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Author Topic: The research of work strategies with tokens  (Read 76 times)
ui_zakharchenko
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July 29, 2018, 05:26:35 PM
Merited by CryptikEnigma (1)
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I have decided to analyze my bounty wallet and to find out the more effective strategy of work with tokens.

What’s given:
 - I kept to the strategy HOLD
 - the wallet that I analyzed is https://ethplorer.io/address/0xd95ce2be8ad19b8fb30520db3bc598cb782f96d1#ready
 - only the tokens that are present at coinmarketcap were included into analysis.

Task:
to analyze the known to me strategies of work with tokens on the real example and to find out the most effective strategy in a long-run.

Strategies:
- to hold
- to sell during pump/growth of the market
- to sell tokens at once as soon as received
- to sell half of the amount, the second half to sell during pump/growth of the market
- to sell half of the amount and hold the rest
- to try to sell tokens at their maximum price each (that’s really doubtful, but I considered such a strategy from a hypothetical point of view)

I considered funds withdrawal into USD, as well as the conversion of alts into BTC and their hold.

How I did the research:
1. I substituted tokens’ price in USD  from CMC ( not a certain stock exchange) at the moment of their receiving or the nearest listing (the beginning of diagram at CMC). Thus, I got prices at which I can sell the tokens in USD at once.
2. The first pump that I considered was in January. At that time, my portfolio was growing and I wanted to sell out. I remember the day, it was January 20 (my total deposit reached 80k$). I took it, as the settling-day as there is no sense to choose the highest pick. It was the day when I was ready to sell but decided to wait a little more.
3. The second pump when I got the opportunity to sell out was at the end of April-beginning of May. It was April 27 (my total deposit reached 60k$). I did not sell my tokens as I was hoping that the growth would continue like the last year.
4. I gathered information about maximum prices in USD and BTC on each token.
5. To count prices in BTC, I simply divide USD amount by the BTC price at that day, when I considered my potential sell-out.
6. Prices are indicated for today for Hold strategy (July 26).

Results:
I presented results in diagrams for better clarity.





Additional results:
1. Pareto principle works out greatly: 20% of tokens give 80% of portfolio price.
The calculations for hold-strategy are below
Amount of 20% of tokens is 14633,28$
The rest  80% of tokens  is   4034,15$
2. The average percentage of growth during pump/growth of the market is 256%.
And the average percentage of growth during maximum prices is 408%
3. I have analyzed 55 tokens and only 10 of them have the price higher than at the moment of receiving, which is nearly 20% ( maybe Pareto again?). That’s why I wouldn’t change the main strategy. You can’t guess this moment ( I mean which coin will grow during holding and which one during pump). But the fact is that 80% of tokens during hold are trading at lower prices than at the moment they were received.

Conclusions (read carefully but remember, this is only my opinion):
1. Strategy hold doesn’t justify itself absolutely. The market doesn’t allow altcoins to grow. They follow only the growth of Bitcoin or movement from cap. Ant this is most often manipulative actions. In this way I mean that if you decided to hold for 3 years as by that time everything would grow (roadmaps, project developments), that wouldn’t necessarily happen. Maybe the prices would grow by the time you decided to come back but during that period the market could be really low and as the result you’ve lost a plenty of opportunities ( just like me during this year )
2. Selling during pump/growth of the market looks very good. Most probably you will earn more than just selling tokens at once after their receiving or listing. But the pump was just once a year in January and another one in April-May. Are you ready to wait for the whole year? And it’s not certain that you will be able to catch it  as it can be very dashing.
3. Selling tokens at once. To be honest, it is a revelation for me. If I sold tokens at once, I would have twice less income than from selling them during pumps and three times more than from holding ( which actually happened to me).
4. Naturally, if you sell tokens at maximum price each, then the profit will be bigger than from other strategies. But I don’t think that there are people who can make such a strategy real.
5. I don’t want  the next conclusion being made by Captain Obvious. You can state orders and forget about your tokens for some time. Sooner or later some order can be fulfilled. But this research can’t  suggest which order to choose. I gave some numbers for thinking in the section “Additional results”.
6. Another positive moment of selling tokens at once. If you miss a good opportunity (for example in January) and then you are trying to get at least something by selling at lesser pump, you actually loose. Thus, not every pump of the market will bring bigger profit than selling tokens at once.
7. Another revelation. If you sell 50% of tokens, and behave with another half according to chosen strategy, you can see such situations:
 - if you hold 100% of your tokens, then the final number looks twice bigger and not so sad
 - profit from the first pump in January decreases, and that’s not surprising, the main amount of tokens was before it
 - profit from the second pump is almost on the same level
  What does it mean? Everything is more balanced here, as there is some kind of insurance. Numbers for holders look more appealing, moreover there is always cash or bitcoin, which can be used for buying or riding the ways. And those who follow the pumps will get less. Thus, the difference between holders and pumpers is becoming less obvious.
8. If you convert tokens not into USD but in BTC and after that hold it, you will face the same problems as from holding. The market is mainly decreasing. That’s why, in my opinion, it is better to hold USD and if you are interested in trading or investing,  you need to try to get Bitcoin or alts when they are low. But in this case you can burn your depo, while becoming Bitcoin holder .
9. Looking at graphs, it seems that some tokens are completely “dead”, in this way if you have not sold them at once or during their single pump, then holding strategy is doomed. Probably, if you take a bigger selection of tokens, the number of such tokens will be even bigger. And that doesn’t speak for holding strategy.
10. You can try to use Pareto’s principle. If you know top 20% of your tokens, then maybe it will make sense to apply another strategy for them. You can analyze graphs, follow the news, roadmaps. It means holding until the good moment to sell them in order to buy again.  Well, you should think that through how to use it correctly.
11. These conclusions are fair during this period of the year, maybe in 3 or 5 years holding strategy will give profit more than from selling tokens at once. Maybe the whole market will grow significantly. This year the market has been growing from 100 cap till 300, and as the results all alts are low (I don’t take into consideration market cap 800 yards during January pump). That’s why there is no guarantee that even with market cap 10-20 times bigger than the current one, altcoins will be trading at much higher level. Cap can be in Bitcoin and top altcoins, as well as it can be spread in thousands of altcoins.

In total:
If you ask me, which strategy I would advise, I would say:
1. Sell tokens at once
2. If you are more risky, then wait for the pump
3. For those who are really serious men and want to stay at the market – catch the maximum prices.
I am sure that 80% of bounty hunters require the first strategy or some kind of mixture – selling half of the amount at once and catching pumps for the other half.
A year later, looking back at my analysis, I would choose the strategy of selling the half and holding the other one waiting for pumps ( maybe I will correct this conclusion if I figure out how to work effectively with Pareto’s principle).
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CryptikEnigma
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July 30, 2018, 04:55:55 AM
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Really good and quality article. I also adhered to the strategy of holding. Now it's worth pondering.
Thanks to the author.
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