David Van de Walle

Aug 03 2017

The BRED Portfolio Update: Still Doing Okay

Since April, we’ve told you quite a few times about the BRED Portfolio: our own specially selected basket of currencies. Artisan, GMO-free, and tasty! Actually, no…just four of the cryptocurrencies that you would have done well with, had you invested $2,500 in each of them and left the basket alone.

Whether or not they’re the coins for hipsters or they’re the tokens of the future is beside the point: the idea here was to create an index of sorts. This basket was selected for its simple diversity:

B – Bitcoin. The crypto that started crypto.
R – Ripple. Their XRP token is taking on SWIFT, the international banking and money transfer protocol. (This is the closest thing to investing in a Silicon Valley startup you’ll find in cryptocurrency, as it’s an actual Silicon Valley startup.)
E – Ethereum. The smart contract underpins so many of the ICOs that have burst onto the scene.
D – Dash. Dare I say it still has the best community, and it is still the closest thing to a consumer-friendly cryptocurrency being used in the wild.

Before we share the updated results, a word on the fork.

Ah, the fork. The spinoff. The creation of Bitcoin Cash, which came “out of nowhere” this week and became the third-largest cryptocurrency on the planet. By market cap, at least – though, due to the nature of the beast and the system, price was all over the map and volatility was everywhere and some people have yet to find their coins.

For the purposes of this portfolio, we are going to assume that we held all the keys for all of the coins. Thus, any sort of fork would have given us the same number of BCH coins as the number of BTC that we started with.

Other than that move, nothing was done to the portfolio. Nothing pulled out, nothing added in.

So, How Are We Doing?

Yes, had you invested $10,000 in these four cryptocurrencies at the beginning of the year, you would have turned that basket into a rather large basket, growing it to 17 times its original size.

But, as you can see from that chart over there, we’re actually below the highs for the portfolio, and below even the June 1 levels.

What gives?

The combo of Ripple and Ethereum are both down from where they were, with each having hit all-time highs earlier this summer.

But we’re still way above the starting point – both Ripple and Ethereum took their original stakes and multiplied them 20-plus times.

The Question: Is Buy-and-Hold the Way to Go?

Only you can answer that question, and we encourage you to do your own research. And seek legal and financial advice from professionals, too.

We’re just here to share ideas and let you do what you want with them.

And one thing we did hear loud and clear this week was that different strategies to manage through “the fork” could all possibly work. Some traders we follow buckled down and held their Bitcoin and didn’t do much with it, other than wait for their Bitcoin Cash tokens to manifest themselves. Others dumped their Bitcoin and doubled down on altcoins – those cryptocurrencies that are lower on the totem pole and, in some cases, highly speculative investments.

The BRED Portfolio is likely somewhere in between – you’re holding your BTC, but you’re also holding some other coins and tokens that aren’t necessarily altcoins.

So this is one way to potentially manage through the Bitcoin and crypto universe – with a semi-diverse basket of four coins that have done pretty well this year.

Aug 01 2017

Here Come the Altcoins

In the Bitcoin universe, it seems most everyone has August 1 circled, starred, underlined, and highlighted on the calendar. Today’s the day of the “Hard Fork,” or the “Soft Fork,” or the end of life as we know it, or the beginning of the Bitcoin bull run.

Strategies for investors have been all over the map: sell all altcoins – those other cryptocurrencies, ranging in size from billions in market cap (Ethereum, Ripple) all the way down to that one “crap coin” that might go 10x or 100x (or 1000x) – or buy this altcoin or that altcoin and hold on for dear life. And then there’s BCH – Bitcoin Cash – aiming to become that fork (hard or soft, we’re not sure) that sets the world on fire. Or gets sold en masse once we figure out who is holding what.

Carp Coins — We don’t use the word “crap” round here, preferring “carp.”

A quick screenshot from this morning, though – 8:15 or so Central Time in the US, well into first day of the new era in other parts of the world – tells us that maybe the “hold the carp coins” strategery might make a little sense.

Nice little run, right? Everything is green – positive growth for the most-recent 24-hour period.

Were it that simple, though, practically everyone would have chosen altcoins as their post-fork, August 1 and beyond strategy.

Making sense of the nonsense

I’ve witnessed a whole bunch of craziness during the past few days. To wit:

The creation of BCH – which was originally making the rounds as BCC, but BCC is the ticker for Bitconnect (where you can lend out your Bitcoin, sorta). (Use that affiliate link if you want to explore it, it’s an interesting site and the interest possibilities are rather crazy.)
The lending madness on Poloniex, where people have loaned out Bitcoin at rates of 3 to 4 percent per day, on average, as others borrow the Bitcoin for their margin accounts and plan on, I don’t know, conquering the world.
The resilience of Bitcoin itself – which, let’s face it, looks like a pretty stable investment right now, having really only oscillated between $2400 and $2900 USD during the past seven days.

Does this mean the Alts are back?

Maybe possibly.

We personally moved in and out of a couple during the past week – in fact, one of our favorites, Siacoin, dropped into the 250-260 range and we dumped it – with plans of maybe returning soon.

Bargains appeared to be everywhere: Ripple’s XRP token was in the 5000s, Library Credits opened its private beta to the public and still stuck around below 20,000 Sats.

Tea leaves are tough to read, but the diversified strategy might actually be the way to go here. Right?

One last word…

It’s August 1, and, honestly, your guess may be as good as mine or anyone else’s. Rapid growth of all altcoins? BTC’s re-resurgence, testing $3000? Flight into coins like ETH and LTC and XRP as large-cap alternatives? All of the above?

As always, do your own research. Seek out professional advice for things like taxes and legal ramifications of your moves.

But one bet: the whole space – all of crypto – will benefit from the attention. So sitting on the sidelines might mean missing out on an asset class that could get larger and larger from here.

Jul 28 2017

One Billionaire on Bitcoin: “It’s a Pyramid Scheme”

Oh no.

It was bound to happen, the cries of “pyramid scheme” applied to Bitcoin. In this case, it’s billionaire investor Howard Marks, who, in an investor letter circulating earlier this week (and reported on by CNBC here), suggests that there’s a bubble afoot.

And this is from a guy who, according to CNBC, “is famous for his prescient investment memos, which predicted the financial crisis and the dotcom bubble implosion.”

Cue the comments about Tulip Mania!

But…But…But…

Much consternation ensued – people were peeved – over on the Bitcoin and cryptocurrency chatrooms. And rightly so: one rich billionaire dude does have the power to sway other billionaires and, in turn, cause more than just a ripple-effect.

The response from this site, though, is a heck of a lot more calm. If Mr Marks is correct, then why are hedge fund investors quietly getting involved in the space?

The Store of Value

Is it possible, though, that Mr Marks is simply misguided?

Bitcoin’s value is somewhere in the neighborhood of $46 Billion. The cryptocurrency economy – factoring Bitcoin, Ethereum, Ripple and the hundreds of other coins and tokens that make up the digital currency universe – is worth around $90 Billion. (Figures from Coinmarketcap.com.)

Gold? Estimates are that all the gold in the world would be worth somewhere in the neighborhood of $10 Trillion.

The US Debt? Twice that.

Marks is misguided, in our opinion because he doesn’t understand how the value is created and stored with Bitcoin and its ilk. Similar to gold, it has to be mined, created, manufactured. (Some ICOs are “pre-mining” their coins or tokens, and that’s a different subject.) Something exists that’s of value – but the value is stored and unlocked through lines of code and cryptographic puzzles to ensure that the code is what it says it is.

Yes, They’re Speculative, Too

Note that Marks says these are highly speculative assets – and we agree with that assessment, to a point. ICOs appear to be everywhere, and that might be part of the tulip comparison in his mind. You could, conceivably, launch a token sale today and unlock some value from the crypto economy.

Speculative investments, though, abounded after the bubbles that Marks predicted popped. Dot-com value was created after 1999; Facebook spawned a whole host of competitors (not just social media sites) after its IPO, which happened after the toxic mortgage/asset bubble popped in 2008.

What to Make of All This?

Back to those old saws:

Don’t put all your eggs in one basket
Don’t invest more than you can afford to lose
Watch the space closely
Diversify
Seek advice from a few places
Do your own research
Talk to a tax advisor, a lawyer, an accountant

Certainly, value the opinion of someone who has made billions. But seek out other opinions, too.

Maybe these Bitcoin things aren’t tulips after all?

Jul 26 2017

New Exchange Coming – It’s Called WCX – And You Can Share in the Profits

Had a “wow” moment this morning, as I learned about a new exchange that launches in October. It’s called WCX and it might just change the way cryptocurrency exchanges operate from here on out.

DISCLOSURE: Up there is a referral link, so we’ll benefit from your using it to sign up. However, there’s nothing stopping you from signing up and then using your link to invite people.

A “pro experience,” you say?

To read that, and read between the lines, you might think that they’re insinuating that other experiences are more “amateur.” And if you look online for commentary about Poloniex, for instance, you might agree.

From my perch, I do like Poloniex and haven’t had problems with it – with ANY exchange you must make sure that you’re taking the right steps with your digital currency. Don’t have too much in any one place and, if you plan on HODLing – “Holding on for Dear Life” – you are best off putting coins and tokens into some sort of cold storage.

Another affiliate link here: Trezor is the one thing we recommend for parking your coins in storage.

I also like Bittrex – US-based – and Cryptopia (that’s a referral link there, too), but can totally understand the need for an alternative.

“10x lower fees,” you say?

Okay, that’s another one that’s going to get a few people interested – though, honestly, fees in crypto appear really low already.

Quoting the site:

Tiny Fees. Some exchanges charge up to 1% in fees on every transaction. WCX is 10x cheaper and market makers are paid. That means more money stays in your pocket.

Sharing in the profits???

Read this from the site and tell me this doesn’t have tremendous potential, too…

The kicker? Social Recruitment.

I love this element – it looks like we’re in effect participating in the ICO by recruiting people. It reminds me a little of the bounty program run by our friends at Exscudo, or one of the scores of other bounty programs out there.

You’ve got to wait…a little

This has just launched – the first tweets from the team (here’s their Twitter page) are from TWO DAYS AGO. And the timeline calls for an ICO beginning September 9.

But we’ll be watching…

Here’s that link again to sign up: WCX Link.

Also, if you haven’t gotten started by buying crypto on Coinbase, what are you waiting for? That’s a link that can potentially get you a bonus with a qualifying purchase.

Jul 19 2017

Ten Days Later: How About Those Five Coins for Bargain Hunters?

Earlier in my business career, I worked for a company that was part of a paradigm shift of sorts – in the way that health care plans were delivered to corporations. Then, the “high-deductible plan” was foreign. Now, these things are everywhere.

The company I worked for was in the unique position of trying these plans out on a few of their employees, and these same employees would report back to prospective companies “warts and all” on the pluses and minuses of using these plans.

The saying at the company was pretty simple:

We eat our own dog food.

In that spirit, I’ve decided to “eat my own dog food;” or, more accurately, share an update on the “Five Coins for Bargain Hunters” that we told you about ten short days ago.

Why am I doing this?

One of the things I’ve noticed in this emerging cryptocurrency trading and investment space is that analysts, coin-pickers, token fans and others are extremely quick to tell you when they went 10x or better on a pick. But they’re awfully slow to tell you about those errors in their ways. I’d rather do this “warts and all” – you can’t take this site seriously if all we do is share our winners.

A Lot Has Happened In 10 Days

Just this afternoon, word broke of a huge theft of Ether from unsecured wallets – a potential huge blow to a coin that is serving as the backbone of so many ICOs.

And this is after price drops in what we call our BRED Portfolio.

This same portfolio, you may recall, was $224,000-plus just 18 days ago.

So…those five coins…where are they now, and would we still buy them?

And before we share this update, this disclaimer. DYOR means “Do Your Own Research.” In other words, we like our ideas, but you are at your own risk if you decided to invest in any or all of these. We are not responsible for any losses. Don’t invest more than you can afford to lose.

Library Credits – LBC

Ten days ago: accumulate at the 17-18K Satoshi range.
Today’s price: 12910 Sats.
Recommendation: Still a BUY.

This is one of those long-term plays. I don’t plan on swing trading this one, am more thinking that it has the potential to be very much like YouTube for a wide variety of content. I’m still bullish; accumulation at this price point could pay some serious dividends down the road.

Steem – STEEM

Ten days ago: accumulate up to 60K Sats.
Today’s price: 50K Sats.
Recommendation: STRONG BUY.

We give this a “STRONG BUY” in ALL CAPS because we’re in love with the platform and spend at least an hour a day there. It has engagement that’s off the charts and it reminds us – as we have said before here – of the early days of Twitter. Except you can potentially profit from it, unlike Twitter.

Give it some time, though. Some pundits are suggesting a price of $10 – which would mean growth of 8x where it is now, and would also put it into the crypto unicorn club, as its market cap is around $250m right now.

Stratis – STRAT

Ten days ago: accumulate up to 200K Sats.
Today’s price: 175K Sats.
Recommendation: STRONG BUY.

Actually, this appears to be the one coin that could benefit the most from the one-two punch of Bitcoin’s Hard Fork/Segwit uncertainty, and Ether’s afternoon follies from today.

Yesterday, it actually went above 200K, and it’s only down around 5% today. We love the project and are HODLing this coin.

Antshares – ANS

Ten days ago: accumulate at 285K Sats.
Today’s price: 260K Sats.
Recommendation: STRONG BUY.

Okay, why are three of these five coins now STRONG BUYS in ALL CAPS after ten days of tumult? Simple – these are good projects. Though I was corrected on Steemit by a friend who suggested that Antshares is actually the Chinese Ethereum and not the Chinese Bitcoin, I still stand by it. And you want some variety in your holdings – known as “hedging” – so having some exposure to Asian markets is a really good idea.

Bitshares – BTS

Ten days ago: accumulate at 8000 Sats.
Today’s price: 4700 Sats.
Recommendation: HOLD.

This is the most “meh” of our picks. I’m not going out of my way to pick more up, and I’m possibly going to become a “bagholder” here.

BUT…it could pop again – it’s below its one-month highs of 12,000 Sats. It’s just not a project I am in love with, so I’m giving it a HOLD recommendation.

Next Steps?

Well, similar to the others we talk about here, we’ll keep watching these as they emerge. There will likely be more blog posts like this one down the road.

And we’ll keep eating our own dog food.