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What Strategy Saves The Most Money During a 50% Ethereum Drop?

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A deep look at Ethereum's recent 50% drop. Analysis of two popular investment strategies against One Button Capital's innovative AI trading technology.

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Research
One Button Capital
May 24, 2022
May 24


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).

Crypto and Ethereum performance between Dec 3, 2021, and May 24, 2022, via CoinGecko

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.

The free calculator at DCA-CC

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.

Ethereum Case Study

What is analyzed:

  • Trading Bot: Performer v2 strategy by OB Capital
  • Launched: Dec 3, 2022.
  • Market Pair: Ethereum / USD Coin
  • Duration: 5 months and 21 days (172 days)
Chart showing the buys and sells of the trading robot on Ethereum.

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.

How did it do it?

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.

Historic results:

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).

Data via the admin panel from the OB Capital app.

Another Ethereum trading pair — ETH / USDT:

Performer v2 robots that ran for at least three months in ETH / USDT.

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.

Further Reading

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.

We will provide you with all the information you need to  stay one step ahead of the market with just 10 minutes of reading time a week.

Other case studies:
The 66-Days Bitcoin Case Study
35 Case Studies Of AI vs Bitcoin
Can AI Outperform The Bear Market?

Links:
Twitter | LinkedIn | Email

Until next time,
Stay safe, and invest reasonably

DISCLAIMER:
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.

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We regularly prepare insightful reports and case studies about crypto trading and the blockchain industry.

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