Why Whales Get Richer - HODL v Trading to 6.6 BTC Return in 30 Days Using Quantabotics SBI Triggers
Overview
The aim of most mortal traders is the accrual of USD. Cryptocurrency Whales often have different aims!
The increase or acquisition of the asset itself is the goal. If you trust in BTC then, like Gold, you want as much of it as possible regardless of the value!
This example is a real data example based on a capital sum of $2m USD from a gross asset portfolio of $20m USD and looks at the possible return in BTC value based using actual trading data from Quantabotics to micro trade a sideways market versus pure HODL method.
Method
Looking to Table 1, on 9th December 2021 : 1 BTC = $49,468 USD approx at. Based on $2m USD that would have bought 40.430177084175629 BTC
With no trading strategy (HODL) , that BTC would today be exactly the same.
What would have happened if we had traded that $2m USD in Quantabotics using a bot configuration of 68% accuracy, 1.2–10 min/max volatility and ONLY SBI (Smart Buy In) triggers?
The stake size being 1 BTC and the Take Profit margin at 1.4%.
We see from the data in Figure 1.0 that during that time the SBI traded 38 times. A cool 30 trades were profit at 1.4% and 8 trades remained open as of 08/01/2022.
With 30 wins at 1.4 % profit the total sells at profit equals $20,016.45 USD.
The number of existing open positions is 8 (That is 8 BTC as we had a 1 BTC stake) the cost of which was $371,464 USD.
With a current 1 BTC value of $42,218 USD the current value of those 8 BTC is now $337,744 USD.
An apparent loss of $337,744 - $371,464 = -($33,720) USD.
But.. how much Fiat do we have left?
The cost of the 8 positions we know was $371,464 USD in real money, therefore $2,000,000 — $371,464 = $1,628,536 USD.
We also made $20,016.45 in profits, so we add that to our pot $1,628,536+20,016.45 = $1648552.45 USD.
So cash in hand= $1648552.45 and BTC in market positions = 8.
How much BTC at todays price of $42,218 can we buy for $1648552.45?
The answer is 1648552.45/42218 = 39.048568146288313 BTC
Add this 39.048568146288313 BTC to our existing on exchange BTC of 8 and we arrive at a total of 47.048568146288313.
An incredible increase in BTC wealth of 6.618391062112684 BTC ..
At todays value 6.618391062112684 BTC = 42,218 x 6.618391062112684 = $279415.23 USD
Conclusion
If in December we had held onto our $2m USD and just bought BTC today 08/01/2022 we would get 47.373158368468426 BTC, which granted is slightly more than 47.048568146288313, but how could you call that?
The market could have swung a different way? And we all know the battlefield is full of hindsight. A trading strategy is the only way to play the game and keeping your cash in pocket is not playing the game at all.
There are therefore 3 scenarios that surface from the above exercise:
1: You could have HODL’d $2m USD in BTC during the period and made 0 BTC. Safe but uneventful.
2: You could argue that keeping the USD in your hand would mean you could today buy $2m USD worth of BTC and have gotten 47.373158368468426 BTC, although that is a total gamble in hindsight and could have equally resulted in no gain at all.
3: You could have traded the $2m liquidity in a statistical algorithm such as Quantabotics and traded your way up to 47.048568146288313 BTC whilst hedging your capital to maintain its value in BTC. Sure the returns are slightly less than option 2 (0.324590222180113 BTC less to be exact) but the risk was arguably much less with more possible results and the ability to exit or enter at will.
The above scenario is an example based on actual past performance but of course is no guarantee of future performance. The example is intended to help inform or educate the reader in understanding the difference between HODL and Trading strategies and highlight how large wealth can be levered to create more wealth. It is not financial advice and should not be treated as such or acted upon in anyway.
