BRED

Jan 01 2018

The 2017 BRED Portfolio…Would Have Made You Rich

Some crypto assets had staggering gains in 2017, that’s for sure. If you want to play the “woulda shoulda coulda” game, you could do it with a good chunk of any of the top 10 – or even a good chunk of the top 100 – assets on CoinMarketCap.com.

Yes, we know – to have invested in the Top 10 coins of 2017, you would have had to (1) correctly guess which ones would enter the Top 10 and (2) in the case of IOTA and Cardano, know that they were going to exist before they existed.

When we created the BRED Portfolio, we decided to take four coins that were already in use, but we did backdate the portfolio to 1/1/17. So we spent pretty much all of 2017 asking ourselves “WHY DIDN’T WE ACTUALLY DO THIS???”

BRED 2017 Recap

Simple enough, we wanted to diversify but we didn’t feel we needed to diversify that broadly. So we created a hypothetical portfolio that included $2,500 invested in each of the four currencies (ones that didn’t just make for an easy acronym, but also were selected for a reason):

B – Bitcoin. Well, duh. Also, it’s really the centerpiece of cryptocurrency; whether or not it retains its dominance in 2018, we’re not sure.
R – Ripple, whose XRP currency aims to beat out SWIFT as the interbank transfer protocol.
E – Ethereum. Most of those token sales were built on Ethereum’s smart contract concept.
D – Dash. We thought then that it was the most consumer-friendly coin; it may still be (though Litecoin and some others might be on its heels).

With an equal amount allocated – and then a similar number of each Bitcoin Cash and Bitcoin Gold added after the forks – we ended up with something that looks like this.

You Could Be Backing a Truck Up Now

The next question: whether your 2018 could be as good – or better? – if you went with this portfolio strategy for the year. We’ve decided, for this blog, to track two BRED portfolios: as opposed to retiring BRED from last year, we’ll keep it going, but also add BRED 2018.

First, the 2017 Allocation.

BRED Allocation 17 — How we originally allocated our BRED portfolio

Next, how we’d allocate a brand new BRED portfolio.

2018 BRED Allocation — Reweighted to start the new year

We promise to continue talking about this – and one of the things we’re working on is holding ourselves to a “buy and hold” mantra on some of our portfolio.

Not all of it, because we do have to be ready to chase altcoins that might pop, or to move into some of the larger coins – like the Top 10 above – that might be poised for another breakthrough.

What about you…what’s on your list for 2018 crypto investments?

Dec 14 2017

50 Weeks Later: The Jaw-Dropping Returns of the BRED Portfolio

We run the risk of saying “I’ll just leave this here” and, well, just leaving this here. But it deserves some context, so we won’t do that.

The Metacoin “BRED Portfolio” is on Fire

Our original post on BRED was a couple months into the year, but we decided to back-test and figure out what would have happened under the following scenario:

Someone has an extra $10,000 sitting around;
They divide that equally between four of the big coins: Bitcoin, Ripple, Ethereum, and Dash;
They leave it alone.

The result is something like this:

Can Anyone Explain?

We’ll hazard a couple guesses as to what is really going on here:

FOMO – “Fear of Missing Out” – is bringing new money off of the sidelines and into Bitcoin, especially; with a huge chunk of the Bitcoin growth during the past three months. (Bitcoin’s price was at 3400 three months ago.)
Coinbase – which has more users than Charles Schwab. (Yes, that’s a REFERRAL LINK over there, and we’ll both get an extra $10 in BTC with a qualifying purchase if you use it.)
Tulip Mania – since everyone’s comparing this Bitcoin and crypto bull market to the Dutch Tulip Bubble, people are acting as rationally now as they did back then.

So Then…What’s Next?

We’ll of course do a year-end wrap-up on the BRED Portfolio, and will run the numbers throughout 2018 on the original BRED, a re-calibrated BRED, and probably a couple other portfolios, too.

In the meantime, if you were wise enough to invest in these back at the beginning of the year AND hold them to now, congratulations to you.

And if not, well, you’re in the vast majority of investors.

Oct 09 2017

It’s October, and Time to Check In on BRED

Followers of this site know that we talk about a diverse set of Bitcoin and cryptocurrency-related topics, and we’ve actually been doing so for seven solid months. (That seems like forever in crypto – in some respects, this hyper-warp-superspeed in the industry is actually unlike anything else we’ve ever seen.) And, while it may appear that we’ve zeroed in on Passive Income of late – we have, to an extent – we don’t want to forget about one of the “innovations” we created in April: the BRED Portfolio.

BRED is Like FANG for Crypto

FANG – Facebook, Amazon, Netflix, Google – gives investors exposure to the internet, social, digital, and the web, acting as a quasi-index fund for those who invest in that group. BRED aims to do the same: take a group of four cryptocurrencies that give broad exposure to the market, but each does its own thing:

B is for Bitcoin (the “well, duh!” piece of the portfolio)
R is for Ripple, which aims to upend SWIFT as the industry standard for interbank transfers, globally
E is for Ethereum and OMG it seems like every ICO is using Ethereum’s smart contracts as their backing
D is for Dash, whose consumer focus and community caught our eye from the get-go.

We started with a simple premise: a non-weighted fund that bought $2,500 of each of the four currencies and left it alone.

So, how is our hypothetical $10,000 doing?

September Was a Down Month

This is good, right? Your YTD growth is 2416%; you would have taken $10,000 and turned it into $250K.

Yes, you would have. But you also would have witnessed a bit of a pullback from the month previous:

But what’s $61,000 among friends?

Really, Though…Quite a Year!

Here’s what your month-by-month looks like:

So, if you want to talk about a “buy and hold” strategy for Bitcoin and its ilk, you may want to consider the BRED Portfolio.

Sep 01 2017

Coins on Fire: The September 1 BRED Porfolio Update

So, how was your August?

If you’re one of the four coins in our BRED Portfolio, your August was rather good. When we launched this portfolio in April, we backtracked our hypothetical investment to January 1, 2017. We took four coins – selected not just because they made for an acronym, like FANG – and put $2,500 toward each. Then, the theory goes, we left the investment alone.

It took off.

Here’s where the BRED Portfolio is today, with prices pulled from Poloniex at the stroke of midnight, UTC.

Okay, we have the advantage of hindsight here – of course, in April we were able to look back to January and think “wow, these coins would have been great to be in!” Still, though, what this tells us is that there could be something to the “buy and hold” strategy. More on that in a second.

August Performance: For the Record Books

That’s right, in the month of August, Dash doubled, Bitcoin Cash doubled, and the other three almost doubled.

If you remember the “chaos” leading up to August 1 – BITCOIN HARD FORK SEGWIT BITCOIN CASH OMG – you might have had the following approach:

But, as it turns out, a wait-and-see approach to all of the noise could very well have led to quite the portfolio growth.

IN FACT…

Let’s, just for snicks, rebalance the portfolio, starting anew on August 1, with equal amounts of Ripple, Ethereum, and Dash, plus $2,500 worth of the Bitcoin and Bitcoin Cash combination (accounting for the “spin-off” on August 1).

So you could have picked up an easy 83.5% bump in your holdings?

What’s Next?

THIS IS NOT INVESTMENT ADVICE, DO YOUR OWN RESEARCH, SEEK ADVICE AND COUNSEL OF TAX AND INVESTMENT PROFESSIONALS…

One way I *could* see this going is that the sideline money will stop sitting on the sideline. Especially if Bitcoin hits the $5,000 milestone – which *could* happen by Labor Day.

I alluded above to there being value in the “buy-and-hold strategy,” and the BRED Portfolio really does show us that. Plus, by holding – or HODLing – coins, you’re better able to weather storms caused by emotion and lots of trading back-and-forth between winners and losers.

Getting Started

If you haven’t gone to Coinbase yet, use our AFFILIATE LINK to get rolling – they’ll give you a $10 bonus once you’ve made a $10 purchase. (We’ll get a bonus, too.)

But if you haven’t gotten any Bitcoins – or Ethereum or Litecoin, the other coins that Coinbase can get you – now might very well be the time. Once you’re in the game, you can just let your coins sit there…and possibly keep adding value in this crazy economy.

In any event, it was quite an August, and it’s been quite a year for the BRED Portfolio.

Aug 10 2017

On Testing and Learning

If you think you have all the answers, you probably haven’t asked the right questions.

I don’t know where I first heard that maxim, but boy does it apply to cryptocurrency, Bitcoin, and this learning experiment of ours.

What…you don’t think this is an experiment? This entire space is an experiment: the whole concept of Bitcoin is only eight years old, and the goal posts continue to move. We’re ten days into August of 2017, a month that began with The Great Fork and launched a new currency that seemed headed for the stratosphere – and then came back down to earth – and then the mother ship that launched it decided it would reach for new heights.

If you’re not Testing and Learning, then you’re probably doomed to fail. And if you think you have all the answers, start asking more questions.

Exhibit A: Altcoin Du Jour

Each day brings with it a new “Altcoin” that will take off – if you believe the Twitter experts – and if you don’t get in on the ground floor of this coin, be prepared to cry a river once those early adopters pump it and sell it for their Lamborghini. (We’ve taken to calling them “Lambo Coins,” because that seems to be the auto of choice for the crypto people.)

But…

The prevailing wisdom – and I tend to believe this – is that, of the hundreds of coins and tokens out there, once we’re past bubble territory, a handful of them will be worth something. The rest? Dust. Vapor. Ones and zeros.

We’re not near bubble territory yet, though – and that still creates opportunities for even the most casual of traders.

Which is where the “test and learn” concept comes in. If you’ve been following this site at all, you know we have a couple of hypothetical portfolios; these experiments have ranged from one that does okay (the Hedge Fund) all the way up to one that would have made tons of money (the BRED Portfolio).

You also know that we’ve shared some other experiments – posts on coins that COULD go stratospheric, and lists of coins that we think might be good fits for a more speculative portfolio.

And these range in success from okay down to meh.

Because it’s an experiment.

Exhibit B: Passive Crypto Income

That’s probably the best category to call these other things, lending/interest platforms like Bitconnect (which we told you about a couple of times and which we’re still monitoring; use that AFFILIATE LINK to get started if you want to try it out for yourself) and its competitor Control Finance (which we’re investigating as we speak; it appears to be free to sign up, so we have an AFFILIATE LINK over there for that one, too). Or there’s a mining program called Microhash that we just signed up for yesterday. (AFFILIATE LINK.)

Since we’re still learning, we’re asking some questions about these particular platforms:

Are they legitimate?
Are the revenue projections realistic?
What’s the potential for anyone to take their blocks and go home?

Answers:

Well, they appear to be…as far as we can tell from what we’re finding on the internet…but things aren’t always what they seem, right?
Well, that’s an interesting question…we don’t know, and it might take a while for us to find out.
We’re quite familiar with Mt. Gox – that’s ALWAYS a risk.

The issues, for this site and your intrepid reporter/guinea pig, stem from sustainability – are these platforms really creating systems that can allow someone to passively, casually, create the kind of income that could be life-changing? And, if they do, can they continue ad infinitum? Or will there be a crash and burn element that is going to get ugly?

The more that I study this space, the more I believe the following:

Bitcoin, the blockchain, and the cryptocurrency industry together create the potential for the largest transfer of wealth in human history.

But…it is still an experiment.

What’s The Point?

Sitting on the sidelines may be an option for you. Some people do prefer just casually going about their business while small changes happen around them; and maybe those small changes won’t turn into big changes.

But for us…the answers are out there, and we plan on testing and learning and asking more questions as the days go by.

Join us.