Is ETC the canary in the mine?

Well, after a couple of weeks where the models have just held on to all cryptocurrencies we have today our first sale. ETC was sold for USD at a rate of 6.458 after commissions; a gain of 140% from the purchase price of 2.69.

This is probably a good intro into discussing a few questions we’ve been fielding from  our backers of late – first, and most important, are these results realistic?  Well if the question is are these results real? then the answer is yes – we will be publishing the brokerage statements from Bitstamp and Poloniex shortly which is where all the trades have been executed to date. Is the performance what we expect over the time period – absolutely not. In many ways it would have been better if we had started our live funds trial at a more “normal” period as showing a 59% gain over a 6 week period without leverage is a complete outlier. We wait with anticipation to see how much of this profit the model keeps when we get a market setback.

Still, in terms of model behaviour, we are encouraged by the way the AI model has performed – even in a flat out bull run there is always the risk that the models would have tried to pick a top too early – instead they have held their positions seeing some spectacular gains over the 6 week period. The real stand-out now is Ripple, the last market for the model to buy. We are now seeing an astounding 448% gain on this market – remarkable even by cryptocurrency standards.

The other question is are we taking excessive risk? As discussed in the intro we are using zero leverage on these trades. That’s not to say we’re running a conservative portfolio – cryptocurrencies by their very nature exhibit extreme volatility but our strategy does not aim to increase that volatility any further.

The third question is selection of cryptocurrencies. Well we did do some pre-screening to ensure there was a relatively liquid market in each of the coins we allow the models to trade. We also wanted to ensure that the coins were tradable on at least 2 of the leading exchanges that we selected to trade on. Finally, we weighted the initial investment by the market capitalisation of the various coins we allow the models to trade in. This is a one off balancing of the capital; moving forward profits made by trading a particular coin will be re-invested in trading that same coin. This should see the portfolio change composition to a larger percentage being held in the more volatile currencies (providing that the trading is profitable).

So with those caveats and explanations what are the scores on the doors after liquidating our ETC position.

We are now showing a gain of 59.09% on the overall portfolio; our comparison strategy (buying and holding BTC) is showing a gain of 52.73% so we are now outperforming the naïve buy and hold strategy by 6.36%, even in a raging bull market. Best performer, as mentioned earlier, is Ripple, showing a gain of +458%, worst performer is Monero showing a gain of “just” 28.3%. Full results below.

CurrencyStarting BalanceUSDCryptoRateUSD EquivTOTALGain/loss
Ether Classic$203.00$487.3906.55$0.00$487.39140.09%
Hold BTC$16,900.00$0.0016.172248801596$25,810.91$25,810.9152.73%

— Wintermute —



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