Machine Learning for Crypto Portfolio Management Case Study: Week 2

This was the second week of our case study that will evaluate the application of machine learning for portfolio management. The methodology for this study was first outlined in our previous article.

Each week, we will publish an update to highlight interesting events that took place over the last week, break down the performance metrics from the last week, and provide any changes that will be made to each portfolio.

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While BTC ranges sideways and slightly downward, the market has generally done the same. Nomics ML has a solid but not insurmountable lead, followed by the Smart Contracts Index. Shrimpy ML and the DeFi Index are both in a close 3rd and 4th respectively.

Shrimpy ML Strategy

The Shrimpy ML Strategy leverages the 7-day price predictions generated by the Shrimpy 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.

This week was rough for Shrimpy’s Machine Learning models as predictions were vastly over-bullish across the board. This week only 2 of the 10 predictions resulted in a positive performance with the largest at roughly +10%.

This week was rough for Shrimpy’s Machine Learning models as predictions were vastly over-bullish across the board. This week only 2 of the 10 predictions resulted in a positive performance with the largest at roughly +10%.

Portfolio Allocations

Each of the following assets were allocated exactly 10% of the total portfolio value for the second week of this study.

  1. ARCS (ARX): Projected 7-day profit: +301.98%

  2. LOCGame (LOCG): Projected 7-day profit: +194.67%

  3. VideoCoin (VID): Projected 7-day profit: +108.23%

  4. Terra (LUNA): Projected 7-day profit: +79.37%

  5. WAX (WAX): Projected 7-day profit: +71.77%

  6. BNS Token (BNS): Projected 7-day profit: +67.94%

  7. Energy Web Token (EWT): Projected 7-day profit: +53.28%

  8. Avalanche (AVAX): Projected 7-day profit: +45.95%

  9. Bolt (BOLT): Projected 7-day profit: +39.81%

  10. Render Token (RNDR): Projected 7-day profit: +38.25%

The average projected 7-day profit is +100.12%.

Each of the following assets were allocated exactly 10% of the total portfolio value for the third week of this study.

  1. Labs Group (LABS): Projected 7-day profit: +168.08%

  2. Telos (TLOS): Projected 7-day profit: +130.41%

  3. Chain Guardians: Projected 7-day profit: +124.12%

  4. Avalanche (AVAX): Projected 7-day profit: +86.13%

  5. Verasity (VRA): Projected 7-day profit: +78.93%

  6. Arcs (ARX): Projected 7-day profit: +53.59%

  7. Loopring (LRC): Projected 7-day profit: +53.46%

  8. WOM Protocol (WOM): Projected 7-day profit: +52.11%

  9. Suku (SUKU): Projected 7-day profit: +42.78%

  10. DigitalBits (XDB): Projected 7-day profit: +30.23%

The average projected 7-day profit is +81.98%.

Portfolio Starting Value

The Shrimpy ML Strategy was allocated exactly 1,000 USDT at the start of this study.

Try the Shrimpy ML Forecasts

Disclaimer: Shrimpy’s price forecasts are for entertainment purposes only.

Disclaimer: Shrimpy’s price forecasts are for entertainment purposes only.

Shrimpy offers machine learning price forecasts for all customers. These forecasts are generated using our own Machine Learning models, and price forecasts are updated every day (00:00 UTC) using the last 90 days of daily close prices. Viewing these forecasts is possible by visiting our trading terminal at shrimpy.io.

Sign up for Shrimpy to try them out by clicking here.

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.

Nomics was the only portfolio capable of producing a positive performance for this week and while the numbers aren’t exactly impressive - maintaining positive momentum is extremely important. It will be interesting to see if Nomics is able to expand upon the lead they’ve established with their predictions as this study advances.

Nomics was the only portfolio capable of producing a positive performance for this week and while the numbers aren’t exactly impressive - maintaining positive momentum is extremely important. It will be interesting to see if Nomics is able to expand upon the lead they’ve established with their predictions as this study advances.

Portfolio Allocations

Each of the following assets were allocated exactly 10% of the total portfolio value for the second week of this study.

  1. Bitcoin Cash ABC (BCHA): Projected 7-day profit: +71.43%

  2. Kusama (KSM): Projected 7-day profit: +61.06%

  3. Fantom (FTM): Projected 7-day profit: +60.15%

  4. NEAR Protocol (NEAR): Projected 7-day profit: +58.54%

  5. Terra (LUNA): Projected 7-day profit: +53.66%

  6. Cosmos (ATOM): Projected 7-day profit: +36.93%

  7. Solana (SOL): Projected 7-day profit: +35.88%

  8. XinFin Network (XDC): Projected 7-day profit: +29.18%

  9. Cardano (ADA): Projected 7-day profit: +25.27%

  10. Avalanche (AVAX): Projected 7-day profit: +24.43%

The average projected 7-day profit is +45.65%.

Each of the following assets were allocated exactly 10% of the total portfolio value for the third week of this study.

  1. Celo (CELO): Projected 7-day profit: +244.32%

  2. Tezos (XTZ): Projected 7-day profit: +42.93%

  3. Solana (SOL): Projected 7-day profit: +37.48%

  4. Terra (LUNA): Projected 7-day profit: +16.75%

  5. Decentraland (MANA): Projected 7-day profit: +15.90%

  6. Binance Coin (BNB): Projected 7-day profit: +6.59%

  7. NEO (NEO): Projected 7-day profit: +5%

  8. Cosmos (ATOM): Projected 7-day profit: +4.73%

  9. Stacks (STX): Projected 7-day profit: +4.32%

  10. Fantom (FTM): Projected 7-day profit: +4.20%

The average projected 7-day profit is +38.22%.

Portfolio Starting Value

The Nomics ML Strategy was allocated exactly 1,000 USDT at the start of this study.

Decentralized Finance Index Strategy

The Coin Market Cap DeFi Index Strategy uses the asset market caps combined with the Decentralized Finance asset tag 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.

Much of the assets contained within our DeFi Index have lost steam while BTC trends sideways, and this is evident in the performance this week.

Much of the assets contained within our DeFi Index have lost steam while BTC trends sideways, and this is evident in the performance this week.

Portfolio Allocations

  1. Uniswap (UNI): 22.15% Allocation (adjusted from 22.25%)

  2. Terra (LUNA): 18.11% Allocation (adjusted from 16.84%)

  3. Chainlink (LINK): 15.18% Allocation (adjusted from 16.11%)

  4. Avalanche (AVAX): 9.92% Allocation (adjusted from 10.33%)

  5. Pancake Swap (CAKE): 6.75% Allocation (adjusted from 6.81%)

  6. AAVE (AAVE): 6.34% Allocation (adjusted from 6.66%)

  7. The Graph (GRT): 6.11% Allocation (adjusted from 6%)

  8. Sushiswap (SUSHI): 5.44% Allocation (adjusted from 5%)

  9. Compound (COMP): 5% Allocation

  10. Maker (MKR): 5% Allocation

Portfolio Starting Value

The DeFi Index Strategy was allocated exactly 1,000 USDT at the start of this study.

Smart Contracts Index Strategy

The Coin Market Cap Smart Contracts Index Strategy uses the asset market caps combined with the Smart Contracts asset tag 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.

While marginally better than both the Shrimpy ML and Defi Index portfolios, the Smart Contracts index is just as correlated to BTC and experienced roughly the same level of drawback this week. Due to a solid performance last week, SC Index is in great shape going into week 3.

While marginally better than both the Shrimpy ML and Defi Index portfolios, the Smart Contracts index is just as correlated to BTC and experienced roughly the same level of drawback this week. Due to a solid performance last week, SC Index is in great shape going into week 3.

Portfolio Allocations

  1. Ethereum (ETH): 25.01% Allocation

  2. Cardano (ADA): 25% Allocation

  3. Chainlink (LINK): 9.36% Allocation (adjusted from 9.53%)

  4. Stellar (XLM): 6.69% Allocation (adjusted from 6.62%)

  5. Ethereum Classic (ETC): 6.52% Allocation (adjusted from 6.55%)

  6. VeChain (VET): 6.31% Allocation (adjusted from 6.27%)

  7. Avalanche (AVAX): 6.11% Allocation (adjusted from 6.02%)

  8. Algorand (ALGO): 5% Allocation

  9. NEO (NEO): 5% Allocation

  10. EOS (EOS): 5% Allocation

Portfolio Starting Value

The Smart Contracts Index Strategy was allocated exactly 1,000 USDT at the start of this study.

Conclusions

After 2 weeks, we’re able to see what may be the early signs of a separation in performance between the 4 portfolios. While they are all still performing positively, a gap is beginning to form with Nomics in the lead, followed closely by the Smart Contracts Index. Due to the market being relatively quiet (minus a few exceptions primarily in assets containing the “Platform” tag), there were very few (in some cases 0) rebalances this week between the 4 portfolios which can be taken as an indication that 3 of the 4 portfolios have an extremely high correlation with BTC.

We recommend you check back every week to see how the results are progressing! To keep up to date with the latest articles, you can also join our Discord Group or follow us on Twitter.

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InvestorMichael McCartydata, machinelearning, notlatest, topsectionComment