you to instantly change your strategy and implement this new index within seconds. It’s the easiest thing you will ever do in the crypto space. Easier than logging into an exchange, making manual trades, and trying to calculate all of the percentages, that’s for sure. Let’s take a look at what the resulting allocations would be in Shrimpy.

Top 6 assets weighted evenly.

Top 6 assets weighted evenly.

Now that your portfolio has been allocated, you may be wondering how much maintenance is required.

Well, none.

Shrimpy automatically adds and removes the assets from your allocations as they come in and out of the rank you designated. If you selected to hold the top 5 assets by market cap, then you will always have the top 5, even when the market moves and the rankings change.

Rebalance period

Everyone knows us for our rebalancing, so you might be asking yourself “Ok, but does it rebalance”.

Don’t be silly!

Of course it rebalances. Select any rebalance period or threshold. Anywhere from every 1 hour to every million years. Thresholds can be set anywhere from 1% to 100%. You have the freedom to select the rebalancing strategy which works best for you. You can also rebalance instantly at any time by clicking the “Rebalance Now” button on the dashboard.

If you aren’t familiar with rebalancing, you can learn more here:

Portfolio Rebalancing for Cryptocurrency

Get Started Today

There is no application in the market that compares to Shrimpy. Gain the flexibility and freedom of a premium application for the price of nothing. While other applications charge an arm and a leg, we make the crypto world your playground and don’t charge you a dime. Enjoy everything Shrimpy has to offer by signing up today.

The Future of Indexing

Shrimpy is pioneering the way for crypto indexing. Without buying an index fund, you can get exposure to the most powerful indexes by maintaining the underlying assets on Shrimpy and indexing through the Shrimpy Index Fund Builder.

We aren’t done with indexing though. There are more features and capabilities that will be coming to our users on the Shrimpy application. As we explore indexing options, we will continue rolling out new ways to manage your portfolio.

Additional Good Reads

The Bitcoin Trading APIs for Cryptocurrency

How to Rebalance your Cryptocurrency Portfolio

Threshold Rebalancing - The Evolution of Cryptocurrency Portfolio Management

Crypto Users who Diversify Perform Better

Developing Trading Applications with Shrimpy’s Crypto Exchange API

Shrimpy is a trading bot and portfolio management application. Linking your Poloniex account to Shrimpy unlocks convenient trading features which can help you automate your crypto strategy. Try it out today!

Shrimpy’s Universal Crypto Exchange APIs are the only unified APIs for crypto exchanges that are specifically designed for application developers. Collect real-time trade or order book data, manage user exchange accounts, execute trading strategies, and simplify the way you connect to each exchange.

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The Shrimpy Team