At HodlBot, we’re building tools to make cryptocurrency investing easy for everyday investors.
While we’ve focused on building indices in the past, we understand that some investors want to pick their own winners. That’s why we’ve decided to launch our new and improved create your own portfolio feature.
Here’s how it works.
Pick Your Coins
First, select what coins you would like to include in your portfolio.
You can do this by simply looking up a coin by its symbol or name.
This list contains all 465 coins that are available on the Binance exchange. You can sort these coins by symbol, name, market capitalization, or 24H price change.
Click the + sign to add all the coins you would like to include. Once a coin is included, it will be highlighted in purple.
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Select a Weighting Strategy
Once you’ve selected what coins you want to be included in your portfolio, it’s time to decide how to weigh them.
There are 3 weighting strategies to choose from:
- Fixed — assigns a constant weighting e.g.
- Market Cap — Assigns each coin a dynamic weighting based on its market capitalization
- Square Root Market Cap — Assigns each coin a dynamic weighting based on its square root market capitalization
After a weighting strategy is selected, you can choose to modify the weighting any individual coin.
In this portfolio, BTC’s weighting is 9x more than ETH.
The same could be achieved by giving BTC a weighting of 90, and ETH, 10.
Under market cap or square root market cap weightings, the ratios work in a similar manner.
Setting BNB to 7, and every other coin to 1, means we will allocate weighting to BNB as if its market cap was 7x larger than it is.
Our custom portfolio, weighted by market cap.
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BNB’s market cap is 7x.
3. Historical Backtest
You don’t want to jump into your strategy blind. So after you’re done creating your portfolio, it’s time to run a backtest against historical data to see how your strategy would have performed in the past.
Fees and rebalances are taken into consideration for the backtest.
For simplicity’s sake, we’ve scaled the backtest to start with a value of $1.
Play around with your portfolio and the backtest until you’re happy with the results.
4. Save and Execute
If you’re happy with the results, you can save your portfolio and execute it right away.
As long as you an active HodlBot account, the trades required to build your portfolio will be automatically executed.
Once you save your portfolio, you’ll see it show up on the portfolios page.
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Set your Own Rebalancing Period
When prices change, the allocations in your portfolio will shift out of place. A rebalance performs the buys & sells to get it back to the original allocation.
The default rebalancing period for HodlBot is 28 days.
But you can customize to be whatever you like.
Some investors believe that more frequent rebalances are always better. Our research shows otherwise.
On an after-fee basis, we believe anything between 7–90 days is appropriate.
About the Author
Written by Anthony Xie
I’m the founder of HodlBot.
I’m a big data nerd.
I like to talk about all things data, finance, and crypto. You can find me on Twitter here.
At HodlBot, we make it easy to automatically create diversified cryptocurrency portfolios.
We created HODL10, HODL20, HODL30 indices and the first ever application that allows you to create your own personalized cryptocurrency index fund.
To get started all you need is a
- Cryptocurrency Exchange Account
- $200 in any cryptocurrency