Ripple

Aug 03 2017

The BRED Portfolio Update: Still Doing Okay

Since April, we’ve told you quite a few times about the BRED Portfolio: our own specially selected basket of currencies. Artisan, GMO-free, and tasty! Actually, no…just four of the cryptocurrencies that you would have done well with, had you invested $2,500 in each of them and left the basket alone.

Whether or not they’re the coins for hipsters or they’re the tokens of the future is beside the point: the idea here was to create an index of sorts. This basket was selected for its simple diversity:

B – Bitcoin. The crypto that started crypto.
R – Ripple. Their XRP token is taking on SWIFT, the international banking and money transfer protocol. (This is the closest thing to investing in a Silicon Valley startup you’ll find in cryptocurrency, as it’s an actual Silicon Valley startup.)
E – Ethereum. The smart contract underpins so many of the ICOs that have burst onto the scene.
D – Dash. Dare I say it still has the best community, and it is still the closest thing to a consumer-friendly cryptocurrency being used in the wild.

Before we share the updated results, a word on the fork.

Ah, the fork. The spinoff. The creation of Bitcoin Cash, which came “out of nowhere” this week and became the third-largest cryptocurrency on the planet. By market cap, at least – though, due to the nature of the beast and the system, price was all over the map and volatility was everywhere and some people have yet to find their coins.

For the purposes of this portfolio, we are going to assume that we held all the keys for all of the coins. Thus, any sort of fork would have given us the same number of BCH coins as the number of BTC that we started with.

Other than that move, nothing was done to the portfolio. Nothing pulled out, nothing added in.

So, How Are We Doing?

Yes, had you invested $10,000 in these four cryptocurrencies at the beginning of the year, you would have turned that basket into a rather large basket, growing it to 17 times its original size.

But, as you can see from that chart over there, we’re actually below the highs for the portfolio, and below even the June 1 levels.

What gives?

The combo of Ripple and Ethereum are both down from where they were, with each having hit all-time highs earlier this summer.

But we’re still way above the starting point – both Ripple and Ethereum took their original stakes and multiplied them 20-plus times.

The Question: Is Buy-and-Hold the Way to Go?

Only you can answer that question, and we encourage you to do your own research. And seek legal and financial advice from professionals, too.

We’re just here to share ideas and let you do what you want with them.

And one thing we did hear loud and clear this week was that different strategies to manage through “the fork” could all possibly work. Some traders we follow buckled down and held their Bitcoin and didn’t do much with it, other than wait for their Bitcoin Cash tokens to manifest themselves. Others dumped their Bitcoin and doubled down on altcoins – those cryptocurrencies that are lower on the totem pole and, in some cases, highly speculative investments.

The BRED Portfolio is likely somewhere in between – you’re holding your BTC, but you’re also holding some other coins and tokens that aren’t necessarily altcoins.

So this is one way to potentially manage through the Bitcoin and crypto universe – with a semi-diverse basket of four coins that have done pretty well this year.

Jul 13 2017

DIY: Your Bitcoin Hedge Fund

It’s time to update our Bitcoin Hedge Fund, which we told you about back in May. Before we do that, though, this reminder: we DO have a Facebook page, we ARE on Twitter, and we’ve been spending a ton of time over on Steemit. We’d love to have you join in on the conversation in any or all of the three.

And away we go…

Hedge Fund Background

First of all, the typical standard disclaimer: do your own research. We’re not responsible for gains or losses. Get legal, tax, and accounting advice. Don’t invest more than you can lose. These are volatile-as-f markets, y’all. Really volatile, especially the past several days, where there was at least a little bloodletting and panic.

Anyway, our original post said we’d park a small amount – in our hypothetical fund, we chose a guy named “Herbie” and his hedge fund (“Herbie’s Hedge Fund”) had $10,000 to invest. We chose this amount as ten percent of his investment capital. Is that a good amount? A bad amount? Too high? Too low?

Heck, that’s for you to decide. If you’re Wences Cesares, you’d put 1% of your net worth in Bitcoin and leave it there for several years. That may turn out to be good advice, or it may turn out to completely fizzle.

What We Started With

Our hedge fund had a nice mix of established coins – the BRED portfolio, of course – as well as some emerging coins and a recent ICO. Here’s what it looked like then:

If you have more than a passing understanding of the markets we’re in, you might think every one of those coins has gone up since May 1. And you’d be almost 100% right: using today’s prices, grabbed from CoinMarketCap.com, here’s what you’d have:

Some notes on what we see here:

Bitcoin: Holding Steady

Bitcoin is doing well enough, and it started as 30% of the portfolio – for reasons detailed in May, but, if it’s becoming the reserve cryptocurrency, then yeah, you want a good chunk of it.

What will be interesting, though, is where it goes in the next 20 days or so. Hard Fork, Soft Fork, stuff that even we admit we’re paying attention to but not studying THAT closely – the August 1 deadline date for Segwit-related movement on the part of the BTC-hemoth will mean movement in price not only of BTC, but perhaps of others in the BRED portfolio…and LTC, too.

Timing on LTC, DGB, XRP: Not Bad!

From the “blind squirrel” department, all three have done well. Litecoin was, indeed, a defensive play – you could argue that it belonged in our BRED portfolio – some folks have told us so – but it’s (in our eyes) a bit like Bitcoin and a bit like Dash. But it’s also seen as a Bitcoin alternative, so that’s why it’s here. And it has nearly doubled in the past five weeks.

And some of our success is a little bit of luck – we thought we could be too late to get into Ripple’s XRP token, but it turns out that quadrupled for us.

Digibyte went on a tear, then pulled back and is now back down to Earth – if Earth is an 11x growth in its price.

And, About Our Laggard

Win some, lose some. WeTrust is still a good product/coin/token/system/platform. And we’ll keep it here because we do think that it has tremendous potential.

But two things do jump out at us here at Metacoin HQ:

We picked the wrong ICO.
We are also missing out on a number of these ICOs because we’re in the USA.

A Word on ICOs

Initial Coin Offerings used to be all the rage a couple weeks ago. Then Ethereum pulled back and cries of bubble were everywhere.

THEY’RE BACK.

Tezos $XTZ pic.twitter.com/zswITrHUiY

— BambouClub (@BambouClub) July 13, 2017

That’s one we missed out on entirely because we’re in the USA and these will not let Americans get involved. You have to wait until they are traded on an exchange…

That could actually be a good thing – if an ICO is oversold, overblown, and overhyped, it will more than likely fizzle once it hits the markets, creating a buying opportunity for mere mortals, er, Americans.

But, and this is a message for Congress as they look at tax reform, and maybe, too, a message for the SEC: as long as there’s a ton of caveat emptor attached, what really *IS* the problem with these ICOs being open to American investors? How are they any different from, say, my deciding that Blue Apron is awesome and I want to bet my IRA on the Blue Apron IPO?

Food for thought.

Two More Things

One – our hedge fund actually looks a bit different today than it did on July 1.

Yeah, $7,000 down since July 1. This is why we updated the numbers on July 13 – it’s a more accurate picture of what’s happened over the past 12 days.

Two – your own hedge fund. We told you before that this is a hypothetical experiment and you can use this as a guide for creating your own. However, we like the basic principles here: some big coins, some smaller coins, maybe an ICO or post-ICO coin or token or two. The general idea, as always, with a hedge fund is that you want to hedge your bets.

Overall markets – stocks, bonds, mutual funds, precious metals, pork bellies – those could tank tomorrow, or explode tomorrow, or trudge along. If you have all of your eggs in one basket, you’re likely going to have trouble someday. And if you have all of eggs in the wrong basket, that could spell trouble, too.

Love to hear your ideas! Tell us on Twitter, or in the comments below.

Oh, if you HAVEN’T gotten some coins to get started, pop on over to Coinbase, use this Affiliate Link, and you’ll get a Bitcoin Bonus with a qualifying purchase.

Jul 11 2017

How to Catch a Falling Knife

Timing is everything in just about everything everywhere.

Case in point: the cryptocurrency markets of the past 48 hours. A bloodletting of epic proportions? Or just a slight pullback?

If your timing was such that you bought into the BRED Portfolio at the beginning of the year, and you didn’t sell, you would still be up 1718%.

So, if you did do that – and congratulations to you for doing that – you would not have paid any attention to the numbers from July 1.

Just ten days ago. The ones we link to in the blog post above.

These numbers.

Perspective, playas. One person’s OMG is another person’s $63,000 pullback.

Which brings us to the point of this post – as well as a music video.

Catch Me, I’m Falling

One man’s overrated pop tune from 1987 is another’s evocative trip down memory lane.

Pretty Poison was the band, and I don’t think they did much after this (and, considering I’m in the 99th percentile when it comes to 80s pop music knowledge, it’s a safe bet your trip to Wikipedia for the Pretty Poison discography won’t yield anything of note).

Story time: I worked at a mall clothing store, back when both were things, in the late 80s. I was successful enough to keep the job for most of a year, and I think part of the reason was that I kept things moving. I also kept the Top 40 station on and, during the holiday rush, that helped a ton. Dance-ish poppy music played on 2-hour rotation started to stick in your head, so even the bad songs became okay.

We kept busy because we had customers and there was merchandise that had to be moved and because the manager liked to joke “If you’ve got time to lean, you’ve got time to clean.”

There was one point, though, when…whatever you were doing at the time, you had to stop doing and pretend to scratch a record like a DJ. That point was at 2:21 of this song.

I queued it up for you there.

To this day, hearing that song takes me back, and the 2:21 mark gets me pretending to scratch records.

Timing is Everything

I’m watching the markets closely because I’m ready to move in at such a point where I think it might be safe. But I won’t know exactly – and neither will you, and neither will the experts.

So all you can really do is guess, right?

Yes, and no.

Yes, you’re guessing that whatever coin you’re going in on won’t continue falling – the proverbial attempt to catch a falling knife. If you catch the handle, you’re okay, but anywhere else and you start bleeding.

Some picks – DYOR*

So we went live with a few potential bargains the other day and…they’re all still bargains. Even moreso than they were when we posted.

Siacoin is up 3x and then some this year, but it has dropped precipitously over the past couple weeks. Floor may have been 253 Satoshis yesterday. We actually took some coins back. But we’re still HODLers.*

Stratis dropped a bit, too, and it’s below the “hey you should buy up to 200k Sat” level that we talked about – let’s be honest, it’s WELL BELOW that number, and sitting at 130k Sats. (HODLing that coin, too.)

We’re long on those two, but we took back SC – actually made a profit, if you believe that – and moved that into Bitconnect. It’s a lending platform coin thing and we’re watching it rather closely – even if our coins/funds are locked up for a whole ten months. [THAT’S AN AFFILIATE LINK. So if you try it out, we might get compensated. To be honest, we set up an account there two months ago, and kept watching the action. Yesterday was when we pulled the trigger.]

* DYOR = Do Your Own Research; HODL = Hold On (for) Dear Life. A HODLer is one who exhibits HODL-type behavior.

Next?

Well, that’s the other point – we don’t know what’s next, really. We keep watching ICOs, we take a look at some of those coins we invested in that we’re waiting to see trade – like Exscudo, for instance – and we’ve got one eye on the August 1 Segwit hubbub that we honestly don’t totally understand.

This knife-catching stuff is tough.

And this market? Well, it’s like…pretty poison.

Jul 02 2017

Six Months In: The BRED Portfolio Continues Its Tear

You could actively manage cryptocurrency trades. You could chase ICOs. Or, you could just take a chunk of money, invest it equally in four of the biggest – yet also four diverse – coins, and see what happens.

In the case of the #BRED Portfolio, which we started tracking earlier this year, you would have done pretty well, thanks.

How It Works

Step one of our BRED Portfolio was to take four coins and invest $2,500 into each. The coins were selected, we’ll admit, with the value of hindsight and because they fit an acronym; but we also chose these because of their perceived diversity. You were getting a diversified portfolio because…

B is for Bitcoin – and let’s face it, the word “Flippening” hadn’t even entered the equation until last month;
R is for Ripple – sorry if the XRP ticker symbol would have made this “BXED,” but Ripple, the company behind the coin, is taking on SWIFT and has a shot at actually winning;
E is for Ethereum – “smart contracts” as an alternative network/platform onto which ICOs seem to be launched everywhere;
D is for Dash – we credit folks like Amanda B. Johnson for actually showcasing the consumer value AND the community value of Dash.

We “backtested” this portfolio in that we just went back to January 1 at midnight GMT and checked the USDT value of each coin. The result was a portfolio that started like this:

We decided early on that we weren’t going to rebalance the portfolio. We weren’t going to take profits, we weren’t going to cut losses.

Since it was a hypothetical portfolio, we can do that – we can also ignore things like psychology, ebbs and flows, actually need for income that people might have, etc.

We mentioned above the value of hindsight – note that we came up with this idea in early April; had we chosen a different date, Ripple may not have been on the collective radar just yet, and Dash wasn’t yet a top five coin (which it was when we launched the portfolio).

Nevertheless, our experiment was underway. Now that we’re six months in, let’s check the results.

Oh. My. Goodness.

So, you’re telling me, a “set it and forget it” portfolio, of just four coins, equally weighted and left alone, would have grown to 22 TIMES ITS ORIGINAL SIZE???

Yes. Yes it would have.

What if I waited and started April 1?

That portfolio would have looked a little different, obviously, but, if you started with equally weighted amounts of each coin on April 1 and left it alone, you’d be looking at the following:

In other words, had you waited until April 1, then invested and left your coins alone for three months, you would have gone 5x. FIVE TIMES YOUR MONEY.

What we can learn…

Not sure – all these coins have grown, some are more on fire than others, and the whole space remains all sorts of volatile.

What we’ll do in the days to come is this:

Keep watching these coins, sharing updates as we can over on Twitter (where you should totally follow us)
Share the results of the other hypothetical portfolio we’re tracking – our own “Hedge Fund” – and see how it is doing
And, of course, make changes to our own holdings as we see fit.

We’ll also encourage you, dear reader, to get in the game if you aren’t already: it’s easy and, if you use our Coinbase affiliate link, you can potentially get a bonus of $10 with a qualifying purchase.

Final Note!

Of course, your experience may vary. This is a hypothetical portfolio – making 24x your money is rather unprecedented.

In other words, invest in cryptocurrency at your own risk. And don’t invest more than you can afford to lose. You could end up with 24x returns, or your entire portfolio could get wiped out. Neither is out of the realm of possibility.

Jun 28 2017

How Are Things? Did You Panic? Did You Buy?

Hi there, crypto trader. How are you. Doing okay? Keeping busy in this new new new market we’re in?

Oh, you panicked? Well, I understand. After all, panic is a natural reflex, especially when the sky is falling like it did for a few days.

I mean, look at this Bitcoin chart!

That’s kinda scary, right?

Buy The Failed Dip

Before we explain the concept, let’s look at an eerily similar chart from Ethereum.

The toughest part about Buying the Failed Dip is figuring out exactly when the dip has failed.

In fact, returning to the ETH chart above, it looks like there were four failed dips – four times where there’s a Fibonacci level that the price dropped below – and four comebacks.

The fourth appears to be happening this morning – welcome to the rapidly changing nature of cryptocurrency markets.

So…what’s the advice here?

Buy The Fundamentals, Dude

Yup. You can day trade or week trade or whatever kind of trade you want to do – that can be profitable, but you have to know what you’re doing. And, unless you are really good at following charts and seeing action, you might get burned.

Or you can Buy The Fundamentals, Dude. That’s right:

Bitcoin is the world’s reserve cryptocurrency, or the gateway to other altcoins.
Ethereum is the smart contract and ICO gateway.
And so on…Ripple cointinues (see what I did there?) making inroads in the world’s banks; Dash has an awesome community; Siacoin (LONG “i”) is likely to tackle Amazon Web Services SOON.

It’s Going to Continue Being Crazy…

Stick to fundamentals.