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How Crypto Investors Are Using HodlBot to Automate Trading

It’s been almost an entire year since we launched HodlBot with the goal of “democratizing investing for everyday people”. Our MVP was a simple cryptocurrency index called the HODL20 that tracked the performance of the top 20 coins by market cap.

HODL 20 allocation on March 25, 2018

HODL20 Allocation back on March 25, 2018

We’ve moved past the HODL20 since then, and gave our users the ability to create their own cryptocurrency portfolios & indices.

HodlBot create your own cryptocurrency index

Create Your Own Cryptocurrency Index

In an attempt to look back on our progress, I wanted to share some of the interesting insights I’ve found out about how our users are using HodlBot.

Everything shared here is anonymized and reported on an aggregate level.

Passive vs. Active

The stereotypical cryptocurrency trader is an active trader, clamouring about TA, signals, whales and market timing.

But if you looked at the composition of our users, you’d see something much different. 88% of our users are indexing the market as opposed to active trading.

HodlBot passive vs. active users breakdown

We started HodlBot with a focus on indexing and passive trading and it’s great to see that reflect in our users. Having a strong core group of passive cryptocurrency investors is definitely one of the special things that make our community unique.

HODL Indices

HODL Indices

That’s not to say we don’t appreciate or support active traders. Active traders are important for the market (even when they are wrong). We have a lot of active traders who park their cryptocurrency nest egg in an index but will still experiment with a smaller portion of their overall portfolio.

Investor Age

The age of the average active HodlBot account is 182 days. The median age is 213 days.

Account age of HodlBot active users distribution

We had a very successful launch with HodlBot before the crypto bear market set in. That’s why the graph below shows two big humps of users by account age. It consists of users who have stuck with us since the very beginning, as well as users who joined us recently.

Portfolio Sizes

Portfolio sizes of HodlBot active users distribution

We make [HodlBot](https://www.hodlbot.io/?utm_source=blog&utm_medium=hodlblog&utm_campaign=how-investors-are-using-hodlbot) free for all users under $500.

For the most part, the portfolio size of our users follows a power law distribution. The median account size is $121. The average is $622, skewed by some very large portfolios on the right.

Total Asset Breakdown

Breakdown of HodlBot users' assets by %

Top 20 most popular assets

Since the majority of our users are indexing the market, the asset breakdown looks similar to what you’d expect in the top 20 by market cap.

Custom Portfolio Users

Breakdown of HodlBot users' custom portfolio assets by %

But once we stray away from indices and into the domain of active traders, this breakdown gets far more interesting. LTC is the highest allocated coin by a wide margin.

Blacklist

HodlBot user's blacklist breakdown by %

If you really don’t like a coin, you can blacklist from the index. HodlBot will replace the coin with the next highest ranking coin by market cap.

A lot of our users blacklist stable coins because by definition they are stable and don’t move along with the market. If the goal is to index the cryptocurrency market, then stable coins don’t offer a lot of help.

Another interesting pattern we see is when a project forks, users will back one main fork rather than diversifying across them all. E.g. Bitcoin investors will often blacklist Bitcoin Cash, Bitcoin Gold, Bitcoin Diamond etc.

Rebalancing Period

HodlBot user's rebalancing period breakdown by %

The majority of our users have their rebalancing date set to the default 28 days. Other popular periods are, daily, weekly, bi-weekly.

Most of the 30+ days are comprised of cheeky who have set their rebalancing dates to 10,000+ days, indicating that they basically never want to be rebalanced.

The optimal rebalancing period has been a hotly contested topic. After digging for secondary sources, and completing my own research, I found that rebalancing frequency is not a predictive indicator of performance. Anything between 7–90 days is reasonable.

Join Our Community

Thanks for tuning in. I hope you enjoyed reading the article and learning more about how cryptocurrency investors are using HodlBot to automate their trading strategies.

Just a reminder that HodlBot is free for users under $500. To get started all you need is a

  1. Binance Account
  2. $200 in any cryptocurrency

If you want to join our community of long-term cryptocurrency investors and talk about passive indexing or active trading. You can join this 500+ group of Telegram users.

We’re going to be continuing to work on HodlBot in 2019, to release more interesting trading features for both passive & active investors.

Stay tuned!


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