Hold 5 to 30 different cryptocurrencies on your exchange and grow them automatically. At least that's what they said.
Well, did it work?
On 24th October 2019, I created a new Binance account and deposited 0.034899329 BTC ($260.31). Then I connected it with Hodlbot via API and let it invest my money for me.
Hodlbot is free for accounts under $500 so I thought it was a good amount to see what will happen and I don't have to worry about over exceeding the free plan.
It was my first automatic trading tool (bot) and I was eager to see results.
Results after 101 days (2nd Feb 2020):
- BTC holdings up by +5.17% (0.036706382978723 BTC)
- USD up by +32.6% ($360.04)
During that time BTC went up from $7,450 to $9,400 (+26.17%). Difference between Holding and Hodlbot is 32.6%-26.17% = 6.43%.
I took the money and reinvested them into another bot. (Pssst. follow me if you want to know how other bots compare to Hodlbot)
I can say I was very pleased with Hodlbot results. The results could have been even more impressive if I had kept one strategy instead of switching my strategy from Hodl10 index to Hodl20 index halfway.
Simple, yet effective strategy of Hodlbot
Once you have deposited funds to your exchange and connected it with Hodlbot, you can choose your strategy.
You can use premade strategies like Hodl10, Hodl20 or Hodl30 indexes. You can also set your own strategies based on your preferences.
The strategy is always the same:
1. Divide funds between cryptocurrencies based on your selected portfolio.
2. Some cryptocurrencies will go down. Some will go up.
3. Rebalance coins every 28 days or if a coin goes up or down more than 10% of its allocation.
The idea of the strategy is to use coins that went up to buy coins that went down. In theory, this should allow you to increase your position over time.
And at least for me, the theory worked!
You can currently connect Hodlbot with these exchanges:
Warning: Once you connect Hodlbot with one of these exchanges, do not use the exchange for anything else than Hodlbot. If you add or remove some of the coins, Hodlbot will make a rebalance and you will hinder its results.
👍 The good
Even if you're not interested in altcoins, Hodlbot allows you to own a well-diversified portfolio of altcoins. The strategy seems to work well for accumulating more coins.
You can really set and forget Hodlbot. It does everything on its own and it is free to use with balances under $500 so you don't even have to worry about paying any invoice.
Even with the paid membership, it's only $10/month which is quite cheap compared to some other bots on the market.
You can start Hodlbot with a minimum amount of $200 and already expect some results. If your balance is over $500 you should make sure to have at least $1,500 as your balance so your profits will not be consumed by the monthly free.
👎 The bad
Hodlbot performs well in a sideways market and in an uptrend.
But when altcoins are crashing down, your portfolio will lose a lot of its dollar value as altcoins tend to have bigger losses than a more stable coin like Bitcoin.
Some altcoins can and will go to $0. So choose your strategy well.
🤷 The meh
If you're looking for excitement, Hodlbot is not for you.
Your account might be on the negative for a long time before it gets on the positive.
You can try out Hodlbot for as little as $200 and see how it works for you. It is free to use for balances under $500.
I used Hodl10 and Hodl20 strategies and I think they are solid. The more smaller cap altcoins you have in your portfolio, the higher the risk (and maybe reward).
I used Rebalance interval of 28 days and a rebalance threshold of 8%. I found this combination to be most succesful. Higher interval trades will get costly with trading fees. And with too infrequent rebalance you might miss on the "buy low sell high effect".
Here are some more resources I found to be useful when I was starting out.
If you have any questions, I am happy to answer them for you in the comment section below.