In today’s social media landscape, Twitter is one of the most powerful tools for measuring market sentiment. But sifting through this massive information source in an insightful and actionable way is daunting. Today, we’re excited to announce that eToro has partnered with The TIE to develop unique sentiment-driven investment strategies for our network of traders: TheTIE-LongOnly Smart Portfolio.
“In traditional markets, retail investors have historically lagged behind the ‘smart money’ when it comes to the data and tools available to them,” said Guy Hirsch, US Managing Director of eToro. “This puts individual investors at a major disadvantage. In the spirit of crypto and decentralized technology, we believe that offering institutional-grade tools to every investor will level the playing field and democratize investing.”
Cryptocurrency fundamentals are still maturing. They have no revenue, dividends or debt. As a result, social sentiment — people’s positive or negative perceptions — is a significant indicator of crypto asset price movement. The Tie’s proprietary machine learning and language processing models ingest 850 million tweets per day, quantifying the positive and negative tone of conversations on Twitter. TheTIE-LongOnly Smart Portfolio strategy allocates based on positive sentiment, algorithmically rebalancing once per month.
Who is The TIE?
The TIE is a leading cryptocurrency information services firm providing sophisticated and proprietary digital asset data solutions to buy-side firms and other market participants. The TIE has developed algorithmic cryptocurrency trading models powered by the wisdom of the crowd which have achieved significant historical outperformance and reduced risk as compared to an equally weighted benchmark. Based in New York, New York and Greenwich, Connecticut, The TIE, LLC was founded in December 2017 by co-founders Joshua Frank, Joseph Gits, Ben Latz and Eric Frank
The TIE has committed to a strict ethics policy ensuring our independence and the integrity of our data and offerings. For additional information on our commitment to trust, transparency, and accountability you can read our ethics statement at http://data.thetie.io/ethics. Follow The TIE on Twitter @TheTIEIO.
How does it work?
TheTIE-LongOnly Smart Portfolio’s strategy opens trades based on positive sentiment signals on Twitter. Accessing the Twitter Firehose (the full real-time stream of all tweets sent); more than 850 million daily tweets are expertly analyzed for their crypto sentiment. Rebalancing takes place monthly and is done algorithmically using advanced machine learning techniques.
How does it perform?
Since launching the strategy in October 2017, the algorithm has generated a 281.% return after fees, compared to a 41% return generated by Bitcoin alone. Annualized, The TIE’s Long-Only portfolio strategy generates on a return of 123% on average, compared to a 29% return from an equally weighted basket of the same underlying crypto assets.
How was it built?
The TIE’s Partner Smart Portfolios were developed in collaboration with Social Market Analytics, an investor in The TIE and a premier provider of quantified sentiment data to the world’s largest financial firms. eToro will be debuting two additional Smart Portfolio strategies from The Tie, including a Long-Short and Market-Neutral strategy, in 2020.
Now you can invest in crypto using the power of social sentiment. Copy the TheTIE-LongOnly strategy now.
Disclaimer: eToro USA LLC; Virtual currencies are highly volatile. Your capital is at risk.