Greek Researchers Claim Efficient Market Hypothesis Can Outperform Hodl Strategy in Bitcoin Trading

According to Cointelegraph, a team of academic researchers from the International Hellenic University and Democritus University of Thrace in Greece recently published a paper supporting the 'efficient market hypothesis' (EMH) for bitcoin trading. The researchers claim that the controversial theory contributed to the development of models capable of outperforming the hodl strategy by nearly 300% in simulated crypto portfolios. EMH is based on the idea that an asset's share price reflects its fair market value and all applicable market information, making it impossible to outperform the market by trying to time it or by predicting winning stocks intuitively. The research team in Greece believes that EMH can be applied to cryptocurrency trading as a replacement for the standard 'buy and hold' or hodling approach to avoiding market volatility. To test this, they developed four distinct artificial intelligence models trained with multiple datasets and selected models optimized against both 'beat the market' and hodling strategies. The optimal model reportedly beat baseline returns by as much as 297%, lending some credence to the idea that EMH can be a useful tool for bitcoin and cryptocurrency traders. However, it is worth noting that the authors conducted their research using historical data and simulated portfolio management, and the results may not change the minds of those with a strong opinion against the efficacy of EMH.