Crypto Performers Overview Archives - 2100NEWS

BrankoJuly 19, 2021
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15min492


Copying a manager’s allocations provides a simple way for the average person to not worry about the complexities of digital assets portfolio management strategies. Copying allocations is the most potent social portfolio management strategy tool for new investors. It provides a simple way to start learning about portfolio management strategies of cryptocurrencies, engage with leading managers in the industry, and execute advanced digital assets management strategies. Among the available social crypto portfolio management strategies, copying allocations is far above and beyond the best option for crypto investors. Copying allocations from a manager means you are entrusting your funds to that manager. Without a step-by-step breakdown of the strategy they are implementing, copiers will need to trust the manager to have a professional methodology for crypto portfolio management. Although copy allocations can sometimes feel like a black box, extensive historical performance data, detailed trade history, and portfolio stats can help mitigate the present concerns. In this paper, we have shown that there are tools for measuring skills and Statistical techniques to detect whether skill drives the superior performance of some crypto portfolio strategies.  Table 1 below shows Iconomi rankings on the landing page; that rankings of crypto strategy performance provide almost no information regarding management skills.  The top ten in 24 hours is almost random and shows only one crypto strategy managed by a skilled manager. Potential investors are better advised to consider the data in this article than to rely on such rankings.

Table 1 – Iconomi rankings on the first page

We have vast experience across the banking and finance sector, and we’ve been in the crypto space for years and gauged portfolio management strategies of cryptocurrencies. With so many cryptocurrency portfolio management strategies on the market – how did we select the ones for this study? Unlike other “best lists,” – we didn’t get paid to write this. We did the research, cut through the noise, and put together the very best options. We hope this post helped you understand some of the best options depending on your needs.

Copying allocations is the most advanced form of copying manager.

Instead of evaluating a strategy, copying allocations can evaluate the actual assets held on the exchange by a manager. As the manager executes trades, these trades can instantly be sent to any copiers to accomplish the same trades. With copy allocations, it doesn’t matter how the manager got to their positions. The focus is placed on the results rather than the strategy. That way, the copier is separated from the strategy implementation and simply needs to worry about the manager they are copying.

  • At every step of the way, copiers will maintain the same portfolio as the managers – effectively copying their performance. Additionally, managers can change their strategies at any time. Copiers don’t need to download new strategies or pay for updates.
  • By copying allocations, managers can keep their strategies proprietary. They never need to disclose how they trade or what factored into their decisions. The trades will be automatically copied to copiers regardless of how they made the decision.
  • Copying allocations requires managers to have funds on the exchange. Since copiers will be copying the currently allocated assets, managers become forced to have skin in the game. Instead of using second-rate strategies, the leader must use their best strategy. Otherwise, the manager’s own funds won’t perform optimally.

Superior performance must be repeatable to be claimed as a skillset

Contribution lies in delineating the significant debates, given the overall complexity of differentiating skill from luck. The aspiration to identify the nature of the skill involved in achieving extraordinary returns with a crypto portfolio management strategy remains.
Successful investing, like most activities in life, is based on a combination of skill and serendipity. Distinguishing between the two is critical for forward-looking decision-making because skill is relatively permanent while serendipity, or luck, by definition, is not. A crypto portfolio manager who is skillful this year presumably will be skillful next year. A crypto portfolio manager who was lucky this year is no more likely to be lucky next year than any other manager. In other words, above-average performance is evidence of both good luck and superior skill. However, whereas the skill element is permanent, the luck element is transitory. Therefore, the expected performance next period reverts back toward the mean because the luck variable has an expected value of zero.

We may simply identify the crypto strategies of skilled managers. In the analysis, we suppose that they were in the top 25% of all strategies for one year, two consecutive half-years, and four consecutive quarters. One rather intuitive approach follows. Recall that the motivating factor is that such managers “won” as a result of skill and that skills remain for a period of time. In sports, team owners and sports fans rely on the persistence of skill. By analogy and as shown by the analysis herein, the same holds for crypto managers’ performance.
Results demonstrate that crypto portfolio management strategies that consistently outperform do so as a result of skill. One remaining question is whether it is possible to translate this knowledge into a winning strategy for investing in crypto strategies. Many such strategies may exist.

Table 1 – Top 10 strategies by net return managed by skilled managers

Investors seek positive risk-adjusted returns that also account for all transaction costs and/or management fees.

While acknowledging the importance of measuring risk, asset allocation and diversification are fundamental risk management concepts for thousands of years. They are also one of the core concepts behind modern portfolio management strategies. Fundamental finance principles, along with common sense, dictate that investors account for both risks and return, yielding some measure of positive risk-adjusted returns that also account for all transaction costs and/or management fees. About performance fee cost and gross-net returns, you can read in this article. In other words, investors seek positive alphas (a’s), i.e., risk and cost–adjusted positive returns. Alpha is a term used in investing to describe an investment strategy’s ability to beat the market or its “edge.”  We can see in table 1 that all crypto strategies managed by skilled managers have a positive alpha. It men’s that managers deliver excess returns.

Statistical technique to detect whether skill drives the superior performance of some crypto portfolio strategies.

For example, while the probability that a person flips a coin and ends up with ten heads in a row is less than one in a thousand (1/1032 = 0.098%), such strings of luck do occur, and when they do, it does not skill on the part of the person flipping the coin. Some of the hundreds of crypto portfolio management strategies may end up the “winners” for prolonged periods of time. Naturally, investors need to know whether streaks of superior performance are due to skill. The analysis herein demonstrates that such streaks exist within the family of digital assets management strategies and are due to skill, not luck.
Competition alone in sports dictates that not all professional teams can win; the most highly skilled teams appear to win more often.

The simple model provides a useful, practical tool for assessing the impact of skill and luck on portfolio performance. This technique, the generalized binomial distribution, models a sequence of n Bernoulli events in which the result of each event is either success or failure (i.e., successive quarters during which strategy outperform or do not outperform 75% of all strategies). We gauged Beta, Alpha, Sharp. Beta measures the relative volatility of an investment. It is an indication of its relative risk. Alpha and beta are standard calculations used to evaluate an investment portfolio’s returns, along with standard deviation and the Sharpe ratio.

When the model is applied to a sample of Iconomi crypto strategies managers (history from 7/1/2020 to 6/30/2021 and ACS over 100 thousand $), the results indicate the most of the annual variation in performance is due to luck, not skill (Table 2). Nonetheless, the model provides another way of analyzing performance data. The analysis also supports the view that rankings of crypto strategy performance provide almost no information regarding management skills. Potential investors are better advised to consider the data in this article than to rely on such rankings.

We have covered each of the strategies, and we can display the results in simple grids. That way, we can directly compare some strategies we examined.

 

Table 2 – 10 assets coping strategies managed by lucky managers

We can see in table 2 that all crypto strategies managed by lucky managers have a random alpha. It means that some of these managers are lucky, the others are unlucky, but they are not skilled. We noticed that half of the portfolios were not well diversified. With the same technique, we also detect unskilled managers (Table 3). Each of them delivered negative alpha. With their work, they were destroying the return they could get.

Table 3 – Bottom 10 strategies by net return managed by unskilled managers

Should individuals include actively managed crypto strategies in their investment portfolios?

They should if and only if the result of active management is superior performance due to skill. This paper employs a previously ignored statistical technique to detect whether skill drives the superior performance of some crypto portfolio strategies.
In contrast to a large degree of extant evidence, the approach demonstrates that skilled crypto strategy managers exist – persistence in superior performance cannot be attributed to luck. Results display a statistically significant proportion of crypto strategies. However, small in number (10%), they outperform their peers on a risk-adjusted basis and do so due to skill, not luck (Table 1).

We gauged Crypto Strategies, which were actively managed with the limit represented by passively managed index strategies (2100News Ethereum Tokens Index and Blockchain index). Above the limit were a few strategies. A good deal of prior evidence indicates that most actively managed crypto strategies fail to outperform these two passively managed index strategies.
This result signifies the rationality of entrusting one’s wealth to successful and skillfully managed cryptocurrency portfolio management strategies. Hence, a well–designed portfolio that includes actively managed crypto strategies may trump a wholly passive index strategy.

We hope this gives you a better understanding of what to look for when picking a Crypto Strategy to follow for your investment.

 


BrankoJune 28, 2021
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7min355


How to choose which Crypto Strategy to follow?

There are graphs and a lot of numbers on the platform with many Crypto Strategies. If you don’t know what to look for, it’s easy to feel overwhelmed. The most important things to consider are the same things that people look for in traditional finance Net Returns and Risk. Any endeavor of investing over the long term needs an ability to analyze performance and draw the right conclusions. The obvious questions that need to be addressed. The result—how well did your investment decisions fare? The result can be described in a few different ways. First, how much money did you gain or lose? Second, as a percentage of the amount invested, or absolute return. Third, as a percentage after adjusting for time invested. This measure is usually called annualized return. Fourth, as a comparison to a benchmark.

Gross – Net Returns

Returns are important since they show you the past performance of a Crypto Strategy. Although past performance is not a guarantee for future performance, this can be a useful indicator since it can give you a good idea of a strategy’s performance compared to other ones. Iconomi shows gross returns on strategies. Table 1 below shows the top five strategies and benchmark index by gross return. It is important to know that investors do not get these returns.

Table 1 – Top 5 strategies by gross return

Table 2 shows the Top 5 strategies by assets copying.

Table 2 – Top 5 assets copying strategies

Strategies charge various management fees, performance fees that appear to reduce the total or net return to investors. Otherwise, the logic is not simple; the greater the gross return, the better! For instance, You selected the strategy you had wanted to follow, remain vigilant, and monitor your portfolio closely. After one year, you noticed that return of your portfolio is much lower than the readings of returns on Iconomi for the strategy you follow.

Net strategy returns

Only net returns are important for followers because net returns increase their wealth. The publication of gross return is just a marketing show of managers to attract followers. Gross returns often mislead to wrong decisions. It is possible that the fruits do not show up more generally in net strategy returns because they are absorbed by expenses. The tests for net strategy returns ask whether active managers have sufficient skill to cover all their costs. Specifically, whether managers have enough skill to cover the costs of performance fees missing from expense ratios. Last but not least, make sure to check the fee structure of the strategy, so you will know how much you will be paying the Manager for their work. When it comes to the fees, let us also point out the “Performance fee.”

Fee structure – Performance fee costs

In other words, we examined strategy-by-strategy performance to determine performance fee costs, which investors must consider. The range of outcomes is wider than expected. According to the performance fee structure, some strategies charge monthly, some charge weekly, and the rest of the strategies do not charge a performance fee.

The table above shows 13 crypto strategies on the Iconomi platform, their Performance Fee structures, Performance fee costs in one year, gross return, and investors’ crucial factor, Net Returns. Investors must understand:

  • Since the platform itself does not publish net returns, we had to calculate them from the data we obtained through the API
  • Performance fee significantly changes the order of performance of strategies (the second most successful strategy in terms of gross return (1352%) is significantly worse for the investor and is in fifth place, as it has only 742% net return.
  • Weekly or monthly fee has the compound effect, which causes that investor Performance costs are much higher than expected. For instance (FutureProof), Investors might think they would pay 20%, but the costs at the end of the year were 42.03%.
We hope this gives you a better understanding of what to look for when picking a Crypto Strategy to follow for your investment.

 


UrbanDecember 17, 2018

17min693

In December 2017, the market participants were eagerly waiting for the total crypto market capitalization to touch $1 trillion. Fast forward to December 2018, and the total market capitalization is struggling to hold on to the $100 billion mark.

This shows the complete change in sentiment in the past one year: last year, it was fear of missing out and this year it is fear of losing all the money invested in cryptocurrencies.

During extremes of the bull or the bear phase, the markets overshoot and undershoot the technical targets by a large margin. We believe that the decline has reached a panic state, which will end with a bottom formation, sooner than later.

Therefore, investors who believe in the long-term potential of the asset class should be ready to invest once the decline ends. The downside risk from the current levels is limited while the upside potential is attractive.

EOS/USD

EOS (EOS) block producers are operating in negative margins and many will land up in trouble if the price does not recover or if no change is made to the existing reward system.

Hackers are also having a field day with the decentralized apps (DApps) that are based on the EOS blockchain. Their hacks have resulted in a loss of about $1 million since July.

Charles Hoskinson of Cardano believes that the United States Securities and Exchange Commission (SEC) is likely to train its guns against the $4 billion initial coin offering (ICO) of EOS. So, how does the future look according to the charts? Let’s find out.

EOS/USD

The major trend on the EOS/USD pair is down. The price has been making new year-to-date lows since the breaking down of $4.493.

The bulls had attempted to form a base from mid-August to mid-November, which failed. The pattern target of that break was $2.1561. However, the bears easily broke through this level and plunged the digital currency to a low of $1.55. Even at these levels, there is no urgency among the buyers to step in and provide support.

This suggests that the decline can extend to the next support at $1.2 and below it to $1, which is a major psychological support. The RSI is close to the oversold territory, which shows that the selling has been overdone.

A pullback to the breakdown level is likely, which in this case is the $3.8723–$4.493 zone. However, traders should initiate long positions only after the virtual currency signals a trend reversal. Until then, it is best to remain on the sidelines.

BNB/USD

Binance, one of the top crypto exchanges in the world by trade volume, has launched educationalcontent to provide “unbiased” information about crypto and blockchain to the public. The development of the content is being undertaken by Binance Academy, which is the dedicated education arm of the exchange.

Another arm, Binance Labs, has released its first batch of blockchain projects from its incubation program, which provided the projects with funding and other necessary resources. The exchange has added six new pairs, with Circle’s USD-pegged stablecoin USD Coin recently being included in its Combined Stablecoin Market.

BNB/USD

The Binance Coin (BNB/USD) pair is relatively strong, as it has not given up much ground since the breaking down of the year-to-date low of $5.4666, formed on Feb. 6. It is currently falling inside a descending channel.

If the bears break below the immediate support of $4.1723848, the decline can reach the support line of the channel at $2.5.

Though the trend is down and it is advantage bears, the RSI is in the oversold territory, hence, we can expect the bulls to attempt to climb back above the overhead resistance at $5.4666. If successful, the current dip can be termed as a bear trap and the pullback can extend to the resistance line of the channel, just above $7.5. Traders should attempt a trade only after a reliable buy setup is formed.

TRX/USD

TRON (TRX) launched its TRC20 exchange this week. With the exchange going live, it is expected that the liquidity of the TRON network will increase. The 24-hour transaction amount for DApps increased 48 percent compared to the previous week. Similarly, the 24-hour trading volume increased 151 percent over the last week. With these developments, how does the chart pattern look? Is a bottom in sight?

TRX/USD

The bulls have been attempting to put a bottom in place for the past few months. The TRX/USDpair consolidated between $0.0183 and $0.0281551 for about three months, before breaking down on Nov. 19. An attempt to climb back into the range failed and the bears are attempting to extend the downtrend. The breakdown gives it a pattern target of $0.00844479. If the decline doesn’t stall at this level, then the next support is at $0.00554133.

However, if the bulls defend $0.01089965 and push the price back above $0.0183, the digital currency will indicate a probable trend change. Until then, every pullback will be met with a wave of selling, hence, it is better to wait and watch.

LTC/USD

The Litecoin (LTC) Lightning Network is ready for launch on one of the largest payment gateways, CoinGate. The creator of Litecoin, Charlie Lee, cheered the news in a recent tweet, “Even Litecoin will soon have more than 1000 merchants accepting LN payments!  Thanks @CoinGatecom!”

Lee had sold all of his Litecoin in December 2017, citing a conflict of interest. He had then indirectly indicated that the price of Litecoin could plunge to $20. With the price declining close to his prediction, will it find a bottom at these levels or will it continue to slump? Let’s find out.

LTC/USD

The LTC/USD pair has been in a strong downtrend since peaking out at $370 in December of last year. Though there was an attempt to form a base at $47.246, the bears broke down on Nov. 13 and resumed the downtrend. There was another attempt to defend the support at $29.349, but it did not hold even for a week.

Currently, the downtrend has resumed and the next support on the downside is the $19–$21 zone. If this also fails to hold, the fall can extend to $15. The RSI has reached oversold levels, last seen in the beginning of 2015.

If the digital currency rebounds from current levels and climbs above $29.349, it will indicate that the markets have rejected lower levels. In such a case, a pullback to $47.246 is probable. However, as the bears have an upper hand, the traders should wait for the trend to reverse before attempting a long position in it.

BTC/USD

Some believe that after the crushing bear market Bitcoin (BTC) will meet its end. However, Jeremy Allaire, co-founder of Circle, believes that Bitcoin will be worth “a great deal more” than it is now in the next three years.

Co-founder of Fundstrat Global Advisors, Thomas Lee, believes that the fair value of Bitcoin is between $13,800 and $14,800, a good 315 percent higher than the current levels. During bear markets, prices can drop to crazy levels, which turns out to be a good buying opportunity for the brave hearted who can go against the trend.

BTC/USD

The trend in the BTC/USD pair is clearly down. Since breaking down of the critical $5,900 support, the bulls haven’t been able to defend any intermediate support levels, which shows that the bears are in command.

The selling has pushed the RSI into the oversold territory, a level last seen in the beginning of 2015. The immediate support is at $2,974, from where we anticipate a strong bounce.

Conversely, if the virtual currency fails to recover, the downtrend can extend to $1,752. With every fall, the pair gets closer to the bottom, but it is difficult to predict where the decline will end.

As the slide has been sharp, the next pullback is likely to be equally sharp. Therefore, traders can expect a retest of the breakdown level of $5,900 once the trend reverses. Until then, the short traders will pounce on every small pullback.



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