Ripple

Apr 26 2020

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

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?

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…

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!

Apr 22 2019

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

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!

May 30 2018

BRED Portfolio 2018 – Is It A Good Idea?

Behold, today’s update on the BRED Portfolio – a combination of Bitcoin, Ripple, Ethereum, and Dash and all their forks. When we first talked about it, the idea was an index fund of sorts – set it and forget it – with the goal of spreading out your risk and exposing your portfolio to four of the biggest coins.

Spreadsheet time: here’s what it all looked like moments ago. Note that we took $10,000 and divided it among each coin/token equally; in the case of the forked coins, weighting it based on market cap of each on 1/1/18. (That’s how you arrive at a negligible amount of Bitcoin Gold.)

Not very flattering, huh. Especially when you compare it to all the hubbub here around this ground-breaking (yet simple) portfolio idea and how it performed in 2017. You can read about that over here.

But, Should We Stick With It?

I think part of the theory here is that the market as a whole will move up and down, and these coins will track with the market per se. So it’s highly unlikely that 2018 would bring jaw-dropping returns like 2017 did, unless there’s some huge shift in sentiment. And it’s also unlikely that any of these coins will “go out of business” in 2018; though a huge pullback in any one of them COULD happen (if there’s a “black swan” type of event, maybe).

What probably makes sense – and, again, DYOR stands for “Do Your Own Research, so we’re not responsible here for successes or failures in your investments; please consult your advisors and don’t forget to pay your taxes! – might be a couple of portfolio approaches, spreading the risk out a little more but also taking advantage of some fire-sale coins that still have potential. (And having some flexibility to do ICOs, too.)

Maybe An Alt Portfolio, Too?

We talked about these earlier in the year – and all but TRX are down, with some down considerably.

There are two ways of looking at this: one is that they’re mostly duds. The other? Gems that pulled back with the rest of the market and are (at least right now) deeply discounted.

But Don’t Spread Yourself Too Thin, Either

What makes for a good “basket” approach? 10 coins? 20? 40? That’s up to you – 40 probably sounds a bit much; but there’s also a need to be able to put a little of your portfolio into coins that are new, unproven, “fliers.”

In any event, given where we are now vs. where we were last year, there’s probably some time to look around and see what’s actually out there and prepare your portfolio for any sort of froth by diversifying.

Good luck!

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.

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.

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?