Coins: 14,019
Exchanges: 1,065
Market Cap: $2.468T 2.6%
24h Vol: $100.039B
Gas: 34 GWEI
Go Ad-free
Sponsored Content
TABLE OF CONTENTS

A Quick Guide to eToro’s Latest: TheTIE-LongOnly CopyPortfolio

by Ian Lee

eToro USA LLC is a publishing partner of CoinGecko

In our previous review of the eToro platform, we looked at its unique strength of copy and social trading. eToro is, after all, the world’s first social trading platform, and its copy trading functionality is probably the most intuitive and user-friendly out there.

Now, eToro has gone one step further. Not only can you copy the trades of other traders, the platform now gives you the ability to mimic a portfolio selected by a proprietary sentiment analysis algorithm. This portfolio is called TheTIE-LongOnly CopyPortfolio.

In this brief guide, we will dive into the details of this innovative new feature — what it is, how it works, and what you need to know before copying.

 

What is TheTIE-LongOnly CopyPortfolio and How Does it Work?

TheTIE-LongOnly CopyPortfolio is a portfolio that eToro’s users can elect to copy. Its composition is determined by using advanced machine learning and natural language-processing algorithms to analyse Twitter’s crypto market sentiment. “Long Only” means the strategy is to only buy (i.e. go long on) specific crypto assets — there is no shorting or hedging involved.

Here’s how it works:

The algorithm individually scans every tweet (over 850 million of them daily), extracts the ones related to crypto, and then assigns each tweet a “ sentiment score.” The sentiment score reflects a summation of the tone of all the conversations surrounding each crypto (e.g. how positive or negative they are). Of course, given the nature of the crypto market, the algorithm also takes extensive steps to filter out crypto-related tweets that are gauged to be part of attempts to influence or manipulate prices. This helps separate the signal from the noise.

Once a crypto is determined to have hit certain thresholds based on sentiment score and tweet volume, it may be allocated to a long (buy) position based on quantitative models. Currently, the portfolio will only trade in the following 13 cryptocurrencies:

 

 

Out of these 13, a minimum of three will always be held by the portfolio. The portfolio is suggested for rebalanced on a monthly basis — using the above data. The data is sent to the eToro Investment Committee for review and approval, after which a rebalance occurs.

Here’s a visual representation of the four-step sentiment analysis process:
 


 


 


 


 

The above is a highly simplified explanation of how the sentiment analysis algorithm works. For more in-depth information, you can check out The TIE’s FAQ post here.

 

Who is The TIE?

The TIE is a data solutions provider for institutional digital asset traders. Its speciality is building algorithmic trading models for cryptos, with the underlying data often being crowd-sourced. While its primary client base is institutional traders, its partnership with eToro for the CopyPortfolio will, for the first time, give retail traders and individuals access to the same tools used by the big players in the market. Retail traders now get the rare opportunity to benefit from algorithmic trading programs typically only available to institutional traders.

 

How Can I Invest in TheTIE-LongOnly CopyPortfolio?

Any eToro user can trade in the portfolio. The only requirement is a minimum trade amount currently set at $2,000. There is no lock-in period, and you can withdraw your funds at any time, as per eToro’s usual withdrawal policies.

Simply visit this page and click “Invest”. You can also see the current portfolio composition and all relevant stats.

This will bring up the following pop-up.

You also set a stop loss point to manage your risks.

 

Does Sentiment Analysis in Crypto Work?

Only time will tell how the portfolio performs over the long term. That said, there is some evidence from the crypto markets of the efficacy of momentum trading strategies—which sentiment analysis could be considered a subset of—in crypto markets.

In July 2018, Yale economic researchers Yukun Liu and Aleh Tsyvinski released a paper that showed a prevailing momentum effect in three of the largest cryptos—Bitcoin, Ethereum, and Ripple. As the paper concluded:

“We show that the cryptocurrency returns can be predicted by factors which are specific to cryptocurrency markets. Specifically, we determine that there is a strong time-series momentum effect and that proxies for traders attention strongly forecast cryptocurrency returns.

 All these point to the following conclusion.

 

Conclusion: TheTIE-LongOnly CopyPortfolio Provides a Unique Way to Invest in Crypto, Using the “Wisdom of the Crowd.”

There’s no right way to trade in crypto, and what The TIE has shown us is that utilizing listening technology can offer interesting and, perhaps, promising results. If you believe in the wisdom of the crowd, this could be your CopyPortfolio.

 

eToro USA LLC is a publishing partner of CoinGecko.

CoinGecko's Content Editorial Guidelines
CoinGecko’s content aims to demystify the crypto industry. While certain posts you see may be sponsored, we strive to uphold the highest standards of editorial quality and integrity, and do not publish any content that has not been vetted by our editors.
Learn more
Tell us how much you like this article!
Ian Lee
Ian Lee

Ian Lee is a freelance writer specializing in the areas of finance and all things crypto. He also has over five years of experience in investment banking. Follow him at Ian Lee.

More Articles


Explore Polkadot's Ecosystem
Discover trending dApps, wallets, DeFi & more

What is Zeebu?
Learn more about the Web3 neobank


coingecko
Continue in app
Track prices in real-time
Open App
Select Currency
Suggested Currencies
USD
US Dollar
IDR
Indonesian Rupiah
TWD
New Taiwan Dollar
EUR
Euro
KRW
South Korean Won
JPY
Japanese Yen
RUB
Russian Ruble
CNY
Chinese Yuan
Fiat Currencies
AED
United Arab Emirates Dirham
ARS
Argentine Peso
AUD
Australian Dollar
BDT
Bangladeshi Taka
BHD
Bahraini Dinar
BMD
Bermudian Dollar
BRL
Brazil Real
CAD
Canadian Dollar
CHF
Swiss Franc
CLP
Chilean Peso
CZK
Czech Koruna
DKK
Danish Krone
GBP
British Pound Sterling
GEL
Georgian Lari
HKD
Hong Kong Dollar
HUF
Hungarian Forint
ILS
Israeli New Shekel
INR
Indian Rupee
KWD
Kuwaiti Dinar
LKR
Sri Lankan Rupee
MMK
Burmese Kyat
MXN
Mexican Peso
MYR
Malaysian Ringgit
NGN
Nigerian Naira
NOK
Norwegian Krone
NZD
New Zealand Dollar
PHP
Philippine Peso
PKR
Pakistani Rupee
PLN
Polish Zloty
SAR
Saudi Riyal
SEK
Swedish Krona
SGD
Singapore Dollar
THB
Thai Baht
TRY
Turkish Lira
UAH
Ukrainian hryvnia
VEF
Venezuelan bolívar fuerte
VND
Vietnamese đồng
ZAR
South African Rand
XDR
IMF Special Drawing Rights
Cryptocurrencies
BTC
Bitcoin
ETH
Ether
LTC
Litecoin
BCH
Bitcoin Cash
BNB
Binance Coin
EOS
EOS
XRP
XRP
XLM
Lumens
LINK
Chainlink
DOT
Polkadot
YFI
Yearn.finance
Bitcoin Units
BITS
Bits
SATS
Satoshi
Commodities
XAG
Silver - Troy Ounce
XAU
Gold - Troy Ounce
Select Language
Popular Languages
EN
English
RU
Русский
DE
Deutsch
PL
język polski
ES
Español
VI
Tiếng việt
FR
Français
PT
Português
All Languages
AR
العربية
BG
български
CS
čeština
DA
dansk
EL
Ελληνικά
FI
suomen kieli
HE
עִבְרִית
HI
हिंदी
HR
hrvatski
HU
Magyar nyelv
ID
Bahasa Indonesia
IT
Italiano
JA
日本語
KO
한국어
LT
lietuvių kalba
NL
Nederlands
NO
norsk
RO
Limba română
SK
slovenský jazyk
SL
slovenski jezik
SV
Svenska
TH
ภาษาไทย
TR
Türkçe
UK
украї́нська мо́ва
ZH
简体中文
ZH-TW
繁體中文
Login to track your favorite coin easily 🚀
By continuing, you agree to CoinGecko Terms of Service and acknowledge you’ve read our Privacy Policy
or
Forgot your password?
Didn't receive confirmation instructions?
Resend confirmation instructions
IT'S FREE! Track your favorite coin easily with CoinGecko 🚀
By continuing, you agree to CoinGecko Terms of Service and acknowledge you’ve read our Privacy Policy
or
Password must contain at least 8 characters including 1 uppercase letter, 1 lowercase letter, 1 number, and 1 special character
Didn't receive confirmation instructions?
Resend confirmation instructions
Forgot your password?
You will receive an email with instructions on how to reset your password in a few minutes.
Resend confirmation instructions
You will receive an email with instructions for how to confirm your email address in a few minutes.
Get the CoinGecko app.
Scan this QR code to download the app now App QR Code Or check it out in the app stores