Stoic, a cryptocurrency trading app with AI by Cindicator, has returned over +2,120% since its public launch in September 2020.
This post reviews Stoic, deep dives into how the app and its cryptocurrency trading strategy work, and explores performance in its first year.
What is Stoic?
Stoic is a simple cryptocurrency trading app that allows users to connect their Binance accounts to a hedge fund-grade quantitative trading strategy.
While most other cryptocurrency trading bots require the user to build and fine-tune a strategy, Stoic works right after it’s linked to a Binance account (currently the only exchanges Stoic supports are Binance global and Binance US).
It’s very easy to get started with Stoic:
- Install the mobile app or sign up for the web app;
- Create the API key for a verified Binance account;
- Scan the QR code with the app.
After that, the strategy starts to run in about 24 hours. Unlike with other cryptocurrency trading bots, no complicated settings are required to get started.
Stoic charges an annual fee of 5% of the user’s starting balance. The minimum required balance is $1,000 so the lowest fee would be just $50.
While for the user Stoic is very simple, under the hood it runs a trading algorithm that was initially developed for a hedge fund.
To sum up, Stoic’s advantages are:
- A well-tested quant strategy. Built by a team behind hedge fund Cindicator Capital;
- Easy setup. Starts trading without any settings from the user;
- Low fees. Just 5% a year, zero fee on profits;
- Start even with $1k. Low minimum account balance lets almost anyone try Stoic in action.
Now that it’s clear how the Stoic app functions, it’s time to explore its trading strategy.
How Stoic cryptocurrency strategy works
Built by the Cindicator team, the Stoic app is the result of years of experience in cryptocurrency trading.
Since 2017, Cindicator has collected millions of cryptocurrency forecasts from over 180,000 users registered on its platform. Cindicator then applies AI to these forecasts to further increase the accuracy. All this data was used to develop and test dozens of quantitative cryptocurrency strategies, initially available via Cindicator Capital, the team’s hedge fund.
The current Stoic’s strategy is a long-only portfolio of a wide range of cryptocurrency assets.
Here is how the Stoic cryptocurrency strategy works at a high level:
- Selects the investment universe. The main criterion for considering an asset for the portfolio is that it should have at least $10 million in daily trading volume. This weeds out illiquid assets that might be subject to pump-and-dumps and other manipulations.
- Picks the assets and position sizes. To decide how much of each cryptocurrency to buy, Stoic algorithmically analyzes each asset, looking at volatility, correlation, and other data. This quantitative research aims to maximize the chances of picking assets that are poised to continue on an upward trend.
- Rebalances regularly. Stoic also rebalances the portfolio every day. The algorithm evaluates each position and might sell assets to either cut lossees earlier or take profits.
Most importantly, Stoic’s algorithm helps users to get rid of emotional biases in their trading.
While building a portfolio shouldn’t be too complicated, it’s easy to get distracted by emotions. For example, when some assets start to surge, it’s hard to stay level-headed and avoid FOMO buying (the Doge mania was a prime example). And when prices plummet, it might be tempting to just hold, hoping the prices recover. Finally, it’s even more difficult to avoid panic-selling at the bottom.
Stoic’s rational approach to trading already delivered outstanding results.
Is Stoic safe?
Many prospective users put it bluntly: “is Stoic legit?” Well, Stoic is certainly legit. It was developed by Cindicator, a company that was founded in 2015 and entered the cryptocurrency industry in 2017. The team is public and has been through several cryptocurrency booms and busts while continuing to ship successful products.
Still, like with anything that has to do with cryptocurrency, Stoic is risky.
As always, the main risks in cryptocurrency are price volatility and security.
Security is the main priority for cryptocurrency exchanges. Right now, Stoic works exclusively with Binance, the world’s largest cryptocurrency exchange. Binance invests billions of dollars into secure cryptocurrency custody and in its years of operations, there were no breaches that affected user funds.
However, price volatility is unavoidable and that’s no exception for Stoic’s strategy. In fact, high volatility is what drives outsized returns in cryptocurrency. Stoic uses that to the user’s advantage without negative emotions: it aims to buy when prices are low (and everybody’s scared) and take prices when prices go up (and people become greedy).
Any potential user should understand that Stoic’s strategy does not guarantee any profits. However, it does its best to help the user reap the maximum benefits of the rising cryptocurrency market.
Stoic review: performance
First users joined Stoic even before the mobile app was released. Those brave traders connected the algorithm to their accounts in March 2020, amid one of the deepest corrections.
Since then, Stoic returned +2,120%, beating both the passive holding of Bitcoin as well as an equal-weighted portfolio of cryptocurrency assets.
As a long-only strategy with no shorting, Stoic works best in a bull market. This minimizes risks: shorting has theoretically unlimited downsize and liquidations of shorts are commonplace. For example, in April, cryptocurrency short-sellers lost nearly $1 billion in 24 hours.
Even without short-selling, Stoic’s built-in hedge function aims to soften the impact of market sell-offs. As a hedge, Stoic holds a portion of the portfolio in USDT stablecoins. This helps to reduce the magnitude of a drawdown in case of corrections. And after corrections, this provides Stoic with the funds to enter positions at heavy discounts.
Furthermore, the hedge setting is not static but responds to market conditions. When the algorithm views the market as overheated, it increases the USDT position to prepare for a possible sell-off. Similarly, after the prices go down, Stoic’s algorithm reduces the USDT share, using stablecoins to buy more cryptocurrency assets.
This approach has helped to significantly outperform BTC in the second quarter of 2021, which saw a 40% correction.
Stoic’s past performance is fully transparent and is available in the demo mode right after signing up. The balance on the chart above is from one of the team’s live accounts that have been running since March 2021.
With the latest update to the Stoic’s app, you can even compare your own performance to the Stoic portfolio.
Compare Stoic to your own trading
The Stoic app is capable of reading the user’s history of past transactions on Binance and analyzing the performance.
Stoic automatically builds a chart of the user’s balance and compares it to Stoic as well as Bitcoin and Crypto20, an equal-weighted index of the top 20 cryptocurrency assets.
It’s often said that everybody is a genius in a bull market. Yet it’s sobering to look at the actual trading result and compare it to a fully automated trading strategy. Given all the time and emotional energy spent on manual trading, connecting Stoic’s algorithm to an account seems like a no-brainer.
Try Stoic now and put your cryptocurrency trading on autopilot.