Jun 02 2017

How’s Your Bitcoin Hedge Fund Doing?

We like the concept of diversification here – so we’re never going to say to put all your eggs in one basket. In that spirit, we launched our own “Bitcoin Hedge Fund,” which aims to provide a combination of established and emerging cryptocurrencies that can act at least a little like your own index fund.

You can read more about our Hedge Fund here – it’s hypothetical, of course, and you should certainly get professional advice and counsel when coming up with something of your own.

Yesterday, we shared the June 1 update of our BRED Portfolio, which is on fire this year. It had a four-month head start, so of course its results – up 19 times – will be better than our one-month-old Hedge Fund.

Hedge Fund Investment Recap

Here’s what the numbers looked like on May 1.

Now, here are the numbers from June 1, with Coinmarketcap.com‘s prices at around midnight GMT.

The fund tripled – and then some – in just a month!

This leaves us with a few questions:

Can Digibyte keep rolling? Obviously, a 16x multiple is not really sustainable, is it? (If you compare it to, say, Ripple, whose YTD multiple is 36, it looks paltry by comparison. However, Ripple has kept chugging along.)
Ripple, Dogecoin, and Ethereum – not bad one-month performance for each, right? The worst of the three tripled. Can those continue, too, or are we in a bubble?
If even the laggards like WeTrust and Dash are up 30-plus percent, ARE WE IN A BUBBLE?

And that’s the point behind this “Hedge Fund”

The idea is that it’s NOT your entire investment portfolio. Is it 1%? 10% 25% or more? That’s up to you…but, really, the point of any hedge fund is to hedge your bets. One asset class goes up, another goes down, and your overall portfolio weathers the storm.

We’ll keep tracking this, and our BRED Portfolio, and there’s much more coming. For now, though, if you haven’t gotten some Bitcoin, what are you waiting for? Visit our Coinbase AFFILIATE LINK and you’ll get a bonus with a qualifying purchase (and you can buy Bitcoin, Ethereum, and Litecoin there).

Jun 01 2017

Turn 10K into 193K in Just Five Months

It sounds too good to be true, right? Make a small-ish investment, of only $10,000, then let it sit and ferment. After five months, sell it all and find yourself with a 19x return: something that others might wait decades for, accomplished in less than half a year.

Welcome to the crazy world of cryptocurrency, and the even crazier concept we created called the BRED Portfolio.

If it sounds too good to be true, are we in a bubble?

Great question, and not one we’re going to answer with this post. Instead, let’s just go to the videotape and talk about exactly how this came about.

First up, in early April – so no, WE didn’t invest in our basket of cryptocurrencies on January 1 – we thought that this world needed something similar to FANG: Facebook, Amazon, Netflix, and Google. These four companies are all synonymous with some sort of internet, web, social, digital, or online business. But they also are a bit – or a LOT – different from each other.

Bringing us to the BRED Portfolio. We needed a catchy acronym, but we also needed four currencies that each had a little bit of a different angle in this emerging space. Enter BRED:

Bitcoin, the ne plus ultra of cryptocurrencies
Ripple (ticker XRP), which is taking on SWIFT and starting to win
Ethereum, and its smart contracts and backbone of a whole host of other launches (like Golem, for instance)
Dash, probably the most “consumer-y” of the cryptocurrencies.

Our idea: what if you had gone back in time to January 1, bought $2500 of each of the four currencies, and left it alone. What would that portfolio look like today?

If it sounds too good to be true, you need a time machine

Here are the results:

Oh. My. Goodness.

What if you waited until April 1?

We re-weighted the portfolio accordingly, buying $2,500 each of our BRED coins. The result is also quite staggering.

So now what?

You probably have a couple questions, and we’ll try to answer them.

First of all: I can’t say whether or not we’re “in a bubble.” No one knows. For each prognosticator that says there’s too much of all of these cryptocurrencies out there, there’s someone else who says that we’ve just scratched the surface.

The answer – as is normally the case in probably just about everything – is somewhere in the middle. Like the dot-com bubble of the late 90s and early 2000s, if it pops, there will be quite a few losers. There will also be a few winners: companies like Google or Amazon that kept it going and emerged and are now beyond dominant.

As for coins, whether there are too many and whether there’s too much supply of all of them: that is another good question. Ripple is a great example – to the casual observer, supply in the billions vs. an all-time capped supply number of 21 million for Bitcoin might sound like it’s a recipe for disaster for Ripple.

But, as has been discussed quite a few places, maybe Ripple is managing its entire currency plan extremely well.

There will be volatility. There will be craziness. There will be a roller coaster ride. That’s expected.

And, if you haven’t gotten started yet???

What are you waiting for? Seriously, you need to think about getting started with at least Bitcoin and/or Ethereum. You can do that by clicking on this AFFILIATE LINK for Coinbase and getting started. You can start small. But we recommend you get started.

May 30 2017

When Bitcoin Volatility Is Your Friend

How ya holdin’ up there, kiddo? Enjoying the markets? Did you find the thrill ride known as Bitcoin to be exciting? Are you still in okay shape?

Still doing okay? (And if you’re still new to all this, hop on over here to this post and learn all about how to get started.)

Your mood might depend upon a few variables. First of all, whether you believe long-term in Bitcoin (which we’ll use in this post as the catch-all currency) and what it means for the economy. If you do believe, you may have bought in at lower numbers than what’s above. And, if you did, you probably didn’t look to sell at the first opportunity.

Another mood enhancer may be whether or not you tried to buy the dips. BTC at close to $2700 (above chart from Poloniex, so your experience and trading platform may vary) wouldn’t have given you a dip opportunity, but BTC dropping into the $1900s, then $1800s, then below? Any of those would have been buying opportunities for the long-term trader.

If you think Bitcoin is going to $5000 this year, then $2000 is a buying opportunity. $1538 is a golden buying opportunity.

Finally, again here’s our magic word: “Fundamentals.” The fundamentals of Bitcoin are strong, in our opinion here at Metacoin (that link is to our Facebook account and we would love your “likes”), so we’re bound to look at these moves as means of testing our hypotheses. Is Bitcoin strong enough to weather a drop into the $1500s? Does the volatility actually work in our favor – weeding out “panic sellers,” and bringing in long-term investors?

If there were a “State of the Union” for Bitcoin, we think that moving from a May 1 price of $1435 to today’s price of $2200 or so means that the state of Bitcoin is strong. Volatile, sure…but strong.

Leveraging Volatility Through Bitconnect

One more thing about volatility, and this last part is an Affiliate Link; since this whole site is a learning experience, we’re planning on…learning together.

We’ve just signed up at Bitconnect, and it’s a rather unique program. You lend Bitcoin through their platform, they trade it, using highly specialized bots and algorithms to use volatility to your advantage. The interest rates are compelling as heck – compounding daily at a half a percent can mean that money starts to add up quickly.

You can sign up for free – use the link above so this site gets credit, and we’ll get a bonus for your signup, should you eventually lend some of your hard-earned Bitcoin.

Our plan is to start lending in the next several days, then kick back and track the results. It could get pretty interesting – and we’ll share our results, warts and all.

Til then, stay strong.

May 25 2017

3 Ways to Get Started with Bitcoin Today

I get quite a few questions about this Bitcoin stuff. Like, “How does it work, this digital currency?” Or “How is it more than two thousand bucks for one coin?” Or “How is there so much value placed in something that you can’t even hold on to?”

More recently, I get some other questions. Like, “What the heck are you talking about?” Or “Dude, slow it down just a little.”

There’s a bit of a “rabbit hole” element to this cryptocurrency space – it’s a rabbit hole that I went down last year and really haven’t totally came back up from. And it’s a rabbit hole that got me to make this video:

Yes, it might be over some folks’ heads. Sorry about that.

So, since we all gotta start somewhere, I give you this, the quickest of quick-start guides out there:

3 Ways to Get Started with Bitcoin Today

(1) Thing one is to actually get some of the currency. You can get Bitcoin – that’s the gold standard thing that started this whole space – or one of the other main currencies.

We recommend starting at Coinbase, and we especially recommend using this AFFILIATE LINK to get some. (In this case, the affiliate link will actually give YOU a bonus of $10 worth of Bitcoin if you buy $100 worth of any of the three currencies they offer, which are Bitcoin (it goes by the symbol “BTC”), Ethereum (ETH), or Litecoin (LTC).)

What’s beautiful is that you can get started with a tiny, tiny amount. Got ten bucks? Use the $10 bucks to dip your toes in the water. You will pay a small transaction fee, but, if you were to try to spend $10 on some stock through your online broker, you’d spend probably that much per trade.

(2) Spread yourself out at least a little. (This is not trading advice, consult your investment professional, not responsible for gains or losses.) A recommended approach is to split your initial investment between two coins – Bitcoin and Ethereum – or three coins, adding Litecoin to the mix.

When I started, I started with just BTC and ETH. What I did next is what I’ll recommend for you:

(3) Hang out and watch the space. This means not just reading blogs like this one, CoinTelegraph, and Bitcoin.com, but also looking at the numbers sites and trading platforms to understand what is going on.

Numbers sites? Coinmarketcap.com is our favorite. Coindesk.com is another. These sites cover the numbers of the whole space, and will give you a sense of which coins are trending up or down, as well as the all-important “market capitalization” of each coin.

(You will hear about ICOs, and Smith and Crown does a really good job of tracking those – but you may not be looking for that much granular detail just yet.)

The trading sites make it easy for you to get started actually trading – almost TOO easy, perhaps. Suggestion: go to Poloniex, Kraken, or Bitfinex to take a look at what’s happening. See what’s moving, what isn’t, what’s being traded, and how much it’s trading for.

You may be tempted to play around and do some trading, but you’ll probably want to understand the space much more before you try to make money at it. (Trust us on this one.)

There it is. A 3-Step Plan.

That’s how we suggest you get started. Once you’re ready for the next step, then you can dive much deeper. But if you’re a newbie – and remember, even the experts started somewhere – this will help you get acclimated to the wonderful – crazy, scary, thrilling, but, yes, wonderful – world of cryptocurrency. And Bitcoin.

May 25 2017

BRED Update (Or, How’s Your Bitcoin?)

Cryptocurrency traders are a special lot. They are, after all, a new breed, and the markets they trade in don’t totally act like the stock markets, nor do they totally act like the forex markets.

And the “buy and hold” folks seem to be in the minority, at least if you trust the chat rooms on places like Poloniex.

To wit, the activity the past 24 hours or so shows some serious red numbers. Dropping like flies, those “altcoins.” The sky, she’s a fallin’.

Now what? You moved your hard-earned Bitcoins into something like Ripple’s XRP token and you’ve seen it “plummet” 26 percent in the past 24 hours.

You could be like the guy on this all-too-real Reddit post from yesterday.

I have been a BTC hodler for about 3 years now. Things were good and I believe in bitcoin a lot. When the price was dropping and dropping I kept on buying and buying, for the simple reason that I believe in Bitcoin.

Enter a few days ago: Ripple was on the rise. I thought I could increase my BTC-stack a bit by following the ripple trend. I was stupid and went all in… I should never have gone all in on anything. I’m not all in on bitcoin, so why would I put all my hard earned btc in something I do know little to nothing about, right? Well… enter the greed I thought I had left behind me a long time ago.”

Let’s just say it didn’t end well. A cautionary tale for the day traders and trend riders. And those who don’t hedge. And those who don’t buy and hold. And…

Enough Already: Get to the Headline

Oh yeah, that. The headline today asks “How’s Your Bitcoin?” because that has been the dominant news this week. Yes, even above some of those other coins that seemed to come out of nowhere and jump up by 2x or 3x – I’m looking at you, ZCash – Bitcoin’s rise to above $2,500 each is rather thrilling. Cool, yes, unsettling, maybe.

The BRED Portfolio, which we started tracking on April 1 (it’s ONLY been two months? Really?), takes four of the currencies – Bitcoin, Ripple, Ethereum, Dash – and puts them in equal parts into a basket, with an initial investment of $10,000. (We went back to January 1 so we could look at this from a YTD standpoint, and we’ll give further updates on the 1st of each month.) Its growth has been staggering – but the growth has actually been mostly due to non-BTC assets.

Meaning that Bitcoin is back in the spotlight at the expense of some gains in the portfolio.

So, even with the attention on Bitcoin, the BRED Portfolio is still dominated by the growth of XRP, which is still more than half of the overall $195,821.24.

Is there a lesson here?

Maybe: diversification is good. Riding the waves isn’t. Buying and holding, probably also good – unless this entire portfolio and the crypto universe turns out to be a house of cards, in which case we’re all spinning our wheels.

A broader point, though, is one that we should make: Bitcoin is still “dominant” (this gets tracked – Bitcoin as a percentage of the overall cryptocurrency marketplace, which, according to Coinmarketcap.com, has fallen to 49.3%) AND is still the gateway currency. If you’re getting started, or if you’re trading for the first time, the odds are that you’re trading Bitcoins for whatever you end up with.

Bitcoin is the gold standard, or the world’s reserve cryptocurrency.

Whether it will remain that way for a while? That we’ll wait on.