Following the launch of
Covesting.io in 2017 after raising more than $18 million in funding during that year, the new type of crypto by social trading that it brought to the market has taken off in popularity and adoption.
One of the primary reasons for this has been the positive response from investors that have been able to use the ratings system of covesting in order to gain deeper insights into potential investment opportunities.
We’re taking a look at what covesting actually is, and breaking down its rating system to understand the advantages that investors are enjoying by using it.
What is Covesting?
For the past decade and a half, social trading has been common practice within the traditional asset markets such as stock and foreign currency markets, however the same has not been true with cryptocurrencies.
In fact, crypto social trading was only introduced to the market in any kind of significant way in 2017 with the launch of Covesting.io, a fintech startup that raised more than $18 million of funding during that year, and that is now the largest crypto social trading platform in the world.
Covesting is a new kind of social trading that was created by Covesting.io, and that allows for experienced traders to be able to create peer-to-peer investment funds and directly seek investment from a diverse range of traders and investors in the crypto space.
What is the Covesting Ratings System?
The Covesting ratings system is an advanced collection of data and information that is provided to potential investors on the Covesting module, with these data relating to the performance and risk profile of each strategy.
Experienced traders known as “strategy managers” create peer-to-peer investment funds that are tied directly to a strategy, with the profit and loss of that strategy publicly displayed.
Investors, also known as “followers”, can use the information provided by the Covesting module on each potential investment opportunity in order to analyze and compare them, and to select the best opportunities that are provided by the top performing strategy managers.
How is the Covesting Ratings System Transparent?
5-Star Ratings
The 5-star ratings system on PrimeXBT’s Covesting module has been implemented in order to provide followers with the ability to quickly scan a number of key metrics for each strategy.
These include checking that the ratio of profitably-closed positions compared to unprofitable ones is at least 70%:30%, as well as there being more than 50 BTC turnover over the past 30 days.
This allows followers to unlock potential hidden gems by comparing the 5-star ratings of different strategies, exposing details that may not be obvious on the surface, and making it easier to make informed and effective decisions on which strategies to invest into.
Detailed Profit and Loss Data
Obviously the most important data for any potential following is the profit and loss that the strategy has generated, with this indicating the potential kind of rewards that following a given strategy will provide.
Followers are able to see both the total ROI that a strategy has generated through its time of operation, as well as seeing the ROI that has been generated in the past 24 hours as well.
Although these metrics are important to consider, followers should remember that the profitability of a strategy is not the only consideration should be made, and also that historic profitability is only an indicator of future profitability, and not a guarantee.
Granular Equity Information
One of the more important metrics that can be analyzed by followers is the equity composure of a given strategy, with this being split into the equity that the strategy manager personally has, as well as the total equity of all followers.
This is also coupled with the total amount of followers for a given strategy, which gives a better insight into the kinds of levels of equity that each follower might have.
One of the more important considerations for followers when selecting strategies is the equity that the manager themselves has in a fund, being that managers that have higher levels of personal equity in the funds are less likely to take risks and are more likely to have a greater interest in generating safe profits.
Strategy Description, Margins, and Follower Data
The description of the strategies that are being used by the strategy manager are important considerations for followers as well, being that this can show the kinds of levels of risk that a strategy manager might be using.
Even more importantly with regards to risk is the margin used over time by the strategy manager, with this being displayed on each strategies profile page in graphical form.
Also as mentioned above, the follower data of each strategy indicates the total number of investors that a strategy has, which can provide a greater insight into the popularity of each strategy as well.
Benefits for Strategy Managers
The rating system of the Covesting module provides a range of advantages to strategy managers, with it being much harder to solicit investment from followers without this ratings system being in place.
As a concrete example, a strategy manager that uses a relatively conservative amount of margin may attract a large number of followers that are able to see the historic margin levels of that strategy, and that are looking for investments with lower risk profiles.
Also, for the top performing strategy managers, the data relating to the ROI and performance is all publicly available for followers to see, with this eliminating the need for strategy managers to do any kind of outreach in order to get investors, and with them getting a large amount of attention as a result of the rating system.
Advantages for Followers
The benefits of the Covesting rating system for followers is obvious, being that in order to be able to make an effective decision about which strategies to invest into followers need as much relevant information as they can get.
As well as a range of the most obvious information that would be expected to be provided to followers such as a description of the strategy and of its profit over time, there are a range of data that provide deeper insights into the nature of the strategy and that go further to help follow us to make the decisions.
PrimeXBT’s Covesting module rating system ensured that followers have access to transparent data and information, allowing them to make informed decisions on where to invest, and assisting to increase the likelihood of generating profit and reducing risk in the cryptocurrency market.
In Summary - The Covesting Ratings System
The collaboration between PrimeXBT and Covesting.io to create the Covesting module has been a widespread success in 2020, with the 4-month beta phase of the module seeing more than $1 million worth of equity being provided by followers.
This is because the module is a powerful solution for both experienced traders and investors that would like to leverage the knowledge and experience of veterans in the market.
For more information about how to get involved with covesting on PrimeXBT, and the advantage of doing so, check out
this link.
