Machine Learning for Crypto Portfolio Management Case Study: Week 4
The market has experienced a sudden resurgence. As Bitcoin continues to climb, strategies like Nomics ML have been flipping from hot and cold.
Let’s not wait another moment. Here are the results from the last week and what we should expect for the week to come!
Reminder: The methodology for this study was first outlined in our previous article.
Follow the progress of this study on Shrimpy.
Week 3 Results
The study has only been running for three weeks so far, but every week so far has been a shocker! While the first week showed a strong preference for Bitcoin, the complete opposite was true this last week.
#1 Bitcoin
Bitcoin experienced some impressive gains throughout the last week. This was an abrupt change from the previous week where Bitcoin saw steady losses.
After the third week of our study, Bitcoin has the lowest performance of any strategy we are testing.
Final Bitcoin portfolio value: $1,186.71.
#2 Top 10 Index
Due to the modest gains experienced by Bitcoin, it was expected that a portfolio based on a market-weighted index would also experience similar gains over the course of the last week since Bitcoin held approximately 77% of the value in the portfolio.
As the portfolio continues to rebalance, we will be able to better understand how the portfolio will deviate from the simple Bitcoin HODL portfolio.
Final Top 10 Index portfolio value: $1,194.99.
#3 Coin Gecko
The Coin Gecko portfolio saw a steady growth in value over the course of this third week. Every asset that was selected by the Coin Gecko strategy experienced a positive return this week.
The biggest winners selected by the Coin Gecko strategy include:
NEO (NEO): +27.68% Last 7 days
Ethereum (ETH): +19.56% Last 7 days
Final Coin Gecko portfolio value: $1,188.51.
#4 Nomics ML
The Nomics Machine Learning strategy has maintained a healthy lead against the competition. The projected profit from last week was +37.28% across all of the selected assets. With a final portfolio performance of +3.03%, the portfolio underperformed the projections by a significant margin.
The biggest winners selected by the Nomics ML strategy include:
VeChain (VET): +33.84% Last 7 days
IOST (IOST): +13.03% Last 7 days
The biggest losers selected by the Nomics ML strategy include:
Theta Token (THETA): -23.11% Last 7 days
Ren (REN): -7.15% Last 7 days
Overall, this week was a mixture of strong and poor picks from the Nomics ML strategy.
Final Nomics ML portfolio value: $1,278.91
Conclusions
Although the Nomics ML portfolio was able to maintain a healthy lead over the competition, we saw a mixed bag of good and bad asset picks from Nomics last week. If Nomics is going to maintain its lead, we will need to see more clutch picks from Nomics in the coming weeks, otherwise, the lead may begin to slip.
Note: The purpose of this study is to evaluate each of these strategies over the long-term. We cannot yet draw any conclusions for the long-term potential of these strategies after only two weeks. As a result, we should take these results with a grain of salt. Non-the-less, it was an interesting first few weeks!
Week 4 Strategy Changes
Now that we have covered the results from the last week, it’s time to break down how we will change each of these portfolios for the coming week.
Nomics ML Strategy
The Nomics ML Strategy leverages the 7-day price predictions generated by the Nomics ML engine. These price predictions are then used to determine which assets should be placed into our portfolio for this week. Additional information regarding the methodology can be found in our previous article.
Portfolio Allocations
The following assets were allocated exactly 10% of the portfolio value for the second week of this study.
1. Zilliqa (ZIL)
Projected 7-day profit: +38.66%
2. Cardano (ADA)
Projected 7-day profit: +31.08%
3. VeChain (VET)
Projected 7-day profit: +30.48%
4. Enjin Coin (ENJ)
Projected 7-day profit: +17.73%
5. Chiliz (CHZ)
Projected 7-day profit: +13.2%
6. IOST (IOST)
Projected 7-day profit: +12.57%
7. NEM (XEM)
Projected 7-day profit: +11.31%
8. Ethereum (ETH)
Projected 7-day profit: +10.53%
9. Ontology (ONT)
Projected 7-day profit: +10.25%
10. Steem (STEEM)
Projected 7-day profit: +10.23%
Reminder: We are only including the assets that are available on Binance in this portfolio.
The average performance estimate is 18.6% for the next 7 days for this portfolio.
Coin Gecko Score Strategy
The Coin Gecko Score Strategy uses the “Gecko” score that is calculated by the popular data site “CoinGecko”. These asset scores are used to determine the most promising long-term assets that should be included in a portfolio. Additional information regarding the methodology can be found in our previous article.
Portfolio Allocations
The following assets were allocated exactly 10% of the portfolio value for the first week of this study.
1. Bitcoin (BTC) - Score: 87%
2. Ethereum (ETH) - Score: 79%
3. XRP (XRP) - Score: 71%
4. Bitcoin Cash (BCH) - Score: 70%
5. TRON (TRX) - Score: 69%
6. Stellar (XLM) - Score: 68%
7. Litecoin (LTC) - Score: 68%
8. NEO (NEO) - Score: 67%
9. Monero (XMR) - Score: 67%
10. EOS (EOS) - Score: 67%
Note: There were no changes to the portfolio from last week, even though the Gecko Scores did change from the previous week. That means we will leave the allocations at 10% for each of the above assets and simply rebalance the portfolio one time.
Coin Market Cap Index Strategy
The Coin Market Cap Index Strategy uses the asset market caps that are calculated by “CoinMarketCap” to determine which assets should be included in the portfolio. Additional information regarding the methodology can be found in our previous article.
Portfolio Allocations
The allocations for the Top 10 Index portfolio strategy will be the following in the second week.
1. Bitcoin (BTC): 76.88% Allocation
2. Ethereum (ETH): 11.3% Allocation
3. XRP (XRP): 4% Allocation
4. Bitcoin Cash (BCH): 1.94% Allocation
5. Litecoin (LTC): 1.28% Allocation
6. Binance Coin (BNB): 1.15% Allocation
7. EOS (EOS): 1.08% Allocation
8. Cardano (ADA): 0.87% Allocation
9. Tezos (XTZ): 0.86% Allocation
10. Stellar (XLM): 0.64% Allocation (*New in Index)
Note: Chainlink was the only asset that was added to the index this week. Stellar (XML) was bumped out of the top ten and replaced by Chainlink. We will also adjust the allocations to match the new percentages and execute a single rebalance operation.
Bitcoin Hold Strategy
The most simple of the strategies we will be exploring is a simple Bitcoin HODL. The Bitcoin HODL strategy will allow us to benchmark these other strategies against the price performance of Bitcoin. Additional information regarding the methodology can be found in our previous article.
Portfolio Allocations
100% Bitcoin
Note: There will be no changes or rebalances for the Bitcoin HODL portfolio.
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