Crypto Indices and How to Manage Them

480 reads

@ md-ataullah-khan Md Ataullah Khan SEO marketer with an experience of 7+ years.

For crypto owners with little to no trading experience, the Shrimpy application is a simple and effective solution for managing crypto without the complicated bells and whistles. Unlike most complex crypto trading bots, Shrimpy takes just minutes to set up!

reactions

Let’s walk through the steps to create and manage your own exchange-traded crypto index with Shrimpy.

reactions

Create & Connect your API Key

Before we guide you through the steps of API trading, you will have to create an exchange API Key and connect it to the Shrimpy App. Detailed instructions on how to link your exchange account to Shrimpy can be found below.

reactions

Linking Bittrex API Keys [Tutorial]

reactions

Once you’ve linked your API keys, head on over to Portfolio to create your personal cryptocurrency index. Here’s where the fun of creating your crypto index begins.

reactions

Construct your Custom Cryptocurrency Index

You’ll have two option on how you’d like to construct your portfolio. You can choose to add crypto assets manually, or you can choose to use Shrimpy’s Index feature to automatically construct a portfolio based on selected preferences.

reactions

Market Cap Weighted Index

reactions

When creating a market cap weighted index, there are 3 main settings to consider: # of Assets, Minimum Asset %, and Maximum Asset %.

reactions

Choosing a market cap weighted index means the portfolio will be allocated based on the weight of each asset’s market cap relative to the other assets in the portfolio.

reactions

# of Assets sets the number of assets which will be included in the index. The assets included are selected by highest market cap first, progressing to lower market cap assets.

reactions

Minimum Asset % determines the lowest allocation percentage that will be assigned to any asset in the portfolio. Due to the market being heavily weighted towards a few high cap assets, this can help prevent your index maintaining extremely small percentage of an asset.

reactions

Maximum Asset % configurations are meant to serve as an upper boundary for the maximum risk exposure of a single crypto asset. This prevents a particular asset from consuming more of the index than you would desire.

reactions

To create an index that closely follows the market, you can:

reactions

Increase # of Assets Decrease Minimum Asset % Increase Maximum Asset %

Equal-Weighted Index

reactions

Creating an equal-weighted index is even easier. Instead of having to choose the minimum and maximum allocation percentages, you now only have to select the total # of Assets you would like. Remember to blacklist any assets that you do not want included in your portfolio.

reactions

To learn more about the effects of diversifying your crypto portfolio, we recommend reading the articles below that discuss portfolio diversity and optimal asset distribution.

reactions

Dynamic Index

reactions

All crypto portfolios constructed using the Index feature will operate as dynamic index. A dynamic index simple means that the weighting for each asset will be updated before every rebalance period. If an asset increases in price, the percent allocation for that asset in the index can then also increase. In addition to the weightings, if the positions of the assets in your index change, they will also be update. For example, say you created an index which holds the top 10 assets. If the 10th asset by market cap switches with the 11th, this will be updated in the index by removing the previous 10th asset and replacing it with the new 10th asset.

reactions

Select a Rebalance Period for your Portfolio

As you’re creating your cryptocurrency index portfolio, you may notice the Rebalance Period option to the right side of the asset selection window. The rebalance period simply means how often a portfolio is rebalanced to its desired asset allocations.

reactions

Set your rebalance period

This is where the Shrimpy magic happens. Unlike other automated trading bots which involve complicated technical indicators and signals, Shrimpy follows a simple but straightforward approach of passive management through indexing and rebalancing. Learn more about the rebalancing below.

reactions

Rebalancing & Cryptocurrencies: An Introduction

reactions

When deciding on the best rebalance period for your crypto portfolio, consider your risk tolerance to determine the ideal rebalance period. We recommend our studies below that discuss various rebalancing strategies and results.

reactions

Once you’ve added your desired crypto assets and allocations, save and activate the portfolio to automatically trigger rebalance events moving forward.

reactions

Rebalance your Crypto Index Portfolio

Once you’ve completed setup and activated your crypto index portfolio, head on over to the Dashboard tab. You will be able to perform manual rebalancing events directly through the Dashboard.

reactions

Note: You must have an activated portfolio in order to perform any rebalancing events. If you choose to perform a manual rebalancing event, the timer for automated rebalancing events will be reset to the time of the manual rebalance.

reactions

Trade & Portfolio History

You can view all changes and trades made to your crypto portfolio under the History tab. The base currency unit can be changed under Settings.

reactions

Shrimpy Premium Features

Shrimpy Premium Subscribers receive access to several bonus features within the application. Let’s explore some of the advanced features that can help improve your experience with constructing a crypto portfolio.

reactions

Shrimpy Social Leaderboard

Premium subscribers can copy and follow other Shrimpy subscribers’ portfolios and trading strategies. If you’re not sure what type of crypto index to construct, our social leaderboard has some passionate crypto traders open to sharing their trading strategies.

reactions

Shrimpy Insights

In addition to gaining access to the Shrimpy community, premium subscribers also receive access to Shrimpy Insights. Insights give you an idea of how other Shrimpy users are constructing and managing their portfolio.

reactions

Backtesting Tool

Premium subscribers also receive access to Shrimpy’s Backtesting Tool, which lets users analyze performance returns from various asset allocations and rebalance strategies using historical trade data.

reactions

Backtesting provides a quick assessment of the viability of a trading strategy by applying it to historic trade data.

reactions

About Shrimpy

Shrimpy is an automated crypto trading & portfolio management tool that lets users automate their crypto portfolio strategy like a traditional index fund. Shrimpy has a consumer application for retail consumers and a Crypto Trading API for developers and advanced traders.

reactions

Shrimpy Application

Shrimpy - Cryptocurrency Portfolio Management

reactions

The Shrimpy App is a portfolio management solution for cryptocurrency and digital asset owners. Through its unique indexing and rebalancing engine, Shrimpy lets traders manage their crypto assets similar to that of a traditional index fund. By providing a simple passive management solution, Shrimpy provides users with an effective long-term solution for managing their crypto assets without ever having to trade.

reactions

The free version of Shrimpy includes complete indexing and rebalancing features for ALL users. Shrimpy also offers a monthly premium subscription for $8.99/month, which includes:

reactions

Shrimpy Social: Follow, communicate, and share strategies with other Shrimpy traders.

reactions

Shrimpy Insights: Learn how other Shrimpy users are constructing and managing their crypto portfolio.

reactions

Advanced Backtesting: A robust backtesting tool for evaluating custom cryptocurrency portfolio & strategies.

reactions

Shrimpy API

Shrimpy | Crypto Trading APIs for Developers

reactions

Beyond the consumer app, Shrimpy also offers an API for developers looking to integrate scalable exchange trading functionality into their app.

reactions

Shrimpy’s Crypto Trading API was created as a cloud-based solution to address several crypto developer roadblocks including Exchange Trading, Product Scalability, and User Management. With Shrimpy’s API in hand, developers can focus on creating the next era of groundbreaking products that will shape the future of crypto.

reactions

Shrimpy’s API is readily compatible with the following exchanges and API endpoints: Binance API, CoinbasePro API, Bittrex API, Kraken API, Gemini API, Poloniex API, Huobi API, KuCoin API, Bibox API, BitMart API, and HitBTC API.

reactions

Traders and developers can leverage Shrimpy’s existing trading infrastructure for trading platform/app development instead of having to manage connections to each and every exchange.

reactions

Additional Links:

reactions

Telegram

reactions

Twitter

reactions

Facebook

reactions

Reddit

reactions

Originally published at blog.shrimpy.io.

reactions

Share this story @ md-ataullah-khan Md Ataullah Khan Read my stories SEO marketer with an experience of 7+ years.

Tags