Friday, April 27, 2018

GMGH Crypto Portfolio Apr 2018

At the start of the year, I posted my portfolio for 2018.

However, the crypto market is extremely dynamic and fast-moving. Information gets outdated so quickly, and so does thesis regarding investments.

I'm just penning my thoughts down to justify (to myself!) why I have made certain adjustments to my portfolio.

1. DigixDAO (DGD) Reduced

DigixDAO has been a beast and I've profited MASSIVELY from it. Lucky me it was my biggest position too.

However, I felt that it was time for me to take some profits and rebalance my portfolio because my portfolio was becoming DGD + supporting crypto.

DGD has gone live with DGX and they are steaming ahead with building out governance for its DAO, along with integrating into partnerships that they have forged, as well as making new ones (as usual).

DGD and their mission to tokenize goal is something to speaks to my heart as a fan of precious metals and my distrust for fiat currency. It quite possibly marries precious metals and cryptocurrency to produce one of the best contenders as a store of value and a transfer of value.

While I hope to see DGX adoption go mainstream, it is also poignant to understand that most people don't give a shit about gold, don't have enough mental computing power to rebase from local currency or USD to grams of gold, or simply just don't give a shit about fiat printing (as usual).

I sold near peak price in ETH, but I still have a sizable position and I am looking forward to take part in the DAO governance.

2. Kyber Network (KNC) Removed

Kyber Network is a utility token with a pathetic velocity sink and usable by only one group of people - the Reserve Managers, who probably have a ton of KNC to burn in the first place.

Don't take my word for it. Go and see the Kyber tracker. How much KNC have they burnt and deflated from the network to make the token more scarce and valuable?

While the thesis of Kyber as a service that kills other utility tokens is still valid, their KNC burn rate is a joke as a token that will increase in value. With their main partners still not fully integrated and burning KNC by the boatload, I really don't see any reason to own KNC now.

I made a lot profits from Kyber and I am at peace with my returns. I'd likely never again be a KNC holder again in the future, although I would be a happy Kyber exchange user.

3. TenX (PAY) Reduced

TenX has been pretty shit in releasing their card.

While their business model still makes sense, I can see stablecoins and technological progress slowly chop away at their value proposition.

They seem very adamant in pushing their COMIT idea (which I think is silly and EXTREMELY far away). They also seem to want to push this silly notion of 1-click diversified crypto purchasing.

Meh. Sorry Julian, crypto wallet doesn't count as a product. Still props for remaining so positive even in light of all the negativity and FUD around the project and the viability of the idea.

But it's simple, really. No card, no talk.

Strictly speaking, valuation wise, PAY actually looks like a rather decent long trade at this price though.

4. Raiblocks / Nano (XRB/NANO) Reduced

Raiblocks has rebranded to Nano, and the explanation of this will be below with Bitcoin. While I did reduce my position, it was only slightly. I still like the idea of Nano a lot.

5. Bitcoin (BTC) Increased

I did talk about BTC's investment thesis improving, and that unfortunately also weakens the investment thesis of Nano. I find BTC and Nano competing in the exact same space, which is why I see-saw between allocation for the two.

However, BTC does have better "store of value" properties, while Nano has the advantage of being snappy and free immediately on its base chain, without any funny 2nd layer shenanigans. But 2nd layer solutions look like they are progressing extremely well. It remains to be seen if the adoption and usage of BTC 2nd layer is simple enough to further weaken the thesis for Nano.

Even if BTC is usurped by Nano to be the unhedged crypto of choice for transfer of value, BTC will always still retain its "store of value" property, and that still counts for something. Gold is a terrible medium of exchange for daily goods and services, but its market is still worth trillions.

Finally, with cryptos getting recogniztion and legitimacy, it's a no-brainer that the institutional money has to pour into BTC first before even trickling over into any of the other alts. Buying BTC is a classic and straight forward front run of institutional investors who are willing but unable to enter.

6. Ethereum (ETH) Increased

I still believe that the biggest public smart contract chain will be Ethereum. While other chains are promising higher TPS, their significantly more centralized nature is a turn-off for most people who are in crypto for the technology.

While BTC is unstoppable in its store of value, censorship resistance and network security, ETH has a real chance of being the more useful version of that. The Casper monetary policy has already been proposed by Vitalik and inflation will drop significantly. Trivial hard forks for fund rescues also look set to be rejected by the community as a whole. I would see EIP999 getting merged as extremely negative though, but that outcome remains to be seen.

With like 10 different scaling solutions being worked on and the community being so massive, I find it hard to imagine that any competitor can offer something unique and significantly better enough to get the inertia of the entire community to move over. However, if they do, I'd glady shift over a portion over to back any serious contender.

7. Monero (XMR) Increased

Same thesis as the last time around - there is NO other competitor when it comes to privacy.

Once people starting actually using crypto and governments and banks starting doing chain analysis, privacy is going to get a lot more important.

Following BTC, XMR has the strongest store of value claim in the cryptocurrency space. I believe that soon, that property will be realized and highly prized, especially as XMR development continues to improve with Ledger integration and bulletproofs.

8. Aion (Aion) New

The thesis for this crypto is a bit more complicated. It's like a backup plan. For ETH scaling, for inter-chain communication, for deploying customizable blockchains. The roadmap is long, so I'd be wary and keep that in mind if deciding to dive deeper into this crypto. Here's a good place to start to learn more about AION.

9. Augur (REP) New

One of the few tokens with a structure that actually makes sense and is addressing a massive market.

Only question is how successful will they be with getting people to actually use their platform? It remains to be seen, but their mainnet is launching soon and I am looking forward to sitting on my lazy ass, clicking around here and there to fulfill my reporting requirements, and collect money for my work.

If Augur becomes the defacto prediction and gambling market, it'll be enough to make bank for me.

10.Havven (HAV) New

Havven's token structure is very similar to REP and DGD in that they are work tokens - tokens that award you the RIGHT to participate by adding in inputs, and consequently get rewarded for your contributions. It's not a dividend token - it's a work permit.

Havven is a direct challenger to other fiat stablecoins in the space. While Maker's DAI has been picking up steam, the Havven-Nomin design is much more intelligent to me. The team has been chugging along with development, deployment and pushing up milestones. The team is friendly and I chat with them frequently about the niche stablecoin space.

They are trying to tackle a huge market, but I think they've got what it takes to offer an excellent stablecoin to be used widely throughout the ecosystem.

Conclusion

And that's it folks. 97% of my portfolio is here. The remainder are in positions too small and inconsequential to mention and really not that fantastic.

My goal moving forward it to try and increase my portfolio in terms of ETH. I've been doing a good job the past few months. Realizing a lot of my DGD gains, which was such a massive position in my portfolio, is the main reason.

Please do not be mistaken, my strategic moves are not calls to take similar action. Almost all of these positionings were done more than a month ago. I sold high when I reduced my position, and I bought in low when I increased my positions. I've been consistently making strategic changes to my portfolio that helped me outperform the general market, so that's been going quite well for me.

Anyway, just wanted to share the reasoning I have behind my portfolio positions. Hopefully this sheds some light into the main thesis of certain crypto I hold and that helps you to consider your own holdings as well.

Good luck and remember to stay safe out there. Crypto is still as vicious as ever.

14 comments:

  1. [Alan Wong]
    Thanks for the update dude! Glad to know you're doing well :)

    ReplyDelete
    Replies
    1. Hi Alan, I hope you're doing well too!

      Delete
  2. Interesting selection.
    Why did you choose REP over GNO (I hold both and at the time GNO is the "cleaner" but less advanced product) ?

    Regards

    ReplyDelete
    Replies
    1. Hi Peter,

      IMO REP has the superior architecture and their release is imminent. GNO must be flying under the radar because close to no one knows what is going on with it.

      Delete
  3. hey,
    what do you think about OMG?

    ReplyDelete
    Replies
    1. Hi Anon,

      I think OMG is a good idea. I would consider it once they stop being vapourware.

      Delete
  4. xmr, i happen to accumulated more of this eth and xmr, these dips, Thanks for sharing.

    ReplyDelete
    Replies
    1. XMR is in a precarious position with the FSA coming down hard on privacy coins. I think it might take longer than expected for the market to truly value privacy.

      Delete
  5. Isn't Augur one of the "bad" Utility Tokens?

    ReplyDelete
    Replies
    1. No, Augur is one of the few utility tokens that cannot be forked out of its protocol and is an essential part of its own ecosystem.

      Delete
  6. "essential part of its own ecosystem"

    isn't that true for the most of the "bigger" utility tokens?
    there are only a few that really have no committing use case (like BNB; KYC and TenX).

    Take ICN, Ark, Salt or POWR for example (mostly shitcoins imo, but essential for the own ecosystem.

    ReplyDelete
    Replies
    1. All platform tokens cannot reduce their own platform token to anything lower, so they are essential - BTC, LTC, ETH, ICX, etc.

      If it is an ERC20 token, unless it has a strong utility case, it is possible to fork out the token in 90% of the cases and replace fees or forced native currency to be in ETH instead of the token.

      Augur's system cannot function without REP tokens and ETH cannot replace it and still make it work, hence it is essential.

      BNB might have no specific blockchainfunction yet, but it still has one of the highest value and most glaring obvious use case as a utility token - fee reduction.

      You are without a doubt better off buying and using BNB to offset fees than not. Though BNB is not essential in its own ecosystem now, it is always preferable to use it, therefore it accrues a lot of value as a utility token. It is one of the few tokens that a rational value can be placed on it.

      Delete
  7. Im with you with at BNB, the thing I meant (hard for me to explain in English) is that, things like BNB are a CAN, not a MUST (so it's good to use, but you don't really need it) and that's the same with KYC, TenX etc.

    If they can be replaced with ETH or not doesn't care, because you don't have to use them anyway.
    It's like a bonus for me, nothing essential.

    That makes them weak and instable for me (as a long-therm investment).

    Nevertheless I own some BNB and im using the exchange, but as I saw and tried some things like Airswap, I don't believe these kinds of old exchanges (Binance looks like written in q-basic...) and also most of the clunky ui dexchanges (ether delta, radar-relay...wtf?) can stand a chance against such easy and user-friendly sites like Airswap, Bancor or Shapeshift, if they can improve there token value.

    So Augur seems to be different but with such a strong intend on the normal user, it will be stand and fall with the UI/UX imo. At the moment it's clunky and not really "Jon Doe" -friendly, Cyndicator f.e.has a much better UI at the moment.

    I bought some REP (and as mentioned GNO) last year, because of the interesting and not much covered use case, so im not against it and hope they will get the UI thing "fixed".

    Just trying to separate the wheat from the chaff and invest not into more bullshit (on the other hand, even shit like Tron rises again... : )

    Regards

    PS: Forget to log in the last times, but I think you got the link.

    ReplyDelete
  8. Forgot one question:
    If you invest in a coin f.e REP because of strong fundamentals, doesn't it make sense invest in the underlaying base protocol too (0x in the case of REP)?

    ReplyDelete

Observe the house rules.