What does a highly volatile asset class offer traders beyond palpitations and the occasional heart attack? Opportunity.
Nicole Wirick of Prosperity Wealth Strategies in Michigan summed it up for Forbes: “Market volatility is a normal part of investing and is to be expected in a portfolio. If the markets were going straight up, investing would be easy and we would all be rich. “
And during the decades-long bull market on Wall Street, some participants who should know better seem to have forgotten, having grown accustomed to steadily rising stock prices over the years.
Jamie Dimon, CEO of JPMorgan Chase, who called Bitcoin a “scam” in 2017, told the US House of Representatives Financial Services Committee this week, “My personal advice to the people is stay away from it.” At its own general meeting however, on May 18, he said, “Many of our customers ask: Can we help them buy or sell cryptocurrency? And we invest in that as we speak. “
Why is the CEO of the largest bank in the US investing in something he advises the rest of us not to touch?
Volatility is at the heart of this argument: it’s a classic case of “do what I say not like me”. And Dimon and many like him in traditional financial markets make tons of money when the markets are rough.
Of course, no markets are more choppy than crypto.
In the past few weeks, volatility has returned to the crypto markets, pushing Bitcoin to $ 30,000 before the king of digital assets returned to over $ 40,000. And altcoins have gotten even more dramatic – a phenomenon that has helped Cointelegraph Markets Pro’s quantitative algorithm, the VORTECS ™ Score, achieve exceptional results in automated live testing.
This table, created on May 28th, shows the results of the performance of the VORTECS ™ Score since January 3rd of this year when the algorithm went live. At the time of publication, one day later, the ROI of the top strategy is now over 3,000%.
In a score-based test scenario, the algorithm “buys” a digital asset when the VORTECS ™ Score exceeds a certain threshold (e.g. 80) and “sells” it when it reaches a second threshold (e.g. 75) exceeds.
Without using fancy balancing techniques, simply splitting the portfolio across all assets that currently require investment, The algorithm achieved a return of 3,037% for its top performing test strategy – Buy at 80 and sell when the asset goes back over 80 on the way back.
For comparison, Bitcoin has returned only 11.2% since Jan 3rd, and an evenly weighted basket of the top 100 altcoins has returned 247%.
The only reason the VORTECS ™ Score can deliver oversized returns like this is because crypto markets are volatile – which offers multiple entry and exit options in a shorter period of time than traders in traditional markets.
This may be partly a function of the 24/7 nature of crypto trading, but also partly because the risk tolerance of cryptocurrency investors is generally seen as significantly higher than that of Wall Street CEOs – at least for short-term investments.
While volatility has obvious drawbacks, including the risk of total and permanent loss, it also has great upside potential for traders with strong research skills.
And strong research tools.
Cointelegraph Markets Pro is available exclusively to members monthly for $ 99 per month or annually with two free months. It has a 14 day money back policy to ensure that it meets the needs of subscribers for crypto trading and investing, and members can cancel at any time.
Cointelegraph is a financial information publisher and not an investment advisor. We do not offer any personalized or individual investment advice. Cryptocurrencies are volatile investments and carry significant risk, including the risk of permanent loss and total loss. Past performance is not an indication of future results. Illustrations and diagrams are correct at the time of writing or as otherwise stated. Live-tested strategies are not recommendations. Ask your financial advisor before making any financial decisions. Full terms and conditions.