This summer I started doing some analysis on trying to develop a rules based strategy for trading cryptocurrencies. My first simplistic approach was interesting, but when I compared it to a buy and hold strategy, the buy and hold was better. Not particularly surprising since I was using 2017 data and the market was pretty much increasing all year. I'm now interested in locking away some coins and wanted to know which ones might be a better buy and hold option.
I focused on 3 coins; BTC, ETH, and LTC. I wanted to know what type of returns each would have provided if purchased on a random day in 2017 and sold some time later. I wrote a program that started by purchasing each on the 1st day of the year, then selling on the 2nd, 3rd, and so on. I saved a record with each coin's growth rate and the best of the 3. Then I repeated starting with the 2nd, then selling on the 3rd, 4th, and so on. This resulted in 56,280 combination of dates.
Over these dates, BTC had the best return 26.4% of the combinations, ETH 52.2%, and LTC 21.5%. This surprised me so I looked at some detailed data. ETH price in January was particularly low. Previously I had limited my analysis to starting in mid-year when all seemed to take off. In this case. I decided to start each set at the beginning of the month and ending at the end of November. Following is the table of the reulsts.
Like all analysis the results aren't overly definitive, being subject the the span of data selected. Generally BTC outperformed the other two by quite a bit (until November when ETH and LTC took off). At the moment, my conclusion is to hold about 70% BTC, and 15% of each of the other two.
Anyone have any thoughts?
I focused on 3 coins; BTC, ETH, and LTC. I wanted to know what type of returns each would have provided if purchased on a random day in 2017 and sold some time later. I wrote a program that started by purchasing each on the 1st day of the year, then selling on the 2nd, 3rd, and so on. I saved a record with each coin's growth rate and the best of the 3. Then I repeated starting with the 2nd, then selling on the 3rd, 4th, and so on. This resulted in 56,280 combination of dates.
Over these dates, BTC had the best return 26.4% of the combinations, ETH 52.2%, and LTC 21.5%. This surprised me so I looked at some detailed data. ETH price in January was particularly low. Previously I had limited my analysis to starting in mid-year when all seemed to take off. In this case. I decided to start each set at the beginning of the month and ending at the end of November. Following is the table of the reulsts.
| BTC | ETH | LTC | |
| January | 26.4% | 52.2% | 21.5% |
| February | 30.6% | 43.7% | 25.7% |
| March | 37.3% | 31.8% | 30.8% |
| April | 46.6% | 32.3% | 21.2% |
| May | 59.6% | 19.4% | 21.0% |
| June | 71.8% | 5.9% | 22.3% |
| July | 79.4% | 7.4% | 13.2% |
| August | 75.0% | 7.9% | 17.1% |
| September | 81.5% | 10.9% | 7.7% |
| October | 72.6% | 13.1% | 14.3% |
| November | 25.0% | 32.0% | 43.0% |
Anyone have any thoughts?