Is it possible to make passive income from cryptocurrency? In this article, we will use a bot to trade the cryptocurrency market and hopefully make some decent passive income from it.

It is not a set and forget bot, we have to follow it up a couple of times a week to check that it is running as it should and keeping it up to date with latest releases.

Cryptocurrency Bot

The automated trading process will be done by using a bot called ProfitTrailer.

Long Term Perspective

This will take time and the results will depend on the market. In a bear market, the aim is to minimize the losses.

In a bull market we want to increase the funds the bot is trading with to make as high ROI as possible.

Market Liquidity

To minimize risk we will be trading coins that have at least $2m daily trading volume.

In order to trade as many pairs as possible we are trading on Binance, one of the largest cryptocurrency exchanges in terms of volume.

Starting Capital

The bot is trading with 200$ divided by the number of coins it is trading. Max total coins at the same time is 10. So 200$ / 20 = 20$.

The bot is trading 10% of the total value on each coin, so the starting capital will grow/shrink accordingly since we are compounding the trades.

Results – November 2019

Posted on: 16th of November

Trading started of with a lot of volatility in November and thing were looking good. The bot was doing a lot of profitable trades but that has taken a bearish turn and we are now running a small loss.

This is not surprising considering the state of the cryptocurrency market. You will be hard pressed to find profitable bot that go long (betting on the price going up) in the current market conditions.

The winners are the bears and a short bot (betting on the price going down) would be profitable.

However, looking at the trades below you can see that we have 9 winnings days versus 5 losing days.

Again, it is early days and allthough it has been more passive expenditure than passive income so far, the market will (eventually) tick to the upside and we have a better chance of making a decent profit.

Date Buys Cost Sells Value Profits
16-Nov 0 0.00 0 0.00
15-Nov 2 39.98 3 40.11 $0.05
14-Nov 8 157.96 8 158.64 $0.36
13-Nov 4 79.60 4 80.18 $0.42
12-Nov 2 39.76 2 40.13 $0.28
11-Nov 6 119.25 6 119.13 $0.35
10-Nov 0 0.00 0 0.00
9-Nov 2 47.08 2 47.12 $0.05
8-Nov 11 232.41 13 229.10 $3.77
7-Nov 14 278.06 14 276.95 $1.67
6-Nov 12 226.95 12 228.65 $1.25
5-Nov 7 161.42 8 161.89 $0.14
4-Nov 8 137.20 7 138.73 $1.25
3-Nov 11 275.48 16 274.58 $1.45
2-Nov 8 100.97 5 101.87 $0.70
1-Nov 5 119.00 6 119.49 $0.25
$2.59

Posted on: 23rd of November

The last week of trading has been slow, which is to be expected considering the cryptocurrency market is plummeting down. There has been no trades since the 20th of November.

The bot is set up to only trade when we are in a bullish trend so the next couple of weeks might not see too much action.

Even though market sentiment is bearish the bot managed to make 0.2% of passive income since the last update, without fees. We are talking insignificant amounts, but all that matters are that we are in the green.

As you see from the table below, there is not much money being traded.

For those of you familiar with how this market works, you know that the correlation is tied up to one currency; Bitcoin, which is down 35-40% in the last four weeks.

We are going to have to wait it out for a bullish trend.

Date  Buys  Cost  Sells  Value Profits
23-Nov 0 0.00 0 0.00
22-Nov 0 0.00 0 0.00
21-Nov 0 0.00 0 0.00
20-Nov 0 0.00 0 0.00
19-Nov 2 60.10 3 59.51 $0.71
18-Nov 5 78.36 4 78.92 $0.40
17-Nov 2 40.04 2 40.25 $0.13
16-Nov 1 19.98 1 20.23 $0.21
$0.04

Posted on: 1st of December

November was not a good month for trading with Bitcoin down around 20% for the month, bringing altcoins with it. Still, we managed to just about break-even which is an achievement in it self.

The total money made for November is $0.75, meaning we lost money.

Without the fees we made $5 of passive income. If we take into account that the sentiment in the cryptocurrency market has been very bearish for the last month, we have actually done quite well.

Further more, the bot had 17 winning days in November versus only 8 losing days.

There are opportunities to make this work in this space, we just have to be patient and let the trades come to us. With a few more tweaks to the bot and a bullish market we will be making money.

Find complete results for November 2019 in the table below.

Date Buys Cost Sells Value Profits
30-Nov 8 156.30 8 155.87 $0.74
29-Nov 4 139.07 7 139.99 $0.64
28-Nov 4 20.16 1 20.23 $0.03
27-Nov 1 20.08 1 21.01 $0.89
26-Nov 2 40.07 2 40.78 $0.63
25-Nov 1 20.03 1 20.03 $0.04
24-Nov 2 39.97 2 40.46 $0.41
23-Nov 0 0.00 0 0.00
22-Nov 0 0.00 0 0.00
21-Nov 0 0.00 0 0.00
20-Nov 0 0.00 0 0.00
19-Nov 2 60.10 3 59.51 $0.71
18-Nov 5 78.36 4 78.92 $0.40
17-Nov 2 40.04 2 40.25 $0.13
16-Nov 1 19.98 1 20.23 $0.21
15-Nov 2 39.98 3 40.11 $0.05
14-Nov 8 157.96 8 158.64 $0.36
13-Nov 4 79.60 4 80.18 $0.42
12-Nov 2 39.76 2 40.13 $0.28
11-Nov 6 119.25 6 119.13 $0.35
10-Nov 0 0.00 0 0.00
9-Nov 2 47.08 2 47.12 $0.05
8-Nov 11 232.41 13 229.10 $3.77
7-Nov 14 278.06 14 276.95 $1.67
6-Nov 12 226.95 12 228.65 $1.25
5-Nov 7 161.42 8 161.89 $0.14
4-Nov 8 137.20 7 138.73 $1.25
3-Nov 11 275.48 16 274.58 $1.45
2-Nov 8 100.97 5 101.87 $0.70
1-Nov 5 119.00 6 119.49 $0.25
132 $2,649 138 $2,654 $0.75

Results – December 2019

Posted on: 7th of December

December has started out very well even though the market is not doing much in either direction. The bot is not doing many trades but they are profitable as you see from the statistics below.

So far in December the bot has only bought coins for 451.9$ and sold them for a total of 455.6$ which has made us 0.81% of passive income. Not bad percentage wise.

The goal for the rest of the year is, of course, to keep this winning trend going. We will not be doing any changes to our buy and sells settings since we are already making profit.

The cryptocurrency market is still bearish with little liquidity, there is a chance that we will be heading for another leg down, to where it was at the start of the year, below 6000$.

For us, that means less trading and less activity in the short term. But as always, let us focus on the bigger picture and the market will eventually turn around.

If you like to know more about this project you can check out the latest video on Youtube.

Date Buys Cost Sells Value Profits
6-Dec 3 61.18 3 62.00 $0.70
5-Dec 0 81.53 4 81.13 $0.56
4-Dec 6 40.63 2 42.08 $1.37
3-Dec 2 28.22 1 28.34 $0.06
2-Dec 4 81.06 4 81.31 $0.09
1-Dec 8 159.32 8 160.76 $1.12

Posted on: 15th of December

The last week has seen some choppy action but we are still in an upward trend even though the Cryptocurrency market is heading the other way.

So how did we do?

The bot has made 0.24% of passive income since the last update. We are still making positive ROI on our investment.

Ideally, we would like the interest to be higher, then again, we are not losing any money which is what most traders and bots do in a bear market.

From the table below you can see that we have losing days when there is a big sell-off in Bitcoin. Is there a way to avoid this problem?

Not really. The correlation between Bitcoin and altcoins is unaviodable. We just have to make sure we lose as little as possible when Bitcoin dumps.

In summary, this month has been good for us so far and we have earned some interest on our trades.

Have a look at the video below for more statistics.

Date Buys Cost Sells Value Profits
14-Dec 4 71.60 3 73.01 $1.26
13-Dec 1 20.32 1 20.35 $0.01
12-Dec 4 81.13 4 81.76 $0.46
11-Dec 0 0.00 0 0.00
10-Dec 8 156.74 8 155.68 $1.37
9-Dec 4 81.71 4 81.66 $0.21
8-Dec 3 81.51 4 81.73 $0.06
7-Dec 2 20.41 1 20.48 $0.03

Posted on: 1st of January

The results for December are in and although the month was boring for cryptocurrencies in general, the bot ended up with a decent profit.

This is mostly due to Bitcoin trading sideways for the entire month, which is the best trading environment for the strategy we are using.

Adding it all up, the bot bought for $2120 and sold for $2127. That leaves us with a profit of 0.34% without fees for December.

What is the conclusion after running this project for 2 months?

We are making passive income, not big gains but progress is steady. May it continue, *knock on wood*.

It is to early to conclude if this is a winning strategy. We need to run the bot a few more months when volatility picks up. If we are still profitable come spring, then we are on the right track.

Here is to a booming 2020. Results in table below.

Date Buys Cost Sells Value Profits
31-Dec 3 93.13 3 93.98 $0.65
30-Dec 7 217.17 7 217.24 $0.37
29-Dec 1 31.02 1 31.64 $0.55
28-Dec 1 31.03 1 31.01 $0.08
27-Dec 1 62.01 2 62.17 $0.04
26-Dec 2 31.05 1 30.91 $0.20
25-Dec 3 93.32 3 93.27 $0.24
24-Dec 2 93.29 3 93.24 $0.23
23-Dec 6 150.61 5 151.63 $0.72
22-Dec 0 0.00 0 0.00
21-Dec 1 31.06 1 30.73 $0.39
20-Dec 0 0.00 0 0.00
19-Dec 2 62.19 2 62.19 $0.12
18-Dec 2 62.01 2 62.57 $0.43
17-Dec 2 61.90 2 62.49 $0.47
16-Dec 3 93.17 3 92.63 $0.73
15-Dec 1 62.06 2 61.87 $0.31
14-Dec 4 71.60 3 73.01 $1.26
13-Dec 1 20.32 1 20.35 $0.01
12-Dec 4 81.13 4 81.76 $0.46
11-Dec 0 0.00 0 0.00
10-Dec 8 156.74 8 155.68 $1.37
9-Dec 4 81.71 4 81.66 $0.21
8-Dec 3 81.51 4 81.73 $0.06
7-Dec 1 0.00 0 0.00
6-Dec 3 61.18 3 62.00 $0.70
5-Dec 0 81.53 4 81.13 $0.56
4-Dec 6 40.63 2 42.08 $1.37
3-Dec 2 28.22 1 28.34 $0.06
2-Dec 4 81.06 4 81.31 $0.09
1-Dec 8 159.32 8 160.76 $1.12
85 $2119 84 $2127 $3.16

Results – January 2020

Posted on: 12th of January

It has been a rough start to January. The market is up but the bot has not been returning the results I was hoping for.

I won’t blame the bot, rather it is me who have been tinkering with the settings and the initial cost per trading pair.

The bot was set up to hold max 7 trading pairs at a time and the cost per pair at 8%. After the 8th of January I changed it to max pairs of 3 and cost per pair to 20%.

The reasoning behind it is to avoid losses on all coins when Bitcoin drops, like it did on the 8th.

Admittedly, this strategy didn’t work.

Why?

The bot buys the coins that drop first, usually these coins are losing trades and the laggards that drop later are winners.

This means I have changed the strategy to the following:

  • Max total pairs the bot can hold = 10.
  • Cost per pair = 9%-10% of total capital.

There are many ways to solve this puzzle. So far the bot has returned a small profit over nearly 3 months. However, the goal is to make steady passive income. We are on the right track, but there is still some ways to go.

Results below with a deficit of 0.10% so far in January.

Date Buys Cost Sells Value Profits
11-Jan 3 0.00 0 0.00
10-Jan 2 90.68 2 90.65 $0.21
9-Jan 4 153.21 4 153.02 $0.50
8-Jan 12 368.95 12 367.34 $2.35
7-Jan 13 401.00 15 403.73 $1.92
6-Jan 0 147.82 5 148.11 $0.00
5-Jan 9 113.35 4 113.94 $0.36
4-Jan 1 31.12 1 31.22 $0.05
3-Jan 1 62.23 2 62.16 $0.20
2-Jan 3 62.38 2 62.41 $0.10
1-Jan 0 0.00 0 0.00

POSITIVES

  • The bot has returned a profit over 3 months of trading.
  • Strategy is OK. Might be winning in the long run.

NEGATIVES

  • Correlation between Bitcoin and altcoins.

Posted on: 25th of January

This month has been indifferent, the bot is running at break even, again. Without fees it would have positive ROI of 0.15%.

There are still issues to iron out, I am constantly trying to find the optimal settings.

Losses happen all the time, but as I have previously mentioned – the goal is to minimize those losses.

One way to solve this is to only trade the most popular cryptocurrencies. I have tried to trade all coins – and trust me – it does not work.

I will post a detailed table of all trades and results for January next week. In the meanwhile, have a look a picture below and you see that it has been up and down with little progress.

*On a side note, there other ways to passively earn income in cryptocurrency – eg. lending, staking, dapps etc. These are options that might give you profit, but in this type of market I would definitely not put my money on it.

Automated-Trading-Cryptocurrency

Posted on: 7th of February

Indifferent results in January. As you can see from the results below, ProfitTrailer suffered a small loss on the month as a whole.

I will admit, I was hoping for a lot better results considering cryptocurrencies were in an uptrend for most of the month.

What is most notable is the amount of days the bot was not trading.

You can also see the bot is winning if we diregard the fees. However, with fees the story is different.

I have done some further changes to the settings and February has started very well. More about those results in the next update.

Date Buys Cost Sells Value Profits
31-Jan 10 192.35 8 192.02 $0.72
30-Jan 0 61.05 3 61.26 $0.09
29-Jan 4 21.64 1 21.87 $0.19
28-Jan 4 86.46 4 87.02 $0.39
27-Jan 0 0.00 0 0.00
26-Jan 0 0.00 0 0.00
25-Jan 0 0.00 0 0.00
24-Jan 0 0.00 0 0.00
23-Jan 0 0.00 0 0.00
22-Jan 2 43.16 2 43.32 $0.08
21-Jan 1 21.56 1 22.18 $0.57
20-Jan 0 0.00 0 0.00
19-Jan 10 228.24 12 225.80 $2.89
18-Jan 7 126.63 6 127.61 $0.73
17-Jan 6 104.34 5 105.34 $0.79
16-Jan 10 204.96 10 203.44 $1.92
15-Jan 3 65.14 3 67.03 $1.75
14-Jan 3 62.71 3 63.87 $1.04
13-Jan 2 38.98 2 39.38 $0.32
12-Jan 0 135.95 3 135.68 $0.54
11-Jan 3 0.00 0 0.00
10-Jan 2 90.68 2 90.65 $0.21
9-Jan 4 153.21 4 153.02 $0.50
8-Jan 12 368.95 12 367.34 $2.35
7-Jan 13 401.00 15 403.73 $1.92
6-Jan 0 147.82 5 148.11 $0.00
5-Jan 9 113.35 4 113.94 $0.36
4-Jan 1 31.12 1 31.22 $0.05
3-Jan 1 62.23 2 62.16 $0.20
2-Jan 3 62.38 2 62.41 $0.10
1-Jan 0 0.00 0 0.00
110 $2823 110 $2828 $1.15

Results – February 2020

Posted on: 13th of February

February has started better than I could have imagined. ProfitTrailer is already up just about 10$ for the month.

This is obviously due to the bullish sentiment we have seen for pretty much all of 2020. Still, it is nice to be back to winning ways and making a few dollars.

I am not holding my breath for the first big drop, it will get ugly but I am hoping that these wins will outweigh the inevitable future losses.

Here is brief look at strategy and settings.

Strategy:

  • The bot is only buying in a bullish market. Eg, USDT + 2% for the last 24 hours.
  • I am currently combing RSI with EMA/SMA.

I won’t go into details with regards to the specifics for the strategy. There are many nutcases out there who takes this as trading advice and blame those who gave them the settings/strategies. I don’t want to get involved.

As you see from the results in the image below, there are many more buys than sells. This is beacuse I implemented Dollar Cost Average (DCA). ProfitTrailer is buying at -1.5% -2.8% and -5%. Let us see how it works out.

ProfitRTrailer Profit Februrary 2020

Results – March 2020

Posted on: 23rd of March

To say that things are not going well is an understatement in these times.

Thankfully I stopped the bot in the beginning of March. It is pure luck that I didn’t go down in that 40-50% drop.

I am currently running it in testmode on Binance Futures with 4-5 leverage. I invested the all the money I had in Monero at an average price of 50$. So I am stuck until it reaches back up to 50.

I will post the results from testmode as soon as I can.

Results – June 2020

Posted on: 21st of June

A short and quick update. As you may have noticed there has been a while since the last update. The reason is obviously the market conditions. The bot has been turned off for a few months.

This may change when things pick up, hopefully by some time in summer or autumn. See you then.