Metacoin

Covering Bitcoin, the Blockchain, Altcoins, and Fintech

Ethereum

‘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.

#CryptoComeback: Is It Time To Get Back In The Bitcoin Game?

People of Earth,

It’s been a really interesting few days in the Crypto universe, culminating with a glorious morning of some staggering gains.

Behold the Top 7 coins, screengrabbed a bit ago from CoinMarketCap.com.

Gains, and lots of them.

Numbers like these provide nice bold lettering to the HODL crowd, and the ones who say I never left Bitcoin, and the OGs who bought at a buck a piece.

And, you know what, they could actually be evidence of a comeback.

Your BRED numbers, as of this morning.

If you’re familiar with our BRED portfolio, first introduced in the Bull Run of 2017, you know that this was ONE WAY to possibly hedge your bets. And a lot of the “hedging” success you may have had could have depended on a few factors — such as when you decided to invest, or where you are in your own financial journey, or even whether or not you needed actual money to pay actual bills.

If you’ve watched this space over the past few weeks, you know that we went back down the BRED rabbit hole again in April, and, at that time, we saw that the growth was about 29 percent. This does not a bad year make.

If you had decided on January 1 (hypothetically) to get back into the BRED portfolio again, you would be up 42 percent today.

However, Does a Nice Week (Or Two, or Six) Mean a Comeback?

That depends.

BREAK TIME: HERE’S A COINBASE LINK, AND THIS IS AN AFFILIATE LINK SO WE’RE BEING AS BLATANT AS POSSIBLE THAT WE CAN MAKE A FEW BUCKS OFF OF IT.

Bitcoin’s price on January 1 was $3476.71. This morning’s price was $6850.01. That’s an 82 percent pop in a little over four months.

But there are also some headwinds: the Tether legal troubles (which are just beginning) and the Binance hack (which the coin may have recovered from) are two pieces that might give you pause.

What to Do…What to Do…

Well, since we may be like you — skeptical, sure, but excited that the comeback ***might*** be underway, how bout some old, tried and true wisdom?

  1. Do Your Own Research. Yes, that’s right, we can’t take responsibility for how much or how little you make or lose. We’re just here to provide some information. Act on your own investments with some diligence, okay?
  2. Don’t Invest More Than You Can Afford to Lose. Duh.
  3. If You’re In a “Friendly” Country, Consider Taking Advantage of That. Our buddy @BambouClub on Twitter is an expert on this sort of thing. We’re Americans, so we can’t do a ton of things you foreigners can.
  4. Consider Other “Hedges.” For instance, we’ve talked about our love for this Non-Fungible Token movement, and specifically games like MegaCryptoPolis. (REFERRAL LINKS IN THAT ARTICLE.) That’s at least one way to spread out your risk.

What Happens Now?

Darn good question. A LONG WAY TO GO if we’re looking to get back to the $20,000 BTC level.

But the signs are good lately.

Time to Revisit the BRED Portfolio for 2019

We’re back! Yes, that’s right, Metacoin is back, we’re re-entering the crypto and blockchain pool with both feet, and one of the things you’ve known us for is a unique view of the entire landscape. One such angle we’ve explored time and again is the concept of BRED: Bitcoin, Ripple, Ethereum, and Dash as a four-coin, equally weighted portfolio that can (maybe?) hedge against crypto craziness and economic upheaval.

Want to check it out again? Let’s go there.

BRED: A Primer

From the “woulda, shoulda, coulda” department, we posited a guess way back when that sitting tight with four coins that provided different sorts of exposure to the crypto market — specifically the combo of Bitcoin (the big kahuna), Ripple (now known as XRP, but a payment system that’s taking on SWIFT), Ethereum (that coin upon which a whole bunch of dApps are built), and Dash (a consumer-focused coin) — may very well give you the right kind of diversified portfolio to weather all sorts o’ storms.

Our first writeup about the subject was here: Meet the BRED Portfolio. And what an initial ride it was: As we learned right after the calendar turned to 2018, had you been wise enough to actually go there, to set aside equal amounts in the four coins and leave them, 2017 would have given you a 100-bagger. (Plus a 25-bagger on top of that.)

2018, found us (as detailed in the post linked to above) keeping track of two portfolios — the original BRED and the 2018 re-calibrated BRED portfolio.

2018, as it were, would have been a much different experience.

CEO of Kruger Industrial Smoothing: “Just finished reading our annual report. Boy, we really took one on the chin last year.”

As you can see, you would have given back 83.5%. So maybe it’s best to start fresh in 2019 with a recalibrated portfolio?

(Before we do that, here’s a refresher on 2018 BRED, as it checked in on New Year’s Day:)

Gee, everything was really expensive then.

So, Let’s Move on…To 2019

If you’re looking for a headline about the 2019 BRED Portfolio, it might be something like “BITCOIN IS BACK?” with a winky smiley face and also the tears that come with having maybe gotten rekt in 2018.

But the year is not 1/3 gone and, as they say in golf, billiards, and horseshoes: “there’s a lot of green in between.” (No, they don’t say that in horseshoes, but we now got your attention.)

We did as we are wont to do and went back and started BRED with an allotment that matched the original 2017 rules: 1/4 of each ($2,500) in each of four core coins. You can see how we allotted the money here:

You can learn more about the whole fork thing below.

Let’s Go to the Videotape

Not a bad start, eh?

One thing that jumps out in the sober light of day: 30 percent (almost) in returns after 3 1/2 months should cause most people to jump for joy. Maybe it’s a sign of things to come? (Actually, it’s a nice bull market performance, since any asset class that appreciates at a 30 percent clip could call it a win for the year.)

Does this mean “Sell in May and Go Away?” Well, we’re not sure. Which is partly what makes this so interesting.

HODLers will tell you that the best is yet to come for all of these coins. Those with BCH that bought at the beginning of the year have almost doubled their money. Dash is up 55 percent. And so on, and so forth…with only the questionable BSV (read more below) and the Ripple’s XRP coin having pulled back this year.

Macroeconomic headwinds could cause folks to head back to the crypto asset class, too — something to keep an eye on.

DYOR — As Always — And HODL?

We’ve stressed this over and over here on the site: Do Your Own Research. BRED could be a great portfolio again — it may be a great portfolio now — or it could go belly up and we’ll all be left wondering “what if?” as a new crypto Winter emerges.

In any event, we’ll keep tracking this, with an eye toward sharing ideas that can potentially help you.

Wait One Second Before You Go:

What about the original portfolio, the one we started with in 2017?

We’ve renamed it the “BRED HODL Portfolio” and here’s what it looks like now:

Still up 20x, but here’s hoping y’all took profits

What About the BCH Fork Craziness?

It’s really a goofy story, but, in brief, there was a BCH fork, some folks don’t like the people who forked the coin, and it’s being delisted right and left.

Coinbase has a great writeup on what’s happening and other exchanges are using the fork as an opportunity to add the forked coin.

Anyway, Happy Crypto Investing!