The Shrimpy application doesn’t specifically allow this feature, but there is a trick we could use in order to accumulate assets on Shrimpy by taking advantage of the blacklisting feature!
Whether you are a BTC maximalist or simply want to take profits whenever the market moves upwards, Shrimpy now has a new feature that can work for you.
We all know that blacklisting allows you to specify which assets Shrimpy should ignore during trades. This can also be set so that only part of an asset is not traded. If you wanted to blacklist .5BTC of 1BTC, it will only trade as if it has .5BTC available for rebalancing.
Blacklisting can also be used for another function; accumulation. This is done by inputting a blacklist while still maintaining an allocation percentage.
Example: Set an amount you would like to accumulate in USDT. We can use 100 USDT for this example. Next, set a small percent allocation of USDT. We can use 1% in this example.Result: Every rebalance will buy USDT until you own 100 USDT + 1% of your total portfolio in USDT. Then, raising the USDT blacklist to 200 USDT, will accumulate more USDT.
The steps to accumulate an asset are then reduced to these 4 simple steps.
- Step 1: Blacklist an asset you wish to accumulate.
- Step 2: Allow assets to deviate.
- Step 3: Rebalance in order to accumulate more of the blacklisted asset.
- Step 4: Increase the blacklisted amount.
We can visualize these steps by illustrating how blacklisting would look in an active portfolio on Shrimpy.
This figure demonstrates the accumulation process. By cycling between blacklisting, allowing the assets to deviate, and rebalancing, the desired asset is accumulated over a number of rebalances.
Conversely, a bear market will allow the opposite. If you have been accumulating assets for some time and you now want to inject funds back into your portfolio since there is a bear market, you can do the opposite of the above steps. You will perform the opposite of the steps, as follows:
- Step 4: Un-blacklist some of the blacklisted asset.
- Step 3: Rebalance to inject funds into your portfolio.
- Step 2: Allow assets to deviate.
- Step 1: Un-blacklist more of the asset
Repeat this process as you want to distribute more funds into your portfolio.
You now have an effective system to accumulate an asset. When the market goes up, you can accumulate the base asset (USD for example). Then, by resetting the blacklist to a slightly higher value, those gains are locked in. When the market goes down, you can then utilize the excess USD to inject funds into the rest of the portfolio. This process can be continued as the market oscillates.
Buy low; sell high.
Shrimpy is introducing two different things with the release of blacklists. The first is the ability to simply exclude assets from rebalancing. This means that users can now have an amount either on the exchange or in an external wallet that is excluded at the time of rebalancing.
The second thing this release introduces is the ability to accumulate via blacklisting. While this strategy may be more advanced, it presents an opportunity for users that was previously not available on Shrimpy. It allows users to add intricacies to their strategies if they desire, without affecting the general usability of the application by overcomplicating the UI for newer users.
Disclaimer: Assets and strategies mentioned throughout this article are for example purposes only. It is not intended to be investment advice.