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Study Finds Cryptocurrency Rebalance Portfolios Outperform ‘Hodling’

July 15, 2018 |

Study Finds Cryptocurrency Rebalance Portfolios Outperform 'Hodling'

Shrimpy cryptocurrency portfolio management is a platform that helps investors curate a portfolio with automated investment strategies. With the company’s portfolio experience, the Shrimpy team published a study that gives an informative technical analysis comparing two types of cryptocurrency investment methods: rebalance against holding (hodl).

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space  

The Portfolio Firm Shrimpy Looks at the Best Method of Cryptocurrency Investment — Rebalance vs Hodl

If you have been into cryptocurrency for a while now you’ve probably heard the expression ‘hodl’ which is a purposely misspelled word for digital asset holders or hoarders who hold their coins for a long time without spending them. These type of people believe that someday their bitcoins will be worth far more than they are today. Even during the big market dips, ‘hodlers’ continue to hold. Another form of investment that some cryptocurrency proponents use is called ‘rebalancing’ which involves a portfolio rebalance only when the asset allocation has dropped below a predetermined threshold. Unlike holding and weathering bearish market action, rebalancing protects investors from being constantly exposed to market dips.

Study Finds Cryptocurrency Rebalance Portfolios Outperform 'Hodling'
Some cryptocurrency proponents believe that holding is the best method of investment.

  Rebalancing Beats Hodl by a Median of 64%

Shrimpy used a variety of data to help determine which investment strategy was more profitable such as a complete year of market data, the creation of a rebalance structure,  the number of assets in a portfolio, and asset selection. Further Shrimpy tested multiple portfolios with 2-10 assets each. Within the study, Shrimpy had found that rebalancing outshined hodling in a few instances.  

“There are two major relations we can draw from this study — The first relation is that increasing the number of assets increased the performance of a portfolio,” explains Shrimpy’s research. “The second relation is that decreasing the rebalance period (increasing rebalance frequency) increased the performance of a portfolio. Therefore, the ideal portfolio was rebalanced frequently and also contain numerous assets.”

Rebalancing beat Hodl by a median of 64%. After taxes, this represented 92% of all possible cryptocurrency portfolios.

Study Finds Cryptocurrency Rebalance Portfolios Outperform 'Hodling'
“Combining all of the backtests over all the portfolios and rebalancing periods produces a complete picture comparing rebalancing and hodl — We observe a median complete performance of 64%,” Shrimpy’s study states. 

Ten Asset Portfolio With a 1-Hour Rebalance Period Outperformed Hodl by 234%

Shrimpy’s experiment also compared portfolios that hold ten assets but have a different rebalance period, which showed some interesting statistics.

“If you randomly selected 10 assets and rebalanced at least once a month, you would have had a 99.75% chance of outperforming buy and hold over the last year — This is truly incredible,” details the research.  

The median performance for a portfolio with 10 assets and a rebalance period of 1 hour was 234% better than Hodl.

Study Finds Cryptocurrency Rebalance Portfolios Outperform 'Hodling'
“The median performance demonstrates that the higher the rebalance period with the higher number of assets presents the highest gains for rebalancing — Each value represents a percent increase over buy and hold,” explains Shrimpy. 

The Cryptocurrency Spend vs Hodl Debate is Years Old, But Is Being Argued Fervently Once Again

Study Finds Cryptocurrency Rebalance Portfolios Outperform 'Hodling' The study goes against the many people who believe hodling or hoarding is the best method of investment. For years there has been a long debate on which form usage is better for long-term cryptocurrency adoption, and lately, there’s been a new wave of people bolstering the idea of ‘spend and replace,’ most notably with the Bitcoin Cash (BCH) crowd. One wallet called Cashpay allows users to spend and replace their BCH every time they buy stuff with bitcoin cash. Holding can definitely bring people gains especially over long periods of time, but rebalancing seems to be less risky and more rewarding according to Shrimpy’s study.

What do you think the best method of investment is — rebalance or hodl? Let us know what you think about this subject in comment section below.


Images via Shutterstock, Pixabay, Medium, and charts designed by Shrimpy.


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The post Study Finds Cryptocurrency Rebalance Portfolios Outperform ‘Hodling’ appeared first on Bitcoin News.

Bitcoin News

USC cancer institute funded by Larry Ellison finds home in West L.A.

July 14, 2018 |

A pioneering cancer-research center funded by tech mogul Larry Ellison will launch next April in an office complex being built near a light-rail stop in West Los Angeles.

The Lawrence J. Ellison Institute for Transformative Medicine of USC on Exposition Boulevard near Bundy Drive will give USC’s…


L.A. Times – Business

Less Than Half of ICOs Survive Four Months After Sale, Study Finds

July 11, 2018 |

Less Than Half of ICOs Survive Four Months After Sale, Study Finds

New academic research has concluded that more than 50 percent of crypto projects raising capital through ICOs do not make it through to the fifth month after the token sale. The study also suggests that investors get the best return on their money if they sell the coins within the first month of trading, while the safest strategy would be to part with the tokens on the very first day.

Also read: Decentralized Exchanges – New and Hacked, and Some Lost Coins

Majority of ICOs Live Less Than 120 Days

Less Than Half of ICOs Survive Four Months After Sale, Study FindsDespite data from two recent studies suggesting that investors are still bullish on ICOs (Initial Coin Offerings), a research conducted by Boston College academics reveals that most crypto startups relying on crowdfunding have a pretty short lifespan. According to the authors – Hugo Benedetti, assistant professor at the Carroll School of Management and finance PhD student Leonard Kostovetsky – less than half of all new ICOs survive more than four months after launch.

The two researchers based their study on analysis of the Twitter accounts maintained by the projects, taking into account the intensity of tweets after the coin offering. They estimated that the survival rate of the startups, 120 days after the end of the sale, was only 44.2%. The assumption is that companies that are inactive on social media in the fifth month most probably did not survive. The report covers almost 2,400 ICOs completed before May this year, and examines over 1,000 Twitter accounts.

The survival rate has been calculated as an average figure for three categories of ICOs, Business Insider reports. The first group consists of projects that have not reported raising any money and are not listed on exchanges. Startups that reported raising capital but didn’t list fell in the second category. And the third includes the ICOs that list their coins on trading platforms. The statistics show the following survival rates – 17%, 48%, and 83% for these groups, respectively. The share of the projects that become inactive right after their token sales, or the potential scams, is about 11%.

Listing Increases Chances of Survival

Based on these findings, the study concludes that the sustainability of an ICO depends on whether the company behind it is able to list its coin on a crypto exchange. Investors who have supported a project during the coin offering enjoy greatest returns when the coin is listed. The researchers gathered data for over 4,000 ICOs, which raised $ 12 billion since January, 2017, and found that the projects generated an average return of 179%, accrued over an average holding period of 16 days from the last day of the ICO.

Less Than Half of ICOs Survive Four Months After Sale, Study FindsAccording to Kostovetsky, selling the acquired coins on the first day of trading is the safest investment strategy, when it comes to ICOs. In any case, investors should sell their holdings within six months, he added. “What we find is that once you go beyond three months, at most six months, they don’t outperform other cryptocurrencies,” Kostovetsky told Bloomberg. “The strongest return is actually in the first month,” he emphasized.

Benedetti and Kostovetsky explain the spike in the prices of many tokens after their listing with the underpricing during the ICO, as often they are sold to investors at significantly discounted prices compared to the open market rates. Despite that, the researchers also found that the returns are declining over time as companies have started analyzing prior sales by similar platforms to better determine the expected demand and the price of their coins.

What do you think about the short life of ICO projects? Let us know in the comments section below.


Images courtesy of Shutterstock.


Now live, Satoshi Pulse. A comprehensive, real-time listing of the cryptocurrency market. View prices, charts, transaction volumes, and more for the top 500 cryptocurrencies trading today.

The post Less Than Half of ICOs Survive Four Months After Sale, Study Finds appeared first on Bitcoin News.

Bitcoin News

Study of Uber drivers finds men earn more than women — for three key reasons

July 9, 2018 |

Men who drive for Uber earn about 7% more than female drivers earn, according to a recent working paper by the National Bureau of Economic Research that also cites three main causes for the gap in earnings.

Looking at data from more than a million Uber drivers, researchers found differences in…


L.A. Times – Business

After 6-Hour Search, Deputy Finds Baby in Woods

July 9, 2018 |

“This is what we call miracle,” reads a Facebook post from the Missoula County Sheriff’s Office in Montana. The reference is to a deputy who heard a faint cry in the woods and discovered a baby buried under sticks and debris, a happy end to a frantic six-hour search at…
Newser

Texas deputy finds ‘starving’ kittens in gym bag

July 8, 2018 |

A Texas deputy looking into a so-called “suspicious gym bag” found that it actually contained three kittens, the Houston Chronicle reports.
FOX News

Flight attendants call for action in response to study that finds the job comes with high cancer risk

June 30, 2018 |

A union representing the nation’s flight attendants has called for more health protections for its members, following a study that ties working as a flight attendant to an increased risk of developing breast and skin cancer.

The study, produced by researchers from Harvard University’s School of…


L.A. Times – Business

Here’s how Trump finds out if North Korea is serious about giving up its nukes

June 26, 2018 |

Can the Trump Administration avoid the mistakes and traps of the past when it comes to North Korea?
FOX News

Detained Migrant Teen Finds His Own Loophole

June 25, 2018 |

A teenager from Honduras being held in a high-profile immigration detention center in Texas may have just exposed a vulnerability in the system: The 15-year-old simply walked off the premises, and authorities there were powerless to stop him, reports the New York Times . The teen left the Case Padre migrant…
Newser

The Poor Flip, the Rich Hodl, Startup Finds Out Tracing Its Tokens

June 24, 2018 |

The Poor Flip, the Rich Hodl, Startup Finds Out Tracing Its Tokens

The team of a young Ukrainian crypto company has made an effort to collect some interesting data about what happened with their tokens after the sale. It turns out investors from developing countries are inclined to sell the coins within months after their listing, while buyers from developed nations tend to hold them longer.

Also read: No License Needed to Mine Cryptocurrencies in Ukraine

Ukrainian Startup Tracks Its Coins

What happens with your tokens after they are sold and listed on exchanges? That’s a question any decent ICO project should be interested in finding an answer to. Not all teams are so curious, once the coins are dumped on the market, but there are examples of the opposite.

The Poor Flip, the Rich Hodl, Startup Finds Out Tracing Its TokensREMME is a Ukrainian startup building an open source distributed Public Key Infrastructure protocol with a set of Dapps enabling passwordless authentication for users and devices. The company conducted its Initial Coin Offering (ICO) earlier this year and has already raised ~19,343 ETH.

During the first two days of the public sale in February only whitelisted candidates were allowed to participate, which helped in gathering the quoted statistics. Investors not registered on the Telegram community whitelist were allowed to join from day three of the offering.

Several months down the road, researchers at REMME have been able to come up with some interesting data regarding the fate of their tokens. Don’t sell to the Russians, is one of the conclusions that can be drawn from their numbers.

US, UK Investors Buy Long, Russians, Nigerians Sell Fast

One of the company’s founders, CEO Alexander Momot, has published on social media some of the tables. It turns out many buyers from developing countries like Brazil, Nigeria, Pakistan, Turkey, and the Philippines, are inclined to sell the acquired tokens within just four months of their listing. Countries like Russia and Ireland are also in the “flipping” group.

The Poor Flip, the Rich Hodl, Startup Finds Out Tracing Its Tokens

On the other hand, investors from developed nations such as the US, the UK, Australia, Hong Kong, Switzerland, and Sweden tend to keep the coins for much longer. The data puts Ukraine in the club of the rich hodlers, which is not surprising given that REMME is a Ukrainian company. Commenting on the findings, the startup’s chief executive said on Facebook:

Since we collected almost the entire amount from the whitelist, we can now monitor the general trends, for example, which countries’ residents are inclined to hold the tokens longer rather than sell them within 4 months after the listing.

Alexander Momot added that “we had all countries open and the country’s indication was mandatory, we can say that such statistics are relevant […] As you have noticed, [investors from] the more developed countries, in general, are more inclined to make long-term investments than [those from] the poorer states.”

The Poor Flip, the Rich Hodl, Startup Finds Out Tracing Its TokensDespite expectations that ICOs would lose steam this year, recently published data suggests it may be too early for that. Although the average sum raised by coin offerings has declined, the total sum of funds collected through ICOs in 2018 has already reached more than 82% of the estimated ~$ 6.1 billion raised in 2017, as news.Bitcoin.com reported. By the end of May, the mean total raised by almost 800 token sales conducted this year reached almost $ 6.5 million, compared to $ 7 million, the mean total raised by close to 900 ICOs last year.

Why do you think investors from developed countries tend to hodl, while those from developing nations prefer flipping? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock, REMME, Alex Momot (Facebook).


Now live, Satoshi Pulse. A comprehensive, real-time listing of the cryptocurrency market. View prices, charts, transaction volumes, and more for the top 500 cryptocurrencies trading today.

The post The Poor Flip, the Rich Hodl, Startup Finds Out Tracing Its Tokens appeared first on Bitcoin News.

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