ETHBTC Pop answer

The answer to the question of trade $ETH for $BTC or vice versa on the low ratio pop-quiz.

The answer is surprising.

First of all, to answer this pop-quiz, the ETHBTC worksheet helps.

1. import ETH/USDC data on that tab

2. import BTC/USDC data on that tab

3. observe which strategy works.

4. PROFIT! #WAGMI 🎉🎉🎉

ETHBTC worksheet

Analyses

Well, we have the data and the analyses from the ETHBTC worksheet.

What do these results tell us?

HODL strategy

2022-05-20 entry: $60,740.13

2023-05-20 exit: $54,705.73

ROI/APR: -9.93% BOO! 

Daily AVE strategy

Where I

• 10% BTC -> ETH when ratio < average ratio
• 10% ETH -> BTC when ratio > average ratio

2022-05-20 entry: $60,742.60

2023-05-20 exit: $90,825.64

ROI/APR: 49.53% WOW! 🎉🎉🎉

STDDEV strategy

Where I

• only swap 10% BTC -> ETH when ratio < 1 stddev
• only swap 10% ETH -> BTC when ratio > 1 stddev

2022-05-20 entry: $60,742.60

2023-05-20 exit: $59,586.69

ROI/APR: -1.90% BOO! 

Findings

The daily swap AVE strategy is the clear winner here (caveat: backtesting, the method used here, predicts 0% of future results accurately), so: yay!

I have a bone to pick, however, with both the AVE and the STDDEV strategies: they're very spiky.

Can they be improved?

Postlude: Pop-quiz answer

Now.

All of the above doesn't answer the pop-quiz. Because the answer is trivial:

• BTC -> ETH when ratio low
• BTC <- ETH when ratio high

You know: "buy low; sell high" applies here, too.

So, on the two dips last month, a BTC -> ETH swap was called for in each case.