Uncovering Alpha in Crypto: A Smart Beta Case Study Using GenieAI

Generating consistent alpha in digital assets requires structure, discipline, and a systematic approach to identifying and acting on market signals.

In this case study, we explore how portfolio managers used Smart Beta strategies built with GenieAI's AI agents to outperform major benchmarks like Bitcoin and Bitwise 10. By applying factor-based asset selection and systematic rebalancing, investment teams achieved high-performing, rules-based portfolios.

The Premise: Can Smart Beta Beat Bitcoin?

Using GenieAI’s multi-factor screening and backtesting agents, we tested three long-only strategies from January 2023 to May 2025:

(1) Top 5 by 30D Sortino Ratio + Volume

(2) Top 5 by Market Cap + Volume (assets ≥ $1B)

(3) Top 5 by Market Cap + Volume (assets ≥ $100M)

Each strategy was evaluated with weekly and daily rebalancing and benchmarked against BTC and the Bitwise 10 Index (BITW).

Key Findings

The case study shows that Smart Beta crypto strategies built with GenieAI’s factor-based models and daily rebalancing can significantly outperform benchmarks like BTC and BITW. The top-performing strategy, using 30-day Sortino and volume, achieved a 15.7x return—over 2.5x BTC’s performance—while market-cap-filtered strategies also saw major improvements. Daily rebalancing consistently enhanced both absolute and risk-adjusted returns, and applying filters for large-cap assets improved stability and Sharpe ratios.

Implications for Asset Managers

These results show that systematic Smart Beta investing in crypto can deliver significant outperformance. With GenieAI, managers can:

(1) Build rules-based, explainable strategies tailored to their investment views

(2) Screen assets by dozens of market, risk, and fundamental factors

(3) Backtest with configurable rebalancing and analyze performance across time

(4) Operate independently of data engineering or quant development teams

This enables faster strategy iteration, greater transparency, and scalable research processes—all within a unified platform.

What’s Next?

To read the full case study, please visit this link.

Build Your Own Smart Beta Strategy

This analysis shows that a thoughtful, data-driven approach to asset selection and rebalancing can uncover alpha—even against hard-to-beat benchmarks like BTC. With GenieAI, managers can build and scale strategies with precision and speed.

Request a demo to explore GenieAI’s Portfolio Construction & Backtesting tools.

Disclosures

This content is for informational purposes only and does not constitute financial advice. GenieAI is a technology provider, not a Registered Investment Advisor. Past performance is not indicative of future results, and investors should conduct their own research and consult a qualified advisor before making investment decisions.

About GenieAI

GenieAI is the premier, award-winning AI-powered Portfolio and Risk Management System helping digital asset funds build and protect their alpha. Our technology enables investors to anticipate market trends and navigate risks in ways that were once unimaginable -- all while managing portfolios with unprecedented precision and workflow automation.

GenieAI’s PMS/RMS is complemented by GenieAI’s AI Lab, a cutting-edge technology platform empowering asset managers with advanced tools to drive their in-house R&D. AI Lab helps the world’s leading digital asset managers drive their innovation at lightning speed.

GenieAI’s leadership team is a powerhouse of expertise, including PhDs specialized in Machine Learning and Artificial Intelligence with a focus on financial applications, Wharton MBAs in Finance, and seasoned capital markets professionals.

GenieAI is a winner of Hedgeweek’s 2024 Risk Management Solution of the Year Award, recognizing our leadership in AI and PMS/RMS technology. GenieAI is backed by leading investors, including Sierra Ventures, Coinbase Ventures, Bain Capital Ventures, Venrex, and Goodwater Capital.

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