Metacoin

Aug 04 2020

The Oldsmobile of the Crypto Market

Back in the 1980s, Oldsmobile came out with a pretty clever ad campaign, using a slogan “this is not your father’s Oldsmobile.” Here’s one such ad and it’s a fun 30-second investment of time.

That ad is kinda cool for me to see, for a couple of reasons. One: the dashboard and its electronic numbers, now standard everywhere, were ahead of their time, and it seems as if everyone I knew had a car with those display numbers at some point in the late 80s or early 90s. Two: my Dad talked often about his all-time favorite car, which was a Cutlass Supreme. It was a late 60s or early 70s model, so this ad is showing something that is not *my* father’s Oldsmobile, natch.

Enter DeFi, and $YFI

After a busy couple of weeks in the Bitcoin, cryptocurrency, and (especially) DeFi spaces, it’s now obvious that “this is not your father’s market.” We talked about the concept in our post about Liquidity Machines; it’s obvious that it’s the Wild, Wild West (Kool Moe Dee version preferred), and there is quite a bit of new-sheriff activity happening just about everywhere.

We thought we’d outline just a few real-world examples — “ripped from the headlines” — that we are trying (again, we like experiments) with our own portfolio. Our first one is no surprise: Yearn.Finance, ticker symbol $YFI.

YFI burst upon the scene two weeks ago. It has had quite the run. See chart; drool.

What’s most amazing about this coin is that the founder, Andre Cronje, has said that the YFI coin has no value and that he’s building tools that might have bugs in them.

https://twitter.com/AndreCronjeTech/status/1235455431469920261?s=20

Andre’s pinned tweet

No matter: YFI is the yield-farming technology that underpins so many liquidity swaps that even if it is deemed by the founder to have no value, it does actually have value. Quite a lot of it. Plus scarcity: only 30,000 of these will be created.

Using stupid-simple math, if this becomes a $1 Billion platform, each coin will be worth $33,333. Financial pundits call this an “asymmetric bet.” And it’s one we’re willing to make.

Of Course, We’re Also Investing in Meta

Funny enough, I first saw this platform in a tweet and the platform looked slick as heck. Here’s a Medium post explaining more: Medium Post on Meta.

Oddly for us, we had a tiny tiny stake in Balancer — at least a couple months ago — but decided to focus other opportunities, so we moved away from that platform.

What makes this one unique is its goal to insure users against the instability of dollar-pegged stablecoins as one side of a liquidity pool. Other coins talk about risk of loss of the value of a stablecoin were it to fall significantly below zero; with questions about coins like Tether commonly brought up, the potential for a loss is real. As explained by the token team:

This, to be honest, is purely opportunistic: low “market cap” right now, huge upside, and worth watching. (YMMV, DYOR, all that stuff.)

Nice name, logo. And the project is cool, too.

Finally, Watch for Curve

Curve is lurking in the background somewhere, waiting to launch its token. Curve has invested in Yearn, and, if there’s ever an asset that may very well pop almost instantaneously, Curve is possibly it.

Here’s a snapshot of Curve’s current pool APRs and its volume:

Whales are already using Curve and have been since earlier this year — cumulative volume on the platform has exceeded $1.5 Billion — and there’s thought that Curve is possibly “The Next Big Thing.” This is because, as with other platforms like it, you’re adding liquidity to pools and sharing in the trading fees.

(Speaking of “The Next Big Thing,” though, we should caution everyone that we were told in 1988 that Bros would be the next big thing in music.)

When the coin is released — “any day now” — only 2 million will be released each day. Scarcity will set in. Volatility is almost assured — so you’re really going to be on a roller coaster here. But that roller coaster, like the rest of the coin- and token- and liquidity-driven assets, could give you a nice pop. OR…well, you could end up like the career of Bros.

Or like the Oldsmobile: a relic of the past, a nice story about the growth of automobiles, and a defunct brand name.

CAVEATS

As with any and all of these, what are the lines you should keep in mind? “Bet with your head, not over it.” “Don’t invest more than you can afford to lose.” “You may get rekt.” And “this website is not investment advice.”

Good luck. Happy Liquidity.

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.

Jul 16 2020

Balance Portfolio Continues Its Run

We’ve probably said something to the tune of “set it and forget it” for the past four years now. Unless you’re a professional Bitcoin and cryptocurrency trader, you’re likely playing with fire if you try to time the market and get in and out and back in again with the various coins.

So, here’s at least a little evidence that an approach like this *could* potentially work for your portfolio.

Let’s, as they say, go to the videotape, which, as you’ll see, shows a real highlight in the Balance Portfolio…with one of the coins up 245%.

That’s a Spicy Meatball

How we…balanced…the portfolio on 1/1/2020

Background: as opposed to the BRED Portfolio, we created this one to take advantage of the potential for asymmetric gains with a couple of coins that have (in our opinion here at HQ) tremendous potential to pop.

Last month, as you can see in our most-recent post about this portfolio, we benefited from some nice price movement in Bitcoin itself; the largest holding in this hypothetical account. Bitcoin has been stagnant in the past month but OH WOW LOOK at $VET.

When ten percent of your portfolio triples…

The basic idea: have the bulk — in this case, 1/2 — of your holdings in the two biggest coins, Bitcoin and Ethereum, and have most of the rest in coins that could have a pop. (The exception: $PAXG, which is there as a hedge.)

VeChain: An Asymmetric Jump

We follow quite a few investment newsletters and people who tweet like they know what they’re talking about. One theme that pretty much all of them follow is that the best way to make a mint is to make “asymmetric” bets and, hopefully, one of them pays off big time.

It’s not uncommon in the venture capital world, too: VC firms will have 25 portfolio companies with the hope that 1 out of the 25 has a 100,000% rise to make up for the 15 that fail and the 9 that are just moderately successful.

VeChain has the signs of a coin that COULD have an asymmetric rise and reach insane heights. It has the backing of corporate types, or, in their words, the solution is “driven by enterprise adoption.” That means things like this…

…and it also means the application is potentially used in a variety of other ways, like helping track carbon emissions or driving autonomous cars.

This MAY explain this particular coin’s rise: people who are looking for the next Bitcoin or the next Ethereum and fear they may be too late to the party will often start looking for coins that fit certain criteria — call it, partially, the “Robinhood effect” — like a sub-$0.01 price, which is where VET was earlier this year. (One of the newsletters was specifically recommending a certain coin that had a sub-penny price and corporate relationships late last year; deduction brought us to VeChain as a result.)

How to Get Involved?

We need to stress that we don’t provide investment advice, you should only invest what you can afford to lose, and we’re not responsible for wins or losses. We hope you have plenty of wins, though.

Two ways we’ve recommended and we’ll provide CLEARLY MARKED AFFILIATE LINKS HERE:

Sign up for a Coinbase account. You can get a bonus with qualifying purchase and we’d get one, too. *Note that $VET is not available on Coinbase just yet. To get that one in particular, you’ll need to…
Sign up for a Crypto.com account. The bonus is potentially richer but the qualifying purchases are larger, too.

Happy Investing!

Jun 17 2020

Two Automatic Portfolios: Which One’s Better?

Ages ago, we created a crypto investment plan we called the “BRED Portfolio.” Then, this year, we added a different one that we called the “Balance Portfolio.” It’s time again to look at the tale of the tape: which one is performing better so far?

BRED: The OG of “Set it and forget it”

Here, as background, is what it looked like at the beginning of 2020:

Flash forward to this morning and here is the YTD scorecard:

Of note when looking at the above percentages: since we factored in the forks at the beginning of the year (with the value of each “class” including a percentage based on the January 1 price), the percentages for the BTC and ETH class on the whole is a little lower than the percentage growth for the “big guns” in the class. BTC is up 32.54% as a class; ETH up 79.50%.

This leads us to ask whether or not we should incorporate the forks next year. We’ll keep an eye on that.

The BRED Portfolio is designed to be a hedge, of sorts; if BTC and XRP don’t move in lockstep with each other, that’s a good thing for you. They haven’t so far this year.

Bottom-lining this for ya: if you had put $10,000 into this portfolio at the beginning of the year, you’d have close to $15,000 today. So how does that compare to the “Balance” portfolio?

Balance 2020: Not too shabby, either

Before we look at the YTD performance here, let’s see how we set this up to start the year:

2020 Crypto Balance Portfolio — How we’d allocate a balanced portfolio in the new year.

With half with big guns BTC and ETH (no forks) and the other half in five different assets that provide an interesting variety, this portfolio is designed to be more of a hedge than the BRED portfolio.

And…how is it actually doing?

N.B. We’re in love with VET; we think VeChain is inking the right kinds of “Blockchain as a Service” deals and our own personal crypto holdings have a decent chunk in VET.

PAX Gold is another interesting one, in that it aims to mirror the price of gold. Gold isn’t having a moment, yet, but 15% YTD is, again, nothing to sneeze at.

Reminder: none of what you find here is meant to be investment advice. Do Your Own Research, consult with professionals and, especially with crypto, don’t invest more than you are prepared to lose.

AFFILIATE LINK: If you’re interested in getting started with crypto, one really compelling way right now is with Crypto.com. They’re offering cash back on a crypto-based debit card with certain qualifying purchases.

May 07 2020

The Blind Squirrel Crypto Portfolio

“In these uncertain times, count on Bitcoin. It’s there for you.”

Well, if Bitcoin could advertise during the pandemic, it would probably say something like that. It would also be total BS: nobody knows where the price of it, and its crypto brethren, will be tomorrow — when the unprecedented unemployment numbers send another jolt into the market –or a year from now, or at the end of 2021.

One of our goals here at Metacoin HQ is to at least introduce you to some of the coins that can potentially help diversify your portfolio. This is why we created something called the BRED portfolio in 2017, and why this year we came up with another idea: the Crypto Balance Portfolio.

Let’s Check in on the Balance Portfolio

If you’ve heard the phrase “every once in a while, a blind squirrel finds a nut,” you’ll see why we gave this blog post its name. A little dart throwing could have yielded similar results; as long as you have some Bitcoin in your portfolio, you’ll probably do okay.

When we launched this portfolio, it was weighted as follows:

30% Bitcoin
20% Ethereum
10% each of Ripple’s XRP, MCO, EOS, VeChain, and PAX Gold.

Turns out that this weighting helped us quite a bit, since half of the portfolio was invested in assets that appreciated almost 30% (Bitcoin) and 59% (Ethereum). And that helped make up for some of the “meh” performance, like that of VET (VeChain), which is the only loser so far in 2020.

What’s Next?

Every four years, Bitcoin does something called “halving:” cutting in half the reward given to miners. This is scheduled for May 11 — you can look at a nifty countdown clock here — and the block reward drops to 6.25 bitcoins.

So that means what? Good question: some people think the current price factors in that reward, while others think that the supply and demand equation can only mean that, with fewer bitcoins available over time, we’re strapping in for a rocket ride.

The answer is probably somewhere in the middle: volatility, followed by a bull market, followed by more volatility.

In other words, maybe a balanced portfolio can help you hedge your bets.

NOTE: This isn’t investment advice, do your own research, and we’re not responsible for your success or failure.

FINALLY…

Here’s a CLEARLY MARKED AFFILIATE LINK: if you want to pick up some coins, you can use our link at Crypto.com or Coinbase and we’ll both get compensated with a qualifying purchase.