Metacoin

Covering Bitcoin, the Blockchain, Altcoins, and Fintech

Ethereum

The Blind Squirrel Crypto Portfolio

“In these uncertain times, count on Bitcoin. It’s there for you.”

Well, if Bitcoin could advertise during the pandemic, it would probably say something like that. It would also be total BS: nobody knows where the price of it, and its crypto brethren, will be tomorrow — when the unprecedented unemployment numbers send another jolt into the market –or a year from now, or at the end of 2021.

One of our goals here at Metacoin HQ is to at least introduce you to some of the coins that can potentially help diversify your portfolio. This is why we created something called the BRED portfolio in 2017, and why this year we came up with another idea: the Crypto Balance Portfolio.

You can’t buy #Tomatocoin yet.

Let’s Check in on the Balance Portfolio

If you’ve heard the phrase “every once in a while, a blind squirrel finds a nut,” you’ll see why we gave this blog post its name. A little dart throwing could have yielded similar results; as long as you have some Bitcoin in your portfolio, you’ll probably do okay.

A 25.59% gain.

When we launched this portfolio, it was weighted as follows:

  • 30% Bitcoin
  • 20% Ethereum
  • 10% each of Ripple’s XRP, MCO, EOS, VeChain, and PAX Gold.

Turns out that this weighting helped us quite a bit, since half of the portfolio was invested in assets that appreciated almost 30% (Bitcoin) and 59% (Ethereum). And that helped make up for some of the “meh” performance, like that of VET (VeChain), which is the only loser so far in 2020.

What’s Next?

Every four years, Bitcoin does something called “halving:” cutting in half the reward given to miners. This is scheduled for May 11 — you can look at a nifty countdown clock here — and the block reward drops to 6.25 bitcoins.

So that means what? Good question: some people think the current price factors in that reward, while others think that the supply and demand equation can only mean that, with fewer bitcoins available over time, we’re strapping in for a rocket ride.

The answer is probably somewhere in the middle: volatility, followed by a bull market, followed by more volatility.

In other words, maybe a balanced portfolio can help you hedge your bets.

NOTE: This isn’t investment advice, do your own research, and we’re not responsible for your success or failure.

FINALLY…

Here’s a CLEARLY MARKED AFFILIATE LINK: if you want to pick up some coins, you can use our link at Crypto.com or Coinbase and we’ll both get compensated with a qualifying purchase.

Checking in on the BRED Portfolio

If you want an answer to the volatility in the financial markets, is it possible that the BRED Portfolio — our 2017 combination of Bitcoin, (Ripple’s) XRP, Ethereum, and Dash — could be just the thing?

Well, maybe and maybe not. However, if you are looking for a hedge against a big chunk of other assets, maybe BRED is the answer to your questions. Let’s take a look at how it is faring in 2020, how a couple other things are faring, as well as how BRED would have fared if you had bought in 2017 and left it alone. (The Ultimate HODLer Portfolio.)

First, Here’s the 2020 BRED Portfolio This Morning

A decent return, no?

You would have a tough time to find a YTD asset class with a 42.67 percent growth so far this year. Right?

A quick Google search yields this result, where the US Long Treasury Index yields the best result. (There’s a feeble attempt at a yield pun in that sentence, since it’s an index that tracks the yield of US Treasurys.) 20-plus percent for that one.

From Vanguard.com

What about precious metals? Didn’t they do okay?

Answer? No.

Remind me to further study the palladium market later.

TL;DR — Bitcoin and its Ilk Win So Far in 2020

Whether or not it’s the ultimate Ron Popeil portfolio — “Set It and Forget It” — remains to be seen. But you could have done a heck of a lot worse with other assets in 2020.

Which lead us to the question about the OGs, the ones who have HODLed their BTC (and ETH, XRP, and DASH) and are just kicking back. How would they have done?

Wow…

This is a 16-bagger.

Well this is something to behold. (Not that you can find anyone who bought Bitcoin in early 2017 AND held it AND isn’t a public Bitcoin bull AND would actually tell you that they’ve bought and held.)

So there you have it…if you’re not a day trader and maybe an investor and have some cash to set aside, a portfolio that you pretty much ignore might do the trick.

Of course, we should tell you that you’re on your own and we aren’t responsible for your successes or failures.

Happy investing!

‘Congratulations, You’ve Only Lost 13 percent!’

When the first Financial Crisis hit, we discovered the brilliant Australian satirists Clarke & Dawe. Their take on the European Debt Crisis is worth a watch.

The perspective from Clarke’s character is a propos for today’s post: only losing 13% on a portfolio of crypto assets is, with all that is going on, not too bad.

Choppy Waters
Strap in, #Crypto traders

The Balance Portfolio is Kinda Sorta Hanging in There

We created our Balance Portfolio as an alternative to the BRED Portfolio (more on the 2020 version of that below). We didn’t create it as a panacea to cure market woes from the Coronavirus, though; as we discussed yesterday, we think it may very well get worse before it gets better.

Given all of what is going on, 13 percent isn’t bad, right?

Balance Portfolio as of Today

Down so far…but not as bad as you’d expect

Granted, lots of green numbers appear on the screen today, so had we done this yesterday, it would possibly have looked 5 to 7 percent worse.

(One of my personal faves is VeChain (VET); note that it’s also the worst performer in our portfolio. Still bullish on this one, though.)

But, for a pleasant surprise, check the BRED performance so far this year:

BRED Portfolio as of Today

Better performance; slightly surprising.

DASH is slightly ahead of BSV as the winner here; though, with all of the noise that accompanied BSV and its founder — who claims that he’s Satoshi or something — BSV could drop any second now. Plus, the percentage at stake is tiny when compared to DASH, which started at 25% of the portfolio and is now more than one-third.

What Can We Make of This?

Probably not too much, yet. There’s a chance for more of a pullback, or there’s that possibility that the “flight to safety” will happen, still.

The question that remains: are crypto investors whistling past the graveyard, or — like the guy who did the webinar I watched who thinks he can make you rich; maybe he can, maybe he can’t, we don’t know — are there gems that will still pop (just not immediately)?

If You’re Bullish, Here Are a Couple Picks

We made the bearish case yesterday — just for Bitcoin which, possibly, will drag the rest of the market downward with it — and it’s time to make a bullish case for a couple coins that we’ve picked up recently.

  1. We still like VeChain. In fact, we *think* it was one of the “high market cap/under a penny each” coins that was touted by the same investor guru referenced above;
  2. We also like Harmony — ONE is its ticker — and this one has a low market cap (around $10m at last check).
  3. Don’t forget about PAXG, which is tied to the price of gold; each coin is backed by an ounce of gold. (AFFILIATE LINK: You can get it on Crypto.com and we may be compensated if you make a qualifying purchase.)

Here’s to strapping in for the very choppy waters.

Et Tu, Crypto?

It’s March 15, 2020. I’m trying to answer a whole host of questions. Some are serious:

  • Are we going to stay away from this virus?
  • How will bloggers, writers, and entrepreneurs like me make a slowdown work financially?

Some are less than serious:

  • What is the best recipe for a “Quarantini?”
  • And what about a “Cryptotini?”
Glass of mysterious alcohol, plus an orange peel, and some ice.
“Just throw some liquor, an orange, and few ice cubes in a glass…and hope for the best.”

But, in the spirit of this blog (“making sense of crypto” is kinda the mantra), the questions we’ll ask today — and attempt to answer — are all Bitcoin and crypto in nature. Here goes:

Have We Hit “Bitcoin Bottom?”

Price swings in Bitcoin from March 12.
It wasn’t THAT bad, was it?

Well, to answer the question in the caption, it WAS that bad. Like REALLY bad, actually. THAT IS A 43.3% DROP.

But to answer the bigger question…

Nobody knows. $4185.21 might appear to be a bottom — FOR NOW — because, as of this writing, we’re at $5373.35. We’re bouncing around in the $5100-$5500 range for the past day. There’s some stability. But there’s also that “flight to safety” question that we asked forever ago: Is Bitcoin Digital Gold? (And yeah, forever ago was two weeks back.)

Is What’s Happening Outside Really Impacting Crypto Prices?

One theory — not my theory, had been espoused elsewhere, most notably by vagabond entrepreneur and crisis investor Doug Casey — is that prices aren’t impacted by anything other than rogue traders (Chinese? North Koreans? Both?) who are dumping their ill-gotten gains for cash.

Another theory — probably works in parallel to the above — is that whales are using the drop to dump their Bitcoin and Ethereum on unsuspecting noobs. Then they’ll buy the same coins back at lower prices, with a plan to lather, rinse, and repeat as the days go by. (And as people get less and less certain of what’s to come.)

What’s a Crypto Investor — or ANY Investor — to Do?

Hey, here’s where we can go back to the basics. And these basics make sense for ANY investment — you are entering an uncertain time. You don’t know what will happen next, none of us do, and that’s okay. Consider the following as advice that is worth the paper it is printed on.

  1. Remain calm. It’s a dog-eat-dog world out there — and, if you’re Norm Peterson from Cheers, you’re wearing Milk-Bone underwear — and having a steady hand is going to help a ton.
  2. Assess where you are and where you’re going. Some may need money immediately and don’t have time to play the game of market timing (as has been said often, nobody rings a bell when you hit the bottom). Some may have a little extra to set aside for crypto projects. It all depends on where you plan on being in a month, in six months, in six years.
  3. And, if you can, play the long game. We wrote about that a while ago and we’re still there: playing the long game is going to get you farther than anything else.

Links to Help You…

These are of course AFFILIATE LINKS and if you use them to open an account and make a qualifying purchase, we’ll get a commission. But two long-game tools we’ve been using are…

  1. Coinbase. Dave’s Affiliate Link. They have recently started letting you make regular purchases to “dollar-cost average” your way into crypto. 50 bucks or so, a couple times a month might be all you need to get your feet wet.
  2. Crypto.com. Dave’s Affiliate Link. We have more in this account of late than in our Coinbase account, partly because of the nifty debit card option.

In any event — prices up, prices down, rock bottom, Moon, etc. — we’re here to help. Stay Sanitized.

A Balanced 2020 Crypto Portfolio

We struggled with this one for a little while, and you can’t really blame us: 2019 was a meh year for crypto, and our typical portfolio wouldn’t exactly be the way to go for 2020. Plus, a bunch of new entrants — both projects and categories — caught our eye last year.

Our first question: Does the BRED Portfolio makes sense anymore? Given the fact that Bitcoin had a good year and the others didn’t, does the mix of Bitcoin, Ethereum, Ripple’s XRP, and Dash still give you the kind of portfolio that will propel your crypto investments into the stratosphere?

ALSO, it may not be about the “into the stratosphere” anymore for you. And that’s okay. In any event, we have to figure out if there’s another way to do this.

First Up…How Did BRED Do?

Glad you asked: weird year for sure. Let’s look at the numbers:

2019 BRED Portfolio
Down a shade, but not insane, but…

So, in the interest of consistency, here’s what the 2020 BRED Portfolio would look like.

The 2020 BRED Portfolio

However, we don’t think this is the kind of portfolio to focus on for the year(s) ahead. We’ll give a couple reasons why we *think* there’s a rebalancing ahead.

  1. Bitcoin still makes sense, but Ethereum less so.
  2. Ripple is working on a ton of partnerships, but hasn’t grown like before.
  3. Dash didn’t catch fire on the consumer-facing front.
  4. Way too much else going on.
2020 Crypto Balance Portfolio

Let’s Follow the Trends and Create a New Portfolio

Without further ado, here you go: the 2020 Crypto Balance Portfolio.

2020 Crypto Balance Portfolio
She’s a beauty…

So, what have we done here?

First Up, MOAR Bitcoin

If a stock went up 90% in a year, would you still want it in your portfolio? Or would you take profits?

Good question, and we address that at least a little by (a) keeping BTC in the portfolio and (b) ratcheting it up to 30% of the overall $10,000.

While I wouldn’t go so far as this commentator who thinks Bitcoin will go to $400,000 after its “halving” (when the mining rewards for Bitcoin are cut in half) in May, Bitcoin has cemented itself as the blue chip of cryptos during the past couple years.

You’ll also see that, in this Crypto Balance portfolio, we’ve ignored the forks. If there are notable forks this year, we can take those into account; but “forkening” isn’t that much of a deal the past couple years.

Ethereum, Still, Has a Role

We’ve done some writing on these pages about projects like Megacryptopolis; you can’t play with any of those NFTs, and you can’t trade any assets on OpenSea without ETH that’s in a Metamask wallet (or some other ETH wallet).

Ethereum is really a two-sided coin (ha!) — with quite a few bearish cases on the internet, and a few bullish ones, too. We think the bullish case outweighs the bearish case, though. We’re keeping it in, but dropping it down to 20%.

About the Other Five…

If our goal is a “balanced” portfolio…uh…what the heck does that mean?

In our case, we achieve some level of balance with the other 5 assets in this portfolio, each at ten percent:

XRP — The coin from Ripple still aims to underpin bank transfers, a la SWIFT. Also, if you still believe in the long-term prospects of the project, under a quarter per coin is not a bad deal at all.

MCO — We lurrve this coin. (That’s a technical term, like HODL.) Not just because you can get some for free just by jumping through a couple of hoops [DISCLOSURE ALERT: AFFILIATE LINKS IN THAT ARTICLE] but because they are doing the regulatory thing correctly. We’re American, and bank laws are pretty important to follow.

EOS — I’ll admit to still being really skeptical, but also see the benefits of owning some EOS as an anti-ETH.

VeChain (VET) — This has potential, thanks to the Toolchain, to be the standard corporate “Blockchain-as-a-Service” solution. Partnerships right and left throughout the world. Tremendously undervalued.

VET Website Screenshot
VET’s website tells you what they’re up to.

PAX Gold (PAXG) — One really clever idea is to tie the price of a coin to an ounce of gold — so it’s like Tether, but with gold behind it. Also helps the “gold bugs” get into crypto while helping the crypto bugs get into gold.

And…There You Go

Whether this will catch fire like the 2017 edition of BRED or stall like the 2018 edition of BRED or do nothing like the 2019 edition of BRED…all that remains to be seen. But the plan is that we’ll track both all year and see what happens from there.

Stay tuned. 2020 should be interesting.