For crypto owners with little to no trading experience, the Shrimpy Pro application is a simple and effective solution for managing crypto without the complicated bells and whistles. Unlike most complex crypto trading bots, Shrimpy Pro takes just minutes to set up!
Let’s walk through the steps to create and manage your own exchange-traded crypto index with Shrimpy Pro.
Create & Connect your API Key
Before we guide you through the steps of API trading, you will have to create an exchange API Key and connect it to the Shrimpy Pro App. Detailed instructions on how to link your exchange account to Shrimpy Pro can be found below. Simply select on the exchange you would like to link to Shrimpy Pro.
Linking Binance API Keys [Tutorial]
Linking Binance.US API Keys [Tutorial]
Linking Bittrex API Keys [Tutorial]
Linking Kraken API Keys [Tutorial]
Linking KuCoin API Keys [Tutorial]
Linking Huobi API Keys [Tutorial]
Linking Gemini API Keys [Tutorial]
Once you’ve linked your API keys, head on over to the Automation page to create your personal cryptocurrency index. Here’s where the fun of creating your crypto index begins.
Construct your Custom Cryptocurrency Index
You’ll have two options on how you’d like to construct your portfolio. You can choose to add crypto assets manually, or you can choose to use Shrimpy Pro's Index feature to automatically construct a portfolio based on selected preferences.
Market Cap Weighted Index
When creating a market-cap-weighted index, there are 3 main settings to consider: # of Assets, Minimum Asset %, and Maximum Asset %.
Choosing a market-cap-weighted index means the portfolio will be allocated based on the weight of each asset’s market cap relative to the other assets in the portfolio.
# of Assets sets the number of assets which will be included in the index. The assets included are selected by the highest market cap first, progressing to lower market cap assets.
Minimum Asset % determines the lowest allocation percentage that will be assigned to any asset in the portfolio. Due to the market being heavily weighted towards a few high cap assets, this can help prevent your index from maintaining an extremely small percentage of a single asset.
Maximum Asset % configurations are meant to serve as an upper boundary for the maximum risk exposure of a single crypto asset. This prevents a particular asset from consuming more of the index than you would desire.
To create an index that closely follows the market, you can:
- Increase # of Assets
- Decrease Minimum Asset %
- Increase Maximum Asset %
Equal-Weighted Index
Creating an equal-weighted index is even easier. Instead of having to choose the minimum and maximum allocation percentages, you now only have to select the total # of Assets you would like. Remember to "exclude" any assets that you do not want to be included in your portfolio.
To learn more about the effects of diversifying your crypto portfolio, we recommend reading the articles below that discuss portfolio diversity and optimal asset distribution.
Portfolio Diversity: A Technical Analysis
Optimizing Asset Distribution For Cryptocurrency Rebalancing
Dynamic Index
All crypto portfolios constructed using the Index feature will operate as a dynamic index. A dynamic index simply means that the weighting for each asset will be updated before every rebalance period. If an asset increases in price, the percent allocation for that asset in the index can then also increase. In addition to the weightings, if the positions of the assets in your index change, they will also be update. For example, say you created an index which holds the top 10 assets. If the 10th asset by market cap switches with the 11th, this will be updated in the index by removing the previous 10th asset and replacing it with the new 10th asset.
For additional information about each of these settings, please refer to the blog post which discusses each of these settings here:
https://blog.shrimpy.io/blog/automated-cryptocurrency-index-funds-personal-asset-management
You can also learn more about how to manage a cryptocurrency index fund in the following video: