Risk of copy trading - 100K wallets

Idea:

If someone selected 100k wallets at random 3 months ago, calculated their return rate (profit or loss / investment) and selected the top 1k wallets to copy trade, what would be their outcome right now? We ran the numbers to find out.

Method:

After we calculate the profit and loss for all 100k wallets we filtered for minimum realised investment to be greater than $2.5k and selected the top 1k wallets based on return rate (profit or loss / investment) calculated at a time = 3 months ago.

We calculated the return rates of the top 1000 wallets if we had decided to copy trade them. We filtered the ones that had invested in (and later closed positions) > $500 in total over all trades for the past 3 months.

We found that 112 wallets out of 140 total number of wallets have generated positive returns. The median realised return was 89% and the average 178%

The biggest loss was at - 80% and the biggest gains at 1434%.

The average investment was $2093.

Caveats:

1. The profits were turned on shitcoins, with low liquidity and the average profitable wallet traded 22 tokens.
2. We haven’t taken liquidity into account but it is highly likely that copy trading these wallets might result in inability to exit many of the positions.
3. Gas fees were also not taken into account.
4. The analysis was produced in early September.

Data sources:

1. Dashboard using the same profit and loss formula as the one in the analysis - https://api.syve.ai/dashboards/pnl_checker/
2. API for profit and loss calculations - https://syve.readme.io/reference/latest-total-performance