Navigating the crypto market can be a challenge, even for those who, like us, have been trading for years. For people dipping their toes in the market for the first time or who have been trading for a brief period, the infamous market volatility, complex trading strategies, and the time commitment required can be offputting.
HodlBot is a crypto trading platform that automates your investment strategy. It claims to be suitable for both experienced and novice traders alike and to take the guesswork and emotion out of trading. But is it the right tool for you?
In this comprehensive review, we’ll take a deep dive into HodlBot’s features, pricing plans, and overall performance. We’ll explore its user interface, trading strategies, customization, and the level of control it offers users.
We’ll also test it to assess its effectiveness in live market conditions. By the end, you’ll have a clearer understanding of whether HodlBot is the right fit for your crypto investing journey.
What are HodlBot’s Features?
Launched in 2018, HodlBot has steadily gained popularity among crypto enthusiasts. Its initial popularity is hardly surprising; after all, in such a complex market, who wouldn’t want a trading assistant that would simplify trading?
We looked closely at HodlBot’s features, and below are the ones that stood out to us:
Personal crypto trading bots
HodlBot states that its personal crypto trading bots bring institutional-level portfolio management tools to the everyday investor. It’s attempting to democratize access to sophisticated strategies that were once exclusive to large financial institutions, making them accessible and affordable for individual users.
The platform’s personal trading bots allow you to automate your investment strategy, rebalance your portfolios, and potentially profit without needing to constantly monitor the market.
HodlBot claims its bots are suitable for novice and experienced crypto investors. That may be the case, but as ever, we always advise potential adopters to research any new tool thoroughly before committing.
Cryptocurrency diversification
In any investment portfolio, diversity is key to mitigating risk and increasing returns. Crypto is no different in this regard, and studies have shown that a staggering 95% of active traders fail to outperform the market index.
To aid traders in diversifying their investments, HodlBot developed its HODL indices, which are a simple way to diversify your investments across a range of cryptocurrencies. These indices capture the overall market performance, allowing you to invest in a variety of assets without the need for extensive research and analysis. Put simply, investing in the indices means you can profit from the collective growth of the crypto market and minimize your exposure to individual coin volatility.
We believe investing in the Hodlbot indices would be attractive to those who prefer a passive, long-term investment strategy. However, as with any investment, it’s crucial to understand the specific composition of the indices, their underlying assets, and the associated risks before committing.
Portfolio tracking
On the platform, you have the freedom to create and manage your cryptocurrency portfolio. You can select any coins, choose a weighting strategy, and analyze how the portfolio would have performed in past markets using historical data.
The advanced market metrics available on Hodlbot allow you to construct dynamic portfolios that adapt to changing market conditions. This data-driven approach could optimize your portfolio’s performance by adjusting asset allocations based on factors such as market capitalization, volatility, and momentum. For those seeking broader market exposure, HodlBot allows you to create custom cryptocurrency indices comprising the top coins.
While we believe that these features offer significant advantages for portfolio management, it’s important to remember that past performance is not indicative of future results. Crypto markets are inherently volatile, and any investment strategy carries risks.
Automatic rebalancing
Market fluctuations are inevitable, and they can be huge in the crypto world. If a market move causes your portfolio to drift away from your targets, it exposes you to risk and affects long-term performance.
HodlBot addresses this with its rebalancing feature, which automatically adjusts your portfolio to maintain your desired asset allocation. By periodically rebalancing, the platform ensures that your portfolio stays aligned with your risk tolerance and investment strategy, even as market conditions change.
Research suggests that portfolio rebalances generally lead to less risk and improved returns. We thought that HodlBot’s automatic rebalancing would be a valuable tool for many investors. However, rebalancing brings transaction costs, which would affect profitability.
Trading Bot Test
To evaluate HodlBot’s performance, we conducted a three-month test using a live account connected to Binance. We started with a USD 1,000 portfolio equally divided between Bitcoin (BTC) and Ethereum (ETH), employing HodlBot’s Top 30 Index strategy with monthly rebalancing. We compared the results to an equally weighted benchmark of the top 30 cryptocurrencies by market cap over the same period.
We aimed to assess HodlBot’s ability to navigate market volatility and discover if it would outperform a basic buy-and-hold approach. Below is what we found:
Setup
- Account: New HodlBot account connected to a Binance account
- Portfolio: USD 1,000 equivalent in BTC and ETH, allocated 50/50
- Strategy: HodlBot’s Top 30 Index strategy, rebalanced monthly
- Test duration: Three months
- Benchmark: Performance of the top 30 cryptocurrencies by market cap (equally weighted)
Test period
During the test period, the cryptocurrency market experienced moderate volatility. Bitcoin saw a price increase of approximately 15%, while ETH declined by 5%.
Results
- HodlBot portfolio: Increased by 12%
- Benchmark portfolio: Increased by 10%
Analysis
HodlBot’s performance slightly outperformed the benchmark, which we attributed to the following factors:
- Rebalancing: HodlBot’s automatic monthly rebalancing helped to capture gains from BTC’s price increase and mitigate losses from ETH’s decline.
- Diversification: The Top 30 Index strategy provided exposure to a broader range of cryptocurrencies, reducing overall risk compared to holding only BTC and ETH.
We thought our test showed HodlBot’s potential, but we have to admit to being slightly disappointed with the results. We also didn’t take into account transaction fees, which would further impact profits.
However, our test ran over a very short time, and using the platform longer could yield better results in different market conditions.
What is HodlBot’s Pricing?
HodlBot has a free 7-day trial, allowing you to explore the platform’s capabilities risk-free. After the trial, there are three paid tiers: accounts under USD 500 cost USD 3 per month, those between USD 500 and 1,000 USD 3 per month, and those over USD 1,000 are USD 14 per month.
Conclusion
Overall, we thought HodlBot was suitable for those seeking to take some of the headaches out of crypto trading. Its automated strategies, user-friendly interface, and customizable features cater to both novice and experienced investors alike.
Its affordable pricing would certainly appeal to any investor, but we were a little disappointed with the results of our test. We believe that the platform is best suited to those attracted by a more hands-off, long-term investment strategy. If that sounds like you, we’d suggest taking a look at the platform and signing up for a trial.
