Thursday, January 11, 2018

GMGH Crypto Portfolio for 2018

Am I shilling my own bags?

Well, obviously if I'm actually owning them, I believe in them, right?

A LOT of people have been asking me what I own and why, so here you go. I don't owe anyone an explanation for anything I own, but I'm willing to share what I own and why I think they are good investments.

I classify myself as more of a fundamentalist and I really don't do much trading at all. Unlike most of the new people coming, I don't have the mentality of "Aiya, it's just $1000 play money, lose also nevermind". My picks are calculated bets that I feel have relatively low risks given the upsides that are still present (given the valuation at the time of writing).

Feel free to disagree with me and avoid my shitcoins. Also feel free to have a different perspective and to explore deeper if any catch your fancy.

1. DigixDAO (DGD)

DigixDAO is a governance token. The DAO owns 466,000 ETH , and with a fixed supply of 2 million DGD tokens, that means that each DGD token is pretty much backed by 0.233 ETH per token.

Because of this 0.233 ETH loose backing per DGD token, if the whole thing goes to shit, you would be able to expect back about that amount of ETH per DGD owned when they decide to dissolve the DAO. I have been buying a lot of  DGD since the price of it was 0.175 - 0.2 ETH. If DGD fails to launch, I profit between 16-33% in ETH if and when they return the ETH. The refund is not a sure thing, but 99% confidence is good enough for me though. And because I know some people will definitely ask this: What guarantee is there that they will refund the ETH in DAO? None, goddamit. This is crypto.

If DGD launches successfully, their DGX stable gold token has a good chance to become the defacto stabletoken in the Ethereum ecosystem and they can easily replace Tether. The upsides are huge. This is literally digital gold. The DGD token will collect fees every quarter from the AUM and transaction fees (omg, an income play?! yes). With a stable token, they will occupy a very important role in the crypto ecosystem and their anchor of value will allow for many things to be built on top or around the DGX gold token as the preferred medium of exchange, due to its low volatility.

Oh, forgot to mention. Just under 500 addresses own 92% of all the tokens in existence. Over the past few months, many of these top addresses have all been accumulating into its release (expected Feb/Mar 2018). Good luck trying to buy any. This is one of the most illiquid tokens that exists.

2. Kyber Network (KNC)

Kyber Network is ironically a utility token that will kill off all other utility tokens. My thesis for Kyber is simple - utility tokens are trash, and Kyber facilitates them having no value. As long as projects force their services to be in their own native tokens, Kyber exists to absorb value away from those token holders because Kyber renders away any reason to hoard utility tokens.

Kyber Network is a decentralized exchange that offers users: no account registration, no deposits, low low low fees, instant transactions, guaranteed liquidity. If they can gain market share and implement cross-chain, they would become THE DEX of the crypto world.

I must admit, Kyber is a bit of a long shot that depends on two major factors: Ethereum remaining a popular platform for ICOs and token issuance (it already is #1) and that people want to keep things simple by not having 100 tokens for the hundreds of services that they will use. I don't know about you, but in my eyes, both assumptions seem about right.

3. TenX (PAY) 

Simple thesis - allows you to spend crypto at any VISA merchant in the world and withdraw cold hard cash from ATMs globally.

They are currently suffering from the happy problem of TOO MANY USERS and are struggling to scale up to meet the unprecedented demand of their cards and services. A banking license is in the cards by June 2018. They are moving at breakneck speeds on all fronts except the most important one - putting their card into the hands of every crypto user.

TenX is currently quite depressed with news that it's European partner, Wavecrest, has cancelled their cards. However, they have been in the works with Wirecard to do a global rollout for the longest time and they have pretty much put their balls on the line to reaffirm that Q1 is still the time for the global rollout.

PAY itself is an interesting token. It's a "reward" token (whatever the hell that means), which basically means that you may or may not get rewarded and receive value by holding these tokens. 0.5% of revenue from processing credit card payments go to the token holders and probably more goodies in the future. Nothing is finalized yet, they are having a lot of issues with their structure because it kind of looks like a dividend token - but without any rights or ownership or anything.

Based on what was last communicated, if you hold PAY, you will receive monthly income from the different payment processing streams that TenX processes. If you think about how much money is in crypto and how much money can flow through TenX if they manage to be market leader, having a decent amount of this token could be your cash cow for life.

I can easily predict that if their global rollout starts Q1 2018 with no delay, by Q3 just about every crypto user would already have a card or would be waiting for one. I still predict massive problems on their backend scaling up though. I myself am eager to get a card.

4. Raiblocks (XRB)

Raiblocks is one of the MOST exciting technologies that I have ever seen lately. It is simple, ingenius and it works.

Raiblocks is a completely independent "special" blockchain which allows for instant and free transactions.

Sounds too good to be true? I have tested it, along with thousands of others. It works.

What's better than cheap and fast? Free and instant. I predict that most of all the gen 1 blockchains that are just simple value transfer mechanisms will be crushed by XRB moving forward once they gain the momentum and user understanding of it.

Once they clean up development tools and improve accessibility and information on XRB, I am almost certain that it will explode and become a massive contender in the value transfer space (I'm talking about you Bitcoin!).

It has one of the best upsides that I have ever seen and I'm super excited to see how it goes. The risks are basically it's untested architecture and resilience to attacks - which are huge ones that can totally destroy it if vulnerable.

5. Bitcoin (BTC)

Investment thesis - uncles, aunties and institutional investors only want to buy the "safe" crypto and this is it. Until BTC is displaced as the defacto base for alt pairs, BTC will always have a use case, though it is rapidly deteriorating.

Almost all new crypto users who are knowledgeable and enter the space shun Bitcoin as expensive, cumbersome technology. I hate using it, but it's probably going to go up.

Plus, when you own some BTC, it makes it easier to answer the question of "Oooooh, I heard you are buying some of those cyber bitcoin things?".

6. Ethereum (ETH)

Proof of stake, sharding, #1 platform for ICOs, developers and enterprise interest, need I say more?

I have long believed, and I still do, that Ethereum will overtake Bitcoin eventually. If it doesn't happen by the time sharding is out and working well, then something fundamental must have changed about Bitcoin to keep it as the premier and defacto cryptocurrency. Maybe an actual working and adopted lightning network? I won't be holding my breath for it though.

To be completely frank, I have almost no ETH. I spent it all buying DGDs are ridiculously cheap prices. Stupid move? We shall see about that soon. After DGD finally makes it move and it is no longer cheap, I will continue stacking ETH.

7. Monero (XMR)

Simple - there is NO other competitor when it comes to privacy.

That's it. Everyone needs privacy and privacy is one of the few things that many people are willing to pay big premiums for. Monero is battle tested and it hasn't broke yet. You can pick your own favourite privacy coin to go with. A lot of people are going with Zcash, but not me. A lot a lot of the new people are going with Verge, LOL.

Everything else?

Honestly, I've been in this space for a while and I read up on most projects that I encounter. If your favourite crypto isn't here, it's not because I hate it - I probably just don't like the valuation of it and I don't think that it would make a good investment. Examples would be ADA, NEO, OMG, PIVX, ICX, AION, etc etc.

Sometimes though, there are coins which I think are absolute trash, yet people still pile into them. I'm not going to give names, or else some of you might cry. Anyway, whatever. The best part about crypto is that you get to put your money where your money is at. If you think you are right, then bet on it.

Conclusion

I know my last 3 crypto aren't as interesting as my first 4 crypto, but I really do like all of them very much - the way the technology is, development is going and the issues that they are all solving. For me, the toughest question is how do I allocate my monies between all these good picks? Well, I allocate based on my faith and conviction on all of them.

Interestingly, the first 3 crypto are all ERC-20 tokens, while the last 4 are just gen 1 blockchains doing payments. I am looking at the gen 3 blockchains, but it's hard to decide which ones are looking the best. I guess it's still a bit too early for me to know. That said, probably an equal allocation in each of the big 3 (Wanchain, Icon and AION) would be the least risky option and still probably have positive returns. That's how crazy crypto is.

Anyway, I don't want to talk too much about my holdings anymore. Just wanted to finally churn this post out and publish it so that people will stop bugging me.

Crypto is dangerous, wild and crazy. Please do not "invest" into cryptos if you really don't understand it and please do not buy anything just because I have it. Please understand that I already own these cryptos. I probably purchased most of my holdings at about 60-90% cheaper than the current market prices now. Risk is not only determined by the fundamentals of the investments itself, but also LARGELY determined by the price that you are paying.

Stay safe and think for yourself. Good luck!

18 comments:

  1. Nice and very informative , been reading your posts and its very good and thanks for sharing :)

    Have you heard of ETN , what is ur opinion on that ?

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    Replies
    1. Hi Praveen, my understanding of ETN is that it is a fork of Monero that was repackaged and branded for mass adoption and "mobile mining". Their developer has had problems and goes looking for the Monero developers for help (since he doesn't know how to solve it). I highly suspect that the ETN chain will die off since the dev team does not have the technical capabilities to maintain and update the codebase alongside Monero improvements.

      The ICO was super sketchy and was promoted mainly through paid ads on social media and referral links.

      I have and will continue to avoid it. To me, its an extremely inferior Monero copycat.

      Delete
    2. Thanks much for the reply.
      Was going through ADA which seems interesting.

      Would like to hear your view on the same.
      Thanks again

      Delete
  2. Hi!GMGH Any ideas what's the difference between the Monaco card n TenX?

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    1. Hi Steven,

      As background, I have reviewed both projects since ICO period and have kept up with the development of both.

      Both Monaco and TenX will be using Wire card, but of course neither of them have Wirecard cards out on the ground now.

      I consider TenX as vastly superior compared to all the other crypto card projects solely because they HAVE had a working, live project for months - their beta testing in Singapore since early 2017 and their European Wavecrest cards since 2H 2017. TenX has actually processed real transactions from real users. Monaco cannot claim such a thing.

      Between a real but delayed project vs an imaginary one, my choice is obvious.

      That said, you do NOT need to be an INVESTOR in either or any of these crypto card projects. You can just simply wait for their products to be out and just be a USER.

      Delete
  3. Nice list. Thanks for writing, as usual. Outside of Bitcoin (purely for monetary gains and nothing much else to be honest), DGD, ETH and OMG are top on my list.

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    1. Hi Kevin,

      Welcome to the DGD club! I'm waiting for more visibility on OMG's actual chain before I decide to get some.

      Delete
  4. What about NEO? IMO Neo tech is better than eth just need to catch up on adoption rate and implement decentralisation.

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    1. Hi YH,

      I've never really liked NEO. I do not think that it is superior tech. At least they are finally getting ICOs on their platform, I'd give them that.

      Getting adoption is what every blockchain needs to succeed, so it's a pretty moot point.

      I'm not a fan, but I think NEO can succeed purely based on it being a "China play", but speculation is not really my style.

      Delete
    2. Like you, I originally gave NEO a miss, as a cheap copycat of ETH. Having tried writing Solidity (a real bastard language) contracts for ETH myself, I can only say that programming for ETH is a real pain in the ass. This is compounded alongside the slowness of the network.

      Investments ultimately follow where the actual developments take place. From a technical standpoint, NEO supports smart contracts in Java/Python/C# (with Javascript and others to come along), so the bulk of developers have a lower barrier shifting to it. As proof to the sheer ballsiness of this, check out the NEO Developer Conference in San Francisco at the end of this month http://devcon.neo.org/ , tickets going for USD750. That they dare charge for attendance is a pretty good signal of developer interest.

      Secondly there is the China innovation story. I originally dismissed WeChat, Alibaba as cheap copycats of Whatsapp, Amazon altogether. Time and again today, we see Chinese companies out-innovating their original Western inspirations. And somehow I do believe that a Chinese implementation will end up being one of the top 3 smart contract platforms in the next 1-2 years, if Ethereum cannot improve on what it offers to developers.

      Thirdly for HODLling, the separation of NEO and GAS is a very smart move altogether. Holding NEO to reap GAS is a nice dividend mechanism that incentivises HODLing, while keeping the network costs pretty clear cut.

      Delete
    3. Hi Sudo,

      I don't think NEO is a cheap copycat of ETH. The NEO/GAS structure is very different and rather interesting. I think they are different enough and the only similarities that they have are being smart contract platforms and actually having successful ICOs launch on them.

      I'm not a programmer, so I can't comment on the language (although I am aware that this is an issue often brought up).

      At these valuations, NEO is worth a bet for all the reasons you mentioned above. I used to believe that it does not make sense for multiple siloed blockchain ecosystems to survive and there would have to be consolidation. However, now with gen 3 blockchains like AION, I think multiple platforms can survive and service their own niches.

      I'm not a big fan of NEO because I don't like to gamble too much on geopolitics in my analysis. The downsides of NEO is large in my opinion because I know soooooooooooooo many people who are purely betting on NEO specifically because of the "China story". I think this China Ethereum story is already priced in, but what do I know. I'll continue to watch NEO with amusement and fascination, but I am still yet to be convinced that NEO is a good choice.

      Delete
  5. Came here looking for a sarcastic post and got none. So sad. And wah how come I have all your bags? :p hmm hmm hmm

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    1. Hi!Babe,more like looking for love here,no?

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    2. Dude, I'm married. Observe the house rules.

      Delete
  6. Hey GMGH,
    How would you compare DigixDAO to Bitcoin gold? The latter has a 10x more market cap than the DAO but should be more stable?

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    1. Bitcoin... gold? Wtf?

      Bitcoin gold is a shitcoin traded ONLY by Koreans (60% of trading volume).

      I think you are very confused by BTG and DGD and what those crypto do.

      Delete
  7. Hi GMGH,

    Thanks for your portfolio insights. Like you I am a raiblocks hodler, and have holdings in both kucoin and bitgrail. There are problems withdrawing them to my rai wallet, and am worried they are doing something fishy(unlikely but its still annoying). Do you think this is a cause for concern, and are you facing these withdrawal issues as well?

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    Replies
    1. Hi Anon,

      From what I've heard, XRB withdrawals on Kucoin is already up and running with Bitgrail working on fixing their problems to enable withdrawals again soon. (I was previously stuck on Bitgrail but they resolved it and this new issue cropped up again)

      My only current withdrawal issue is the XRB I have stuck on Mercatox, which is the only exchange that isn't communicating with the dev team for help with their node.

      I don't think it is a cause of concern. The dev team is EXTREMELY aware of this situation and are doing a great working giving help to exchanges and working on the fixes to the nodes to prevent future issues.

      Delete

Observe the house rules.