Shrimpy cryptocurrency portfolio management is a platform that helps investors curate a portfolio with automated investment strategies. With the company’s portfolio experience, the Shrimpy team published a study that gives an informative technical analysis comparing two types of cryptocurrency investment methods: rebalance against holding (hodl).
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The Portfolio Firm Shrimpy Looks at the Best Method of Cryptocurrency Investment — Rebalance vs Hodl
If you have been into cryptocurrency for a while now you’ve probably heard the expression ‘hodl’ which is a purposely misspelled word for digital asset holders or hoarders who hold their coins for a long time without spending them. These type of people believe that someday their bitcoins will be worth far more than they are today. Even during the big market dips, ‘hodlers’ continue to hold. Another form of investment that some cryptocurrency proponents use is called ‘rebalancing’ which involves a portfolio rebalance only when the asset allocation has dropped below a predetermined threshold. Unlike holding and weathering bearish market action, rebalancing protects investors from being constantly exposed to market dips.
Some cryptocurrency proponents believe that holding is the best method of investment.
Rebalancing Beats Hodl by a Median of 64%
Shrimpy used a variety of data to help determine which investment strategy was more profitable such as a complete year of market data, the creation of a rebalance structure, the number of assets in a portfolio, and asset selection. Further Shrimpy tested multiple portfolios with 2-10 assets each. Within the study, Shrimpy had found that rebalancing outshined hodling in a few instances.
“There are two major relations we can draw from this study — The first relation is that
