The simple backtest for rebalancing a crypto portfolio

We all have beliefs that define a part of us. Some of these beliefs are simple things, like believing that a hot dog is a sandwich or the belief that cats are better than dogs. While both of these beliefs may be wrong, we have no quantitative way to define why they are wrong.

When we first started advocating for rebalancing, our belief was that rebalancing was better than HODLing. At the start, we didn’t have quantitative values we could point at to definitively say which was better, we just had this belief. Today, we can officially announce that rebalancing is better than HODLing and we have the data to prove it.

You can learn more about rebalancing from our other posts here:

Portfolio Rebalancing for Cryptocurrency_Portfolio rebalancing is a strategy that has been used by investors for decades. First, an investor must determine how…_medium.com

Rebalance vs. HODL: A Technical Analysis_The intention of this study is to paint a fair picture of how rebalancing as a strategy stacks up to HODLing. In order…_medium.com

We have collected data from a complete year of trades. These were all actual trades that were made on real exchanges. This means that the data is precise, so there are no estimations involved. We then organized all of this data to allow us to perform a simple backtest. A backtest is essentially a simulation over historical data to see how well a strategy would have performed during that time. The results were overwhelming. Rebalancing outperformed HODLing by a massive margin.

Give it a Try

We decided to not keep this tool to ourselves though, we wanted to share with everyone, so you too can experiment with different portfolios. This simple tool will allow you to select various coins and rebalance periods to analyze the performance of different portfolios over the last year.

Give the tool a try here: https://www.shrimpy.io/backtest

Now that you have witnessed the power of rebalancing, sign up for Shrimpy so you can take advantage of this essential strategy. The setup is easy and the maintenance is none. You’ll be saying, “I can’t believe it’s not HODLing.”

Don’t forget to check out the Shrimpy website, follow us on Twitter and Facebook for updates, and ask any questions to our amazing, active communities on Telegram & Discord.

Leave a comment to let us know your experiences with rebalancing!

The Shrimpy Team