[POLL]How will the top 25 altcoins perform compared to BTC?

[USDbitfnx]

I have started the first professional crypto index, called crypto25:
Discussion: https://bitcointalk.org/index.php?topic=860033.0
Website: http://jnxt.org/crypto25/

Now I am interested to know what the folks of BTT think of how it will perform.

This is how the index is calculated:

Coinselection:
Optimally the top 25 ranked coins on http://coinmarketcap.com/ are used for the index, but coins that fail to be liquid enough, will be dropped from the index. This is done to ensure, that one can always invest according to the index and not run into liquidity problems.

Index weights:

Index weights are calculated using their relative marketcapitalisations with the following constraints applied:
No altcoin weight can be >10%
Index Rank 1-5: >=6%
Index Rank 6-10: >=4%
Index Rank 11-15: >=2%
Index Rank 16-20: >=1.5%
Index Rank 20-25: >=1%

The weights are then calculated using excels solver using the above-mentioned constraints.


My theory is that the top 25 altcoins will outperform BTC in the long run, but on BTC downtrends, they will underperform and on BTC uptrends, they will overperform.

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[TwinWinNerD]

There might be a "slight" bias towards altcoins, maybe that is because of the subforum "Alternate cryptocurrencies". Hahaha

[5000Bitcoins]

My theory is that the top 25 altcoins will outperform BTC in the long run, but on BTC downtrends, they will underperform and on BTC uptrends, they will overperform.

Just by judging by percentages? Yes, maybe, since the marketcaps are extremely different.

if someone has 2 million dollars in bitcoin, and it goes up, it's possible to sell for a profit.
but if I someone has 2 million dollars worth in another one, it's unlikely to be sold without completely crashing the market

for smaller investments, you might be right, although I must say I believe you stand a higher chance of losing a lot of money with such diversification.


When do you start testing your theory?  

[USDbitfnx]

My theory is that the top 25 altcoins will outperform BTC in the long run, but on BTC downtrends, they will underperform and on BTC uptrends, they will overperform.

Just by judging by percentages? Yes, maybe, since the marketcaps are extremely different.

if someone has 2 million dollars in bitcoin, and it goes up, it's possible to sell for a profit.
but if I someone has 2 million dollars worth in another one, it's unlikely to be sold without completely crashing the market

for smaller investments, you might be right, although I must say I believe you stand a higher chance of losing a lot of money with such diversification.


When do you start testing your theory?  

I already am. You can track the performance here: http://jnxt.org/crypto25/

(Note that: the old chart data was removed due to a API bug, shouldn't happen in future.)

[USDbitfnx]

The index outperformed Bitcoin a total of 4%.

[USDbitfnx]

This is getting really scary now:

11% up vs Bitcoin this week alone.



http://jnxt.org/crypto25

[Number6]

It will be interesting to watch this over longer period of time and during times of massive price swings.

[USDbitfnx]

It will be interesting to watch this over longer period of time and during times of massive price swings.

Yes it will. I am really interested on how this will perform in the longterm. I talked to multiple very capable people with a deep understanding of crypto-market and none of them dared to give any longterm projections. (maybe because I wanted to bet on it )

[USDbitfnx]

We are now at 13.5 % outperformance compared to BTC. This is incredible!



Source: http://jnxt.org/crypto25

[meadefreling]

Thank you USDbitfnx for taking time to develop this website, but i think just ranking them might not be enough but knowing which one to invest in.
What do you think?

[USDbitfnx]

Thank you USDbitfnx for taking time to develop this website, but i think just ranking them might not be enough but knowing which one to invest in.
What do you think?

I am not ranking them. The index is using certain rules to derive the index composition once a week. The rest is up to the gods to decide how the index will perform.

Again: The 1-25 is not a ranking, it is the coins in the index and the % are the weight in the index.

If you want to recreate the index you need to buy the same coins (all of them) in the exact same weight on each sunday.

[USDbitfnx]

Check out the fancy new chart tool on the webpage!



http://jnxt.org/crypto25/

[canadian1969]

Great idea,  was thinking just the other day we needed something like this. When will it be live?
If I can help in any way let me know.

[USDbitfnx]

Great idea,  was thinking just the other day we needed something like this. When will it be live?
If I can help in any way let me know.

Right now I am just letting it run and watch for potential bugs. In a few weeks I will start a portfolio to check how much slippage will occur in my portfolio. The index will probably not go live in 2014, but in early 2015!

[USDbitfnx]

What an amazing week!

The index touched 22% and is now down to 18%!

[USDbitfnx]

Pretty unexpected result.


Source: http://jnxt.org/crypto25/

Looks like very constant outperformance. Lets see when this stops!

[capodieci]

What did happen Feb 23rd to the chart?