A deep look at Ethereum's recent 50% drop. Analysis of two popular investment strategies against One Button Capital's innovative AI trading technology.
Crypto lost $1.4T from its market cap between Dec 3, 2021, and May 24, 2022, and Ethereum is not an exception. The second-largest cryptocurrency shredded in half with no signs of a rebound yet (according to analysts).
People that bought Ethereum before the crash and are still holding are down over -55.35% of their investment in just six months, while those who used a weekly dollar-cost-averaging (DCA) strategy are sitting at -31.99% of their total invested money during this period.
Today we will look at how a One Button Capital investment strategy took on the Ethereum challenge and executed over 70 live trades during the devastating bear run.
What is analyzed:
Looking at the results, we can see that the trading robot saved the investor from a -54.73% portfolio loss. What is fascinating is that the AI successfully bought at the dip several times before taking in the profit later when the asset increased in value.
The main feature that sets this strategy apart from the other software from OB Capital is the added V2 ratio for evaluation.
The metric accounts for the psychological impact of investment performances and over-penalizes investments for which the investors had to go through bad returns compared to the market.
That gives the Performer v2 trading strategy an edge in identifying when an asset is starting to depreciate compared to the overall market condition, proving to be a good risk-management tool.
The Performer v2 strategy has a solid track record in the ETH / USD Coin market pair with a 100% success rate in outperforming the asset when run for at least one week.
Even bots that were active for 9–10 days managed to save a couple of % losses during the downward market trend (even though at least three months are needed for proper analysis).
Again, the Performer v2 strategy dominated the market over the long run, and two investors even cashed out profits while Ethereum started decreasing.
One person who used a Kraken exchange is currently up by +7.67% from his original investment. The market during this time went down by -20.97%.
What is most intriguing is the trading robot that got activated on Dec 03, 2021 — at the same time as the bot from today’s case study.
The Performer v2 strategy outperformed the market again but did poorly compared to its USD Coin counterpart (-18.54% to be exact).
Takeaway: Diversification across trading strategies has been a key in the early tests of OB Capital’s software, but further tests within market pairs can produce even better results.
If you are a data-driven investor or someone wanting to explore the possibilities of automated crypto investing, you can subscribe to One Button Capital’s weekly newsletter.
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Other case studies:
The 66-Days Bitcoin Case Study
35 Case Studies Of AI vs Bitcoin
Can AI Outperform The Bear Market?
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Until next time,
Stay safe, and invest reasonably
This is not financial advice. This article is strictly educational and does not provide investment advice, solicit the purchase or sale of any assets, or encourage readers to make financial decisions. Please use caution and conduct independent research.
We regularly prepare insightful reports and case studies about crypto trading and the blockchain industry.
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