Metacoin

Covering Bitcoin, the Blockchain, Altcoins, and Fintech

investment

Et Tu, Crypto?

It’s March 15, 2020. I’m trying to answer a whole host of questions. Some are serious:

  • Are we going to stay away from this virus?
  • How will bloggers, writers, and entrepreneurs like me make a slowdown work financially?

Some are less than serious:

  • What is the best recipe for a “Quarantini?”
  • And what about a “Cryptotini?”
Glass of mysterious alcohol, plus an orange peel, and some ice.
“Just throw some liquor, an orange, and few ice cubes in a glass…and hope for the best.”

But, in the spirit of this blog (“making sense of crypto” is kinda the mantra), the questions we’ll ask today — and attempt to answer — are all Bitcoin and crypto in nature. Here goes:

Have We Hit “Bitcoin Bottom?”

Price swings in Bitcoin from March 12.
It wasn’t THAT bad, was it?

Well, to answer the question in the caption, it WAS that bad. Like REALLY bad, actually. THAT IS A 43.3% DROP.

But to answer the bigger question…

Nobody knows. $4185.21 might appear to be a bottom — FOR NOW — because, as of this writing, we’re at $5373.35. We’re bouncing around in the $5100-$5500 range for the past day. There’s some stability. But there’s also that “flight to safety” question that we asked forever ago: Is Bitcoin Digital Gold? (And yeah, forever ago was two weeks back.)

Is What’s Happening Outside Really Impacting Crypto Prices?

One theory — not my theory, had been espoused elsewhere, most notably by vagabond entrepreneur and crisis investor Doug Casey — is that prices aren’t impacted by anything other than rogue traders (Chinese? North Koreans? Both?) who are dumping their ill-gotten gains for cash.

Another theory — probably works in parallel to the above — is that whales are using the drop to dump their Bitcoin and Ethereum on unsuspecting noobs. Then they’ll buy the same coins back at lower prices, with a plan to lather, rinse, and repeat as the days go by. (And as people get less and less certain of what’s to come.)

What’s a Crypto Investor — or ANY Investor — to Do?

Hey, here’s where we can go back to the basics. And these basics make sense for ANY investment — you are entering an uncertain time. You don’t know what will happen next, none of us do, and that’s okay. Consider the following as advice that is worth the paper it is printed on.

  1. Remain calm. It’s a dog-eat-dog world out there — and, if you’re Norm Peterson from Cheers, you’re wearing Milk-Bone underwear — and having a steady hand is going to help a ton.
  2. Assess where you are and where you’re going. Some may need money immediately and don’t have time to play the game of market timing (as has been said often, nobody rings a bell when you hit the bottom). Some may have a little extra to set aside for crypto projects. It all depends on where you plan on being in a month, in six months, in six years.
  3. And, if you can, play the long game. We wrote about that a while ago and we’re still there: playing the long game is going to get you farther than anything else.

Links to Help You…

These are of course AFFILIATE LINKS and if you use them to open an account and make a qualifying purchase, we’ll get a commission. But two long-game tools we’ve been using are…

  1. Coinbase. Dave’s Affiliate Link. They have recently started letting you make regular purchases to “dollar-cost average” your way into crypto. 50 bucks or so, a couple times a month might be all you need to get your feet wet.
  2. Crypto.com. Dave’s Affiliate Link. We have more in this account of late than in our Coinbase account, partly because of the nifty debit card option.

In any event — prices up, prices down, rock bottom, Moon, etc. — we’re here to help. Stay Sanitized.

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

Not a bad start, eh?

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!

A Five-Month Buy-and-Hold Strategy to 10x Your Money

It’s been a crazy weekend on the cryptocurrency front. If you checked in on the markets on Poloniex, as we did earlier today (around 11:30 a.m. Central Time in the US), you would have seen something that looked like this:

Green Weekend

This snapshot (from the BTC “pairs,” so the prices of, say, XRP are calculated in BTC) tells us that you could have done well on a 24-hour period taking the list of 25 of the top “altcoins” and throwing a dart at their names, buying some and then selling 24 hours later. (The obscured 93.76% gain was from STR – “Stellar,” and the 100% gain near the arrow in the picture is BCN – “Bytecoin.”)

But What About…A More “Strategic” Approach?

Oh, that. The BRED Portfolio. The one we seem to be prattle on and on about. The one that involves a $10,000 investment, spread equally between four of the biggest coins – Bitcoin, Ripple, Ethereum, and Dash – and invested on January 1, 2017.

That one.

How is it doing?

Sweet Mother of Zeus!

BRED 10x

$10,000 invested in the BRED Portfolio on January 1, 2017 would have grown to $106,909.51 on May 7, 2017.

Okay, so there’s some hyperbole involved here. Actually, quite a bit of hyperbole: this is a hypothetical case. If anyone out there actually did this AND wants to talk about it, the floor is yours.

Because, let’s face it, investments come with inherent risks, and with that thing called “human nature.”

106k

Story Time

I remember back in the first dot-com boom, and specifically a stock that I owned in my IRA that was poised to change the world. For a while, it did – acquiring others in its nascent space, growing like the proverbial weed. My memory is deliberately a little fuzzy on the exact numbers, and I have since shredded all records of my transactions.

But suffice it to say I may have bought into this stock at around 3 bucks a share, and it went to around 78 a share.

And I held – “HODL” is the acronym that could have best described what I was doing with this one – until the last possible moment.

PSINet was the company. Yeah, that was a learning experience for me.

It Comes Down to ONE WORD:

Fundamentals.

You can certainly believe that Bitcoin, Ripple, Ethereum, and Dash all have the potential to change the world. It is quite possible that they could. It is quite possible that we’ll watch them grow by another order of magnitude. It is quite possible that they’ll continue growing like this, and the ramifications for the global economy could, indeed, be huge.

On the other hand, it is quite possible that we’re watching a bubble that’s about to pop. That Bitcoin is as overpriced as some say, or that there’s too much XRP being circulated.

Our advice: check the fundamentals. Spread your investments around – which is why we say “BRED Portfolio” and not just Bitcoin. Consider the Hedge Fund approach we talk about here.

Due your due diligence, too. Seek advice from places beyond just this site – you’re doing that, right? – and talk to investment advisors and professionals.

Could the trend continue? Could these coins come back to earth? We’ll all find out soon enough.