Machine Learning for Crypto Portfolio Management Case Study: Week 7
It’s déjà vu.
The Nomics ML portfolio strategy has continue to tear apart the competition with another stellar week. It almost feels like we need to add more strategies to get some better competition.
Over the last month, our team has been tracking the performance of 4 different portfolio strategies. These include portfolios selected using Nomics Machine Learning, CoinGecko, market cap indexing, and a simple Bitcoin HODL.
Up until this point, we have been thoroughly impressed by the results of the Nomics Machine Learning strategy. It has separated itself from the pack with steady performance results over the last 6 weeks.
That’s enough about Nomics for now, let’s start digging into the results from the last week and see what we have lined up for our 7th week of the study!
Reminder: The methodology for this study was first outlined in our previous article.
Follow the progress of this study on Shrimpy.
Week 6 Results
The study has only been running for six weeks so far, but every week so far has been a shocker! While the first week showed a strong preference for Bitcoin, the Nomics ML strategy has taken the reigns and crowned itself king. The question remains: will it last?
#1 Bitcoin
Bitcoin struggled to perform throughout the last week. It only began to see some price movements towards the end of the week, so we might be able to see some fun price action next week.
After the sixth week of our study, Bitcoin has the second lowest performance of any strategy we are testing.
Final Bitcoin portfolio value: $1,126.87.
#2 Top 10 Index
Due to the mediocre performance of Bitcoin, it was expected that a portfolio based on a market-weighted index would also experience similar performance 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: $1,135.34.
#3 Coin Gecko
The Coin Gecko portfolio experienced bland performance results over the week.
The biggest winners selected by the Coin Gecko strategy include:
Ethereum (ETH): +6.11% Last 7 days
NEO (NEO): +4.02% Last 7 days
Bitcoin (BTC): +3.14% Last 7 days
There were no major losers selected by the Coin Gecko strategy. However, out of the 4 portfolios we are studying, Coin Gecko is performing the worst.
Final Coin Gecko portfolio value: $1,112.29.
#4 Nomics ML
The Nomics Machine Learning strategy has maintained a healthy lead against the competition. The projected profit from last week was +27.69% across all of the selected assets. With a final portfolio performance of +13.91%, the portfolio underperformed the projections, but still outperformed every other portfolio.
The biggest winners selected by the Nomics ML strategy include:
Aave (LEND): +77.68% Last 7 days
IOST (IOST): +27.82% Last 7 days
Ren (REN): +28.12% Last 7 days
Augur (REP): +18.92% Last 7 days
The biggest losers selected by the Nomics ML strategy include:
Verge (XVG): -17.61% Last 7 days
Horizen (ZEN): -7.76% Last 7 days
Siacoin (SC): -5.12% Last 7 days
Overall, this week saw a healthy selection of assets that all performed reasonably well.
Final Nomics ML portfolio value: $1,673.02.
Conclusions
The Nomics ML strategy has maintained a steady lead over the other strategies since the second week of this study. We cannot use this to predict future performance, but the results are promising.
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 a few weeks. As a result, we should take these results with a grain of salt. Non-the-less, it has been an interesting few weeks!
Week 7 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. Aave (LEND)
Projected 7-day profit: +91.4%
2. Chiliz (CHZ)
Projected 7-day profit: +44.91%
3. Augur (REP)
Projected 7-day profit: +17.6%
4. Siacoin (SC)
Projected 7-day profit: +16.77%
5. Ren (REN)
Projected 7-day profit: +14.14%
6. Kyber Network (KNC)
Projected 7-day profit: +13.27%
7. Golem (GNT)
Projected 7-day profit: +12.41%
8. Basic Attention Token (BAT)
Projected 7-day profit: +9.37%
9. BitShares (BTS)
Projected 7-day profit: +8.45%
10. Ontology (ONT)
Projected 7-day profit: +7.25%
Reminder: We are only including the assets that are available on Binance in this portfolio.
The average performance estimate is 23.56% 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. EOS (EOS) - Score: 72%
4. XRP (XRP) - Score: 71%
5. TRON (TRX) - Score: 70%
6. Bitcoin Cash (BCH) - Score: 70%
7. Stellar (XLM) - Score: 69%
8. NEO (NEO) - Score: 68%
9. Litecoin (LTC) - Score: 68%
10. Monero (XMR) - Score: 68%
Note: There were no changes to the portfolio from last 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 this week.
1. Bitcoin (BTC): 76.43% Allocation
2. Ethereum (ETH): 11.66% Allocation
3. XRP (XRP): 4.2% Allocation
4. Bitcoin Cash (BCH): 1.91% Allocation
5. Litecoin (LTC): 1.24% Allocation
6. Binance Coin (BNB): 1.1% Allocation
7. EOS (EOS): 1.03% Allocation
8. Cardano (ADA): 0.92% Allocation
9. Tezos (XTZ): 0.85% Allocation
10. Chainlink (LINK): 0.66% Allocation (NEW ASSET)
Note: The only new asset in the list is “Chainlink”, which is replacing “Stellar” from last week’s index. 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.
Follow Along with Shrimpy
Shrimpy is an account aggregating platform for cryptocurrency. It is designed for both professional and novice traders to come and learn about the growing crypto industry. Trade with ease, track your performance, and analyze the market. Shrimpy is the trusted platform for trading over $13B in digital assets.
Follow us on Twitter for updates!
Disclaimer
The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our Site constitutes a solicitation, recommendation, endorsement, or offer by Shrimpy or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
All Content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the Site constitutes professional and/or financial advice, nor does any information on the Site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content on the Site before making any decisions based on such information or other Content. In exchange for using the Site, you agree not to hold Shrimpy, its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other Content made available to you through the Site.