Shrimpy vs 3Commas: An In-Depth Review
Just a few years ago, automated crypto trading was out of reach for everyday traders. Today, retail investors have dozens of automation tools at their disposal, ranging from simple crypto trading bots to sophisticated strategies.
In this post, we’ll review two popular yet different tools for automated crypto trading: Shrimpy and 3Commas. We’ll then see if Stoic can be an alternative solution.
What is Shrimpy?
Shrimpy was launched in 2018 to help traders track and rebalance crypto portfolios across multiple exchanges. Today, it’s a platform that integrates with over 30 cryptocurrency exchanges and wallets, both hardware and software.
Shrimpy offers several features for crypto portfolio management:
- Portfolio tracking across all the exchanges: Shrimpy connects to exchanges via API keys to automatically fetch balance. Additionally, users can also non-custodial wallets such as MetaMask and Trust Wallet by entering public keys and receive addresses for each asset. After that, the Shrimpy dashboard will show all assets in one place.
- Smart trade execution: After connecting all exchanges and wallets, users can smart assets across different exchanges using smart routing that automatically finds the best price. There are also 7-day forecasts based on machine learning algorithms (although there is no data regarding the accuracy of these forecasts).
- Social trading: Users can also automatically copy trades of other traders by following them. The most popular trader currently has 203 followers and a -14% return for the past month. The second trader by follower counts over the past month has returned +93%. Some subscriptions are free while others charge either a fixed fee or a percentage of assets under management or performance.
- Automatic rebalancing: Most importantly, users can set up automation to rebalance the whole portfolio according to their rules.
This automating rebalancing feature is Shrimpy’s main selling point so it’s worth going into more details.
Shrimpy rebalancing strategies
To automatically rebalance their portfolios, users must define a number of parameters.
The first choice is the automation mode: pick assets manually or build an index. If you pick the assets, then you’ll need to select weights and rebalancing rules, either based on a period (e.g. every week) or threshold weights.
For index strategies, there are more choices:
- Weighting method: Market cap, square root of market cap (to more evenly distribute weights), or equal weights.
- Asset range: For example, assets ranked 1-10 or 50-100 by market cap.
- Asset type: Assets grouped by some themes, such as Defi or Polygon assets.
- Include/exclude assets: this is self-explanatory, you can specifically include or exclude some assets.
- Rebalance Strategy: Periodiotic (e.g. every week) or based on hitting a threshold.
There is also an option to use a stop loss, which would convert assets to a user-defined stablecoin or BTC if the percentage portfolio return would hit a threshold.
There is also a basic backtesting tool that can automatically compare a passive hold of the portfolio with defined weights to the same portfolio if rebalanced every few days, weeks, or months. This backtesting, however, cannot compare how several portfolios would compare.
Because each user defines their automated portfolio on Shrimpy, it’s hard to evaluate the overall profitability.
The backtesting tool might be helpful to understand how your portfolio would work. Simply define your portfolio and click ‘run’ to see the results.
Shrimpy connects to exchange accounts via APIs. The API keys are encrypted and stored using FIPS 140-2 validated hardware security modules.
There is also an option to whitelist IP addresses, restricting access to API exclusively to Shrimpy’s IP addresses. If this is enabled, then even if the API keys are stolen, the attacker would not be able to use the keys.
Finally, Shrimpy only requires read and trade API access. Withdrawals are usually disabled, so the API keys cannot move your assets from an exchange.
Additionally, Shrimpy encourages users to store some assets on cold wallets away from exchanges. Shrimpy’s rebalancing would take these assets into account but would not trade them.
Shrimpy’s supported platforms
Shrimpy integrates with over 30 crypto exchanges and offline wallets. This includes Binance, Bitfinex, FTX, Kraken, Coinbase Pro and other popular exchanges.
There are several monthly plans on Shrimpy. The cheapest one is Starter, which costs $19 a month and includes all the features yet limits the number of exchanges to 5 and the number of portfolios to 3. The data is refreshed every 15 minutes.
A Professional plan costs $79 a month and has higher limits.
Finally, an Enterprise plan costs $299 and enables up to 25 exchanges and 10 accounts.
Now that we’ve reviewed Shrimpy, let’s turn to 3Commas, another popular tool for automated crypto trading.
What is 3Commas?
3Commas launched in 2017 as a platform for automated crypto trading with smart execution.
Like Shrimpy, 3Commas connects to crypto exchanges via API. After that, the user can execute trades across any exchanges right from the 3Commas terminal.
While Shrimpy appears to be tailored towards portfolio investors, 3Commas is clearly built for traders. There are lots of options for smart trading, including advanced orders with conditions, trailing buys and more. To a newbie trader, this might be overwhelming.
Crypto trading bots on 3Comams can use two main strategies:
- DCA bots, which buy (or sell) a cryptocurrency (or several) regularly based on specified rules and conditions. The main idea is to get a better average price when riding a long-term trend.
- Grid bots, which buy when the price is low and sell when it’s high based on rules specified by the user or AI.
DCA stands for dollar-cost averaging, which means buying an asset for a fixed dollar amount at a regular interval (for example, every week). This helps to minimize the risk of buying with a lump sum at a local high.
On 3Commas, there are lots of additional settings and even an option to short. A short DCA would sell the asset that you already hold and would then aim to rebuy it at a lower price, generating a profit in a downtrend.
Meanwhile, grid bots try to take advantage of volatility in a specific trading pair. The grid bot would trade in a user-defined range, buying low and selling high. The main difficulty is identifying a trading pair with enough volatility and a sideways trend. If the trend turns bullish, the crypto bot would end up without a position. And if the trend would become bearish, it would end up holding a position with a loss.
It is hard to estimate profitability because crypto trading bots are created based on user settings.
Bot presets show profitability for the previous month. Clicking on the crypto bot’s card also reveals daily profit.
However, a month of data is not enough to reach a conclusion. Furthermore, sorting crypto trading bots by profitability gives rise to survivorship bias: only the most profitable bots show up at the top while the long-tail of less impressive or loss-making bots is ignored.
Like Shrimpy, 3Commas connects to crypto exchanges via API, which can only read and trade but not withdraw assets. Your crypto remains on exchanges, which are ultimately responsible for its custody.
There are several plans that range from free (which includes one DCA bot and one grid crypto bot) to $99 a month with unlimited features.
3Commas supported platforms
Currently, 3Commas works with over 20 different cryptocurrency exchanges, including Binance, FTX, Coinbase, and more.
Shrimpy vs 3Commas at a glance
To sum up, Shrimpy will appeal to long-term investors while 3Commas will suit advanced traders. Yet both platforms demand a significant level of skills.
Ideally, Shrimpy users should have a good understanding of what crypto portfolio they want to invest in based on fundamental research. If you know how much of each cryptocurrency to hold for the long term, then Shrimpy can automate rebalancing and maintain target weightings on autopilot.
Similarly, traders on 3Commas should be experienced at picking the right kind of crypto bot for the right trading pair at the right time. The trader would still need to research the market and monitor the bots to ensure that settings still fit market conditions. The main value of 3Commas is in automating repetitive, time-consuming trading tasks and doing that 24/7.
The Alternative to Shrimpy and 3Commas: Stoic
For people who want a passive way to invest in crypto without doing fundamental research, Stoic might be the answer.
Stoic uses quant research and AI to automatically build and rebalance a long-only portfolio of altcoins. Stoic’s algorithm assigned portfolio weights based on a combination of market cap and momentum, i.e. how likely the asset to continue trending upwards. And when the asset has run its course, Stoic sells it to take profit and allocate to assets that are more likely to go up in price.
Like 3Commas and Shrimpy, Stoic connects to a crypto exchange via API, so assets never leave your exchange account. Currently, Stoic works on Binance.com and Binance US.
The result is a completely hands-off approach to investing in crypto. Just connect Stoic to your account and it will automate everything else.
From March 2020 until September 2021, Stoic’s algorithm has generated a return of +2,189%, beating Bitcoin and most other benchmarks.
The minimum required balance to start Stoic is just $1,000. The price is an annual fee of 5% of the starting balance. So if starting with the minimum balance, the price is just $50 for a full year.