Investing

Feb 16 2024

Up Only In 2024?

So far so good for the 2024 Growth Portfolio.

Here we are, on the way to another wacky crypto year. And things are looking…up.

If you’re new here, welcome! We write about crypto and trends and investments and the attempt to make sense of it all. We’ve been at it, off and on, for (checks notes) NEARLY SEVEN YEARS! (Here’s our very first post: 5 Things to Watch During the Tournament.)

And one of the things we do here is create hypothetical portfolios that you can use to hedge your bets. (DO YOUR OWN RESEARCH. NOT INVESTMENT ADVICE.) We’ve done so for a few years now and we have had some fun with it; our Growth Portfolios have been the most interesting to follow. 2022 was the first one and, after a few tweaks here and there, we’ve settled on a decent mix of Traditional Crypto (BTC, ETH), Platforms (AVAX), DeFi (SUSHI) and some others (see below). 2023 did pretty, pretty well.

How Bout 2024?

Some thoughts on what’s here…

Bitcoin Is Very Much Alive

Story time: Back in my high school speech team days, there was a competitor who was talking about the “Peace Corps” but pronouncing it “Peace Corpse.” When she yielded to questions, one smarty pants in the audience asked “Is the ‘Peace Corpse’ alive or dead?” Her response: “Oh it’s very much alive!”

Bitcoin, too, having been declared dead more often than…well, insert whatever thing here…is on a tear so far in 2024. Up 23.69%. We’ll take it.

If You Bought ENS, You’re Enjoying a Ride

Ethereum Name Service is rocking AND rolling, but last year it…didn’t really rock. Or roll. Unless rolling downhill is a thing.

Timing is everything, though: quite a few folks, we would surmise, just didn’t sell after it imploded, hoping for a return to glory. And, with an all-time high north of $83, it’s going to take a while to get back there.

What is $MAGIC and Why Is it the Leader?

We’ve written about MAGIC before. MAGIC could be part meme coin, part…something else. Honestly, it’s a gaming coin and that’s where we’re kinda…huh? So we don’t know enough about it and the Treasure.lol website — YES IT HAS A DOT-LOL DOMAIN — but we will admit the game looks cool and it was fun a couple years ago to watch it go from next to nothing to 6 bucks.

(Then we watched it go back down again. Sigh.)

But, lo and behold, it’s 2024 and it’s the leader among our portfolio, up 27 percent. Yay, MAGIC!

Anyway, There’s Your Portfolio

Again, do your own research. These are ideas, and some of them could eventually drag your portfolio down.

Go get ’em!

Jul 27 2020

Liquidity Machine Go BRRRRRR

If you have a hard time keeping up with the latest in crypto, fintech, or any of the other things that keep the economy moving, join the club. It seems like just yesterday we were all sharing a laugh over the Crypto Winter and lamenting how we could have gotten so many ICOs so wrong.

Then, out of nowhere, comes “DeFi.” “Decentralized Finance.” Sure, it’s Bitcoin, but it’s not, because it’s different, and decentralized, and it’s another term that you’ll pretend to understand and nod in agreement when you hear about and then move on to something else.

WELL, SOMETHING ELSE IS HERE. IT’S LIQUIDITY.

It’s Not Your Grandfather’s Liquidity

Why is Chairman Powell using what appears to be a pasta maker?

If you want to read a debrief on what is meant by these “liquidity pools” that are de rigeur now, go here: Coindesk Liquidity.

If you want *my* take on these liquidity pools, read on.

Did I Mention I’m Clueless?

I decided to jump into the pool — double entendre was intentional there — by learning what I could about a site called Yearn.Finance. $YFI is like the other liquidity pools in that meet many of these criteria:

New (with many having launched in the past few months)
Mysterious (names like “Compound” or “Ampleforth“
Volatile (see screener below)
And in Beta with warnings that “in Beta” means “could get rekt”

One month on the Great Ampleforth Coaster

How it works…in theory: you lend your coins into a pool and then those who need liquidity borrow and your pool lends your coins out at interest and you also get a share in the trading fees and it’s all dependent on algorithms and a number of variables, including whether or not there’s a need for the underlying assets and whether or not there’s a palatable interest rate and…

Liquidity in Action!

The above screenshot is, thank goodness, not the price at which I purchased YFI. I went to KuCoin to buy some and then…it failed. I tried again and…failed again. Finally there was success at something like $2000 a coin. Next:

I was the proud member of a Liquidity Pool and will now be printing money like Chairman Powell. Right?

Your Guess Is As Good As Mine

This is a serious FOMO game, as far as I can tell. Stories suggest large “whales” are making upwards of 50% a month on their deposits. Several hundred percent a year — or the equivalent — can be yours if you know what you’re doing, if your timing is right, and if the prices of these random liquidity pool tokens continue to give you the thrill ride of a lifetime.

Or not.

Once again, like everything in crypto, do your own research. You could lose everything. This isn’t investment advice.

And if anyone knows what is REALLY going on, let me know.

Final Warning:

I really fear these may be like some of the passive income “high yield” schemes we’ve seen on these pages. Which is why this small experiment is, indeed, small.

We’ll keep you posted.

Mar 11 2020

Time for Discount Bitcoin

It’s been a long, long, LONG week on the financial markets. Coronavirus fears plus an oil price drop made for a one-two punch that has left quite a few people scratching their heads. Trading was halted for a bit, and the Dow dropped 2000-plus points. That was MONDAY…

Tuesday was meh and now Wednesday brings talks of a bear market having finally arrived. You name it, it’s in the red.

Crypto people thought this could mean a flight to safety for BTC and other names in the space. Wrong. Bitcoin is really not digital gold (yet) and also doesn’t have a hundred-year track record of results.

SO…we thought we’d take a look at the year-to-date charts and try to get a handle on what the first ten weeks of the year — and what the coronavirus crisis — can tell us about what the heck is going on.

Headline 1: 11.5% Up from the Low

Okay, that’s one way of looking at it. Had you timed the market exactly right and bought at the low of $6994.28 AND held to today, you’d be up 11.5%.

The low wasn’t too far from the opening price in 2020: $7203, so an 8% gain if you bought on New Year’s Day. (Compare to a volatile stock, I guess.)

Headline 2: Had You Called the Top…

Let’s use the scenario above — you buy at the low because you are really really really smart and you “called the bottom” and “bought the dip” — to show you just how you could have done: a 48.7% gain!

Headline 3: What If You’re Bad at This?

Ah, let’s say you’re not so good at calling the market. You buy at the top and sell today because you think you’re calling a bottom.

You lose: to the tune of 33.4%.

HEADLINE 4: DON’T TIME THE MARKET

If there’s one thing that people who trade stocks for a living will tell you it’s this: “DON’T TIME THE MARKET.”

And if there’s one thing that we’ve told you here a few times, it’s this: “PLAY THE LONG GAME.”

Listen, We Don’t Have the Answers…

But — and we’re not financial advisors, do you your own research, etc., etc. — it probably makes sense right now to look at your own situation before doing anything rash like buying or selling tons of $BTC. Do you need the money for something else? What about your own long-term view? Do you feel like playing the market?

It’s a crazy world — made crazier by the fact that no one really knows what will happen to Bitcoin and crypto — so you’re best to stay grounded. Don’t watch too much news. And don’t go batty trying to time any market.

Feb 16 2020

BRED vs. Balance – Which Portfolio Wins 2020 So Far?

Well, this has been an interesting few weeks, huh?

It seems, at least to this reporter, that every time you look up someone is saying “this is the LAST TIME you’ll see Bitcoin under $10,000! BUY NOW! HODL!”

10K BTC Price Movement — Okay, that’s just one week…

Well, then…this *is* quite the development, in that the $10,000 resistance level is something that CT (“Crypto Twitter”) will tell you is really really important for short-term price spikes. So maybe there is something to be said for the fact that once BTC goes above $10,000, it holds for a little and then swings downward and then who knows what happens next?

But What Does That MEAN???

As you know, we’re less about trading crypto and more about investing in crypto. It’s about long-term projects — you can find a whole host of others who will tell you about short-term gains — and we did what we thought was a pretty decent post called Playing the Long Game a few months ago.

In the interest of talking about those long-term investments, we told you a few weeks back about the 2020 Balance Portfolio. Today, we’re curious about that portfolio, how it’s doing, and whether or not it stacks up against BRED, the stalwart we started tracking in 2017.

Let’s Go to the (Crypto) Videotape

Actually, before we do that, two things. ONE: THIS IS NOT INVESTMENT ADVICE. DYOR = DO YOUR OWN RESEARCH. We’re not responsible for your success or failure or anything in between. TWO: HERE IS A SPONSORED LINK: If you haven’t gotten yourself some crypto, we highly recommend Crypto.com. That’s our affiliate link and you can get a bonus by using it if you make a qualifying purchase.

A little foreshadowing: when we wrote the post on the Balance Portfolio a couple weeks back, we didn’t think we’d see the results that we’re seeing. We thought both would be up a little — but we didn’t think we’d see the winner that we saw.

First, the 2020 Crypto Balance Portfolio:

Two rather pleasant surprises here: ONE is that ETH has nearly doubled. (And, if you were following over the weekend, it had more than doubled before pulling back; prices were north of $280 a couple of times.) TWO is a big wow around EOS. That’s a little crazy, right?

So yeah, if you had invested $10,000 in this Balance Portfolio, you’d have nearly $15,000.

And you would have lost this little contest to the BRED Portfolio.

This one popped because of two factors: ETH (nearly doubled) and Dash (nearly tripled).

Another “Wait, WHAT?” moment was the fact that a $10,000 investment would have given you an 88 percent ROI.

Evidence It’s a Bull Market?

Not one asset in either portfolio is down Year To Date. Not one.

The worst performer of any of the assets was PAXG, which is tied to the price of gold.

What can we learn from all this? Not much, actually — it’s a Bull Market and stuff is up six weeks into the year. Some of the stuff is way up.

Might be time for the “Crypto Dartboard Portfolio:” we’re not going to tell ourselves we’re any better at this than someone randomly selecting crypto projects — but maybe there’s SOMETHING to picking a few potential winners, sticking with some old stalwarts, and hoping for a positive outcome?

As always, maybe staying interested in long-haul opportunities is really the way to go.

Jan 18 2020

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.

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.

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

Let’s Follow the Trends and Create a New Portfolio

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

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.