Exscudo

May 28 2018

Get Ready for a Wild Week

Here’s why you’ll see some interesting things happening on the crypto markets.

EOS – June 2 Election of Block Producers

It’s a process that we’ve endeavored to understand here and we’re not totally there yet; but, suffice it to say, there’s about to be a whole lot of interest in what happens with EOS.

Why? Well, the crypto project that Dan Larimer is behind has a unique process where its users vote for the “Premier League” of 21 companies that become “block producers.” These “BPs” are incentivized with EOS tokens to keep the system running. (We’ve met a couple of the BP candidates in our crypto journey. If you want to learn more, suggested sites to check out include Block.one, EOS42, EOS New York, and EOS Canada. (Heck, there’s even a BP candidate in Oklahoma.)

The election – voting is also rather complicated – takes place on June 2, though the votes won’t be tabulated for a few days. Then, the continued jockeying begins – those that are in the top 21 need to stay in the good graces – so their systems can’t fail. If they do, 100 backups are ready to take their place.

It’s the culmination of a year-long EOS ICO: and it’s probably going to mean some serious movement – up, down, and sideways – in the cost of the EOS token.

(Thanks to CoinMarketCap.com for the above chart.) Right now, we’re looking at a 30-day price range of $10.77 to $19, with the price holding steady around $12 or $13 the past couple days. But the math behind (1) becoming a block producer and (2) the ecosystem and the apps being worked on will probably drive speculators into the market this week. And next. And beyond.

No price predictions here – and DYOR, we don’t provide legal or investment advice – but don’t be surprised to see some extremes.

EON – Exscudo Could FINALLY Launch

Delays in projects are inevitable, and the Exscudo ICO didn’t raise a TON of money, so it’s not completely surprising to have seen this one stall a couple times. However, the developers shared the latest update on their Slack channel and…

It appears that the Exscudo exchange will launch by the end of the month. Which gives them a few days. We’re holding on.

We got interested in this project a year ago, invested a tiny amount in the ICO, and helped out with the bounty program. So we’re a little invested in its success. Fingers crossed.

ADA – Cardano Has Been AWFULLY Quiet

Here’s the all-time chart.

On January 3, ADA traded at $1.22. It’s now trading at 18 cents. That could mean that the market was frothy at the beginning of the year, and now it’s a lot less so. It could also mean…well, it was a new project then – launched last fall – and maybe it’s still getting its sea legs.

Could it be the Ethereum killer? Maybe, maybe not.

Is it trading at a deep discount? Quite possibly.

And Two Projects We Helped/Are Helping With…

Quick update on both POW and Empowr.

First, POW – they put the brakes on their latest developments to fix some system issues. So it’s thinly traded and the “bridge” that will let those who claimed tokens using their Facebook credentials move them over to the Ethereum blockchain was paused while they worked in the background. There’s confidence from the developers, though.

While we’re still bullish on the possibilities, we did pause our firm’s work with them in the interim.

Empowr is currently trading on an exchange called Token.store. The price has stabilized as of late; but, like POW, it’s still really thinly traded.

With the downward movement this past week of Ethereum shares – dropping into a low-$500 range – each Empowr coin (EMPR) is worth about $1.30.

You earn coins on their system by engaging with other users on a site that looks a little like Facebook; but, it’s less intuitive, so if you do sign up, take advantage of the tutoring on the site from the “Success Coaches.”

Dave from Metacoin remains on the advisory board of Empowr. A project with some potential.

We predict a wild couple weeks on the crypto markets. Buckle up!

Jan 17 2018

Our 2018 Crypto Investment Plan

EDITOR’S NOTE: With the activities of mid-January, such as the sharp pullback of pretty much all coins, plus the crash of Bitconnect, we’ve updated this post on January 17.

Anyone else feel really blessed and ready to make it a phenomenal year?

Frankly, we feel like we hit the ground sprinting in 2018. Part of it was due to a little bit of luck, part of it was due to some planning, and part of it was due to the discipline to just hang tight for a while.

For instance, we made our own luck with a couple of timely picks; we also called ourselves HODLers on at least a couple of occasions – ones where weaker hands might have folded up the tents.

But we screwed up a couple places, too: our first ever trade with DASH meant that we took profits of 25% off the table and closed out our entire interest. Let’s never speak of this again.

Starting with a Bang

My #crypto portfolio is only up 55% since 12/31.

What am I doing wrong? pic.twitter.com/BxAqbDmFeX

— Dave Van de Walle (@Area224) January 4, 2018

We’ve gone on and on about Risk Management here. And we also feel that we’ve experimented at least enough with some concepts – you can read a whole bunch more over at the Passive Income page on this site – to at least have a firm understanding of what could work, what won’t work, and what things are worth our time.

Finally, we think we’ve gotten a good chunk of knowledge from some others on the web – especially “Crypto Twitter,” which has been a wonderful world for us so far (with thanks to some characters like @BambouClub, @crazy_crypto, @haydentiff, and @BryceWeiner, who all share their approaches to coins and tokens and various crypto ecosystems – and all bring rather distinctive POVs).

It was BambouClub himself who challenged us to put a plan to paper – and stick to it. We had the plan to paper part sketched out – but we needed to formalize it and put it in writing.

And the “stick to it” thing we’re also going to TRY to do. More to come on that…

Enough Background: SHARE THE PLAN!!!

Behold, our 2018 Crypto Investment Plan. With the usual caveats:

This is not individual advice
Invest at your own risk
Seek professional help for things like taxes, accounting, legal, and the like
“DYOR” – if you learned one acronym last year, it’s that one. Do Your Own Research.

Let’s get started with the $1,250,000 question:

Should BRED Be Part of Your Plan?

How quickly can we answer that with a resounding YES?

If you read our post from New Year’s Day, you know how well you would have done with BRED – that combo of Bitcoin, Ripple’s XRP token, Ethereum, and Dash – to the tune of wild, crazy, insane returns from buying and holding for one whole year.

This was, and still is, probably as close to a Bitcoin Mutual Fund as you can get. But, for 2018, it needed to be tweaked, to accommodate for a couple things, including main Bitcoin forks, the Ethereum fork from more than a year ago, and the crazy returns from Ripple (meaning that you are buying fewer XRP tokens than you had a year ago, because they’ve gone from penny stock to blue chip holding rather quickly). Hence:

2018 BRED Allocation — Reweighted to start the new year

We’ll answer the “how much?” question a little later; but now that the overall yes/no question on BRED is settled, we probably need to agree on an altcoin strategy, too: everything down the totem pole that could make sense to be part of the mix.

What About the Altcoins?

Our approach to altcoins isn’t random – we spent most of 2017 learning which sorts of projects appealed to us, and which ones had the potential to turn into something that replicates the success of the BRED portfolio. They’re somewhat diverse – big and small, different kinds of projects – and, as you can see from this chart, they also run the gamut from multi-billion-dollar projects to tiny-but-poised. Here’s a snapshot of our eight coins – but remember to DO YOUR OWN RESEARCH.

As we revisit some of the highlights and lowlights from 2017, we know that our biggest mistakes were when we chased quick returns and weren’t in love with the project. In these cases, we think these projects have tremendous potential, and it’s likely a rather diverse enough group to spread out our risk.

And we lucked out on a couple: ADA and HTML have both gone up at least 5 times since we bought in, and TRX was a gift courtesy of a Binance airdrop, so we held on and bought more.

Where we think we might see some real growth, though, is toward the bottom of the list. We’ve held COSS for long enough to be officially called #HODLers – “Hold On for Dear Life” – and our stake has allowed us to realize gains on a USD basis from Bitcoin’s price spike. And BURST has us so crazy excited: we were working on a blog post IN JUNE about the potential for that coin…before all of its developments.

There needs to be room in the portfolio for more, though. Let’s briefly address Passive Income next.

Our Changing Passive Income Approach

Well, the breaking news as we update this post goes as follows:

We took some lumps and lost some BTC (and ETH, and even some LTC) investing in passive income programs that went belly up. One saving grace: we have investigated mining and staking, and that’s where our Passive Income for 2018 will take us.

Genesis Mining will be where re reinvest in this category, and we’ll also invest in coins where there’s passive interest that pays – like HTMLCoin, for instance – and also check out inexpensive mining for coins like BURST.

There’s one more bucket, but what do we call it and what do we use it for?

Take A Flier, Please

We were able to confirm on Investopedia that we’re using the term correctly, so we’re calling this category “Fliers.” This includes:

Coins that we invested in, lost interest in, but didn’t totally get rid of (LBRY is one)
ICOs or other projects that are either thinly traded or haven’t fully launched (Exscudo, POW)
Airdrops (we’re still finding coins that we were granted that…maybe might be good projects eventually)
“Others” – serving as a catch-all term for anything else that doesn’t fit neatly into a category.

We now have four different buckets – so it’s time to figure out the right allocation for each.

Here It Is: Our 2018 Crypto Investment Plan

Let us explain what’s going on here. We decided to allocate in more of a “barbell strategy” – heavily weighted toward core coins on one side (40% BRED) and toward alts on the other (the 40% Alts category). The “Target” column is the amount we want to see our allocations get to – but, as you can see in the “3-Jan” column, in some respects we have a ways to go.

Coins that we specifically hope to make up ground with we’ve highlighted in pink: we will add where we can, either through profits on something like Bitconnect, or, if we end up with an extreme winner, taking some profits from that coin or token.

Right now, we need to reweight a little away from Alts (59%) and toward BRED (22%); we also know that the Fliers are not an exact science, since some of those airdrops aren’t worth much – but could be worth a ton someday – and others don’t hit the market for a bit, so pricing guesstimations are just that. (In those cases, by the way, we have simply used the value of the investments we’ve made as the value of the coin right now. Exscudo, for instance, claimed to sell at an equivalent of $2, so we calculated the BTC price and offset that for any re-distribution of tokens that occurred later.)

Why They’re “Goals”

We agreed to put this on paper, but we also didn’t want to upset the apple cart. That’s why we’re calling them goals: we aim to get our overall crypto portfolio as close to the weighting as we can by February 1.

But we also give ourselves the leeway to make changes as we see fit. For instance, TRX cannot possibly sustain its run, can it? XRP can’t have anywhere near the run it had last year, could it? And so on, and so forth: while we don’t think we’ll deviate from BRED, we might make a change or two to the Alt portion of the portfolio.

And we can’t be held to a strict “40-40-10-10” formula. (If, in theory, we did that in 2017 with BRED but decided to reallocate each quarter, who’s to say what that would have done to our approach?)

Our Suggestion For You…

Again, this is not individual advice, and seek the counsel of those wise folks in your spheres of influence.

However, this has been a great exercise for us, the act of getting things on paper. We’ve questioned a couple of our own assumptions, and we’ve also had to ask ourselves just how much risk we want to shoulder.

In this vein, we think we’re prepared for 2018, come what may.

We’d love to hear your thoughts.

Sep 16 2017

How To Avoid Getting Rekt

If only it were that easy.

Spending 48 hours watching the Bitcoin market (and the other crypto markets, too) was enough to elicit trips to the store for industrial-strength antacids. You had a weird week – China news ping-ponging throughout the market, Jamie Dimon saying that Bitcoin was headed to zero (or something like that) – and the price craziness did cause quite a few “hold my manbun while I vomit” moments.

However, now that all that’s in the rear view mirror (because we’ll never have a price drop ever again, right?) it’s time to talk about how you can avoid getting rekt.

We’ve got four parts to this approach – four pillars of risk management that you can consider. Those four pillars: The Ratio, The Basket Theory, Passive Income Platforms, and ICOs. We’ll explain it all below.

Again, Do Your Own Research. Here goes…

Risk Management, Part One – The Ratio

Traders – the hardcore type – talk about “risk/reward” ratios in a very simple way: expressed as a ratio with a colon between the numbers (giving us an opportunity to maximize the use of various punctuation marks in one glorious sentence; we are big fans of glorious sentences here at Metacoin HQ) and it looks something like the below image.

In this situation, you are advised – by the hardcore traders, not by Metacoin, since this site does not offer individualized trading advice and you should do your own research and you and you alone are responsible for gains or losses and don’t invest more than you can afford to lose – to risk 1 to potentially make 5.

A trader would say, for instance, that they see the potential for a profit of 50% on a trade. If that’s the case, you’re setting a stop loss at 10%. Applying it to the above Bitcoin price, if you listened to this trader’s hypothetical advice when Bitcoin was at $3000, you’d have stop losses to sell your holdings at $2700, and you’d have a sell order at $4500. (And you might actually see both of those prices in the next couple weeks, at least given the volatility in the marketplace.) Neither have been triggered, but, if the price hits either level, you’ll either sell and cut your losses, or sell and take some profits.

But you can also apply a different sort of risk management concept, which I’ll call the “Basket Theory.”

Risk Management, Part Two – The Basket Theory

Andrew Carnegie famously said “Put all your eggs in one basket, then watch that basket.” The general premise for Carnegie started with steel, which he used as a fulcrum to get into all sorts of other things; so maybe his basket of steel gave birth to other baskets (bonds, oil, general finance, etc.) and you could use his theory to some extent with crypto. In other words, you need to know a lot about cryptocurrency if you’re going to have a basket of crypto, but you need to diversify that basket itself.

Carnegie’s advice could be boiled down to this: you’re getting into eggs, but that doesn’t mean you shouldn’t have a variety of eggs, either.

Bringing us to the other old adage: don’t put all your eggs in one basket.

Basic risk management in any sort of trading involves a diversified portfolio. You could call the BRED Portfolio we talk about as diversified, but, in all honesty, it’s not diversified enough.

Our own Hedge Fund is probably a better choice for this – a basket of a variety of currencies, chosen for their diversity. If one goes way up, there may be others that don’t do as well – and that’s okay, because the basket itself gets bigger and is more diversified than betting on just one crypto.

But there’s one other angle to our own recommended approach to risk management: Passive Income Platforms.

Risk Management, Part Three – Passive Income Platforms

We have talked at length about some of these platforms, and we are really only scratching the surface. There’s money to be made if you know where to look – and we cannot stress the following point enough:

Spread out your risk in Passive Income Platforms, or you will regret it.

This part of our crypto journey began in July with a Bitconnect investment. (AFFILIATE LINK over there.) Bitconnect (which we explain more on the Passive Income page, which includes some running totals and updates from our various experiments) has the potential to be the best long-term passive income platform in cryptocurrency. This is because the platform is backed by a coin that has a market capitalization of $700-plus million.

We couldn’t go crazy with Bitconnect, though, because we have to keep banging the drum on diversification and risk management and egg-watching. This led us to more platforms worth trying out: Bitpetite (AFFILIATE LINK; Bitpetite “borrows” your Bitcoin, Ethereum, or Litecoin to profit from transaction fees, they pay you, but it’s a lease, like Genesis Mining, and you won’t get your original principal back) and Bithaul (AFFILIATE LINK; brand new, we’ve pulled some BTC out of it, but it’s a test and we’re not sold yet).

But, our research also led us to three additional platforms that went belly up: Ambis, Microhash, and Control Finance.

Affiliate commissions and referral fees can offset some losses, and some of these programs are potentially pretty lucrative. Plus, if you don’t like the “multi-level marketing” component of some of these (Bitconnect and Bitpetite both have tiers of affiliate commissions, so you can potentially profit from introducing others who introduce others), you can just sign up for trading platforms that are launching – like Altcoin Exchange, or WCX – and potentially profit from trading that happens down the road. (Those are REFERRAL LINKS.)

We’ve got one more in our four-part guide…And it’s one that American blokes like us are often kept from taking advantage of. But you…if you’re not in the US or one of the other verboten countries, should totally look at ICOs.

Risk Management, Part Four – ICOs

Initial Coin Offerings – ICOs – are the new Initial Public Offerings – IPOs. We’ve gotten into two ICOs; that number is only two because of the following:

We’ve been skeptical of the product and/or
We’ve been slow to the draw and/or
We’re American.

That last point is uncool, in our opinion. Because of the lack of clarity around regulation, many ICOs are deciding that they just don’t want to muck with American involvement. Some of the cooler ones (Presearch, for instance) asks you at the front page whether or not you are a US citizen or US resident. Answer yes and they’ll thank you for playing and send you on your way; you can’t even register because you aren’t worth the hassle.

You have to wait, in those cases, until the coins trade on an exchange. If it’s a project worth investing in in the first place, its price will pop on the exchange. If it’s not worth investing in at ICO levels, you can possibly get coins on the cheap once they trade – but once they do trade, if they’re trading at a discount, there’s a reason.

We’ll use baseball vernacular to explain our two investments: we’re 1-for-2 – a hit and we reached on a fielder’s choice.

Tierion – this is a base hit, maybe could be a double. We’ll probably score a run with this one. Great project, and it’s right now trading 80 percent higher than its ICO price.
Exscudo – if you’re not a baseball person, a fielder’s choice is when you get on base thanks to hitting the ball, but a fielder makes a play elsewhere, allowing you to reach base. It’s not a hit. It’s not an out. You’re on base. You could eventually score a run, or you could be stranded there after the third out.

With Exscudo, it remains to be seen how successful it will be – if it’s successful at all. Unlike Tierion (which trades on HitBTC, a market for post-ICO coins that aren’t found on regular exchanges, like Poloniex or Cryptopia), Exscudo hasn’t traded anywhere yet – the project is forthcoming. We’re planning, honestly, to get stranded on base (or, even worse, to get picked off daydreaming after wandering off first base). They launch their “test net” on October 4, and the entire project has been delayed.

(We participated in their “Bounty Program,” giving us the chance for pretty substantial gains – but we’re preparing for the worst.)

Is there more to Risk Management? Sure!

We haven’t talked about mining and staking yet – I guess we could talk about those, and we might update this guide down the road. But, for now, we think that these four pillars could help you figure out how best to manage your own crypto risk.

Hang in there, friends. It’s just starting to get interesting.