Tag Archives: portfolio letter

My Bitcoin and Crypto Portfolio: the 7th issue

Published / by kgao

Hi everyone, sorry for the delay.

Here are the assets that represent 1% or more of my portfolio, from largest to smallest:

  • BTC
  • ETH
  • XEM
  • DASH
  • LTC
  • BTS
  • XMR
  • ETC
  • ANS
  • PEPECASH
  • XRP
  • XCP

Here is my monthly performance. June results will be in the next update. I will likely underperform BTC in June after a nice streak, due to the general altcoins market tanking while BTC held surprisingly steady:

Some thoughts:

  • I have been reducing investment in small cap altcoins (anything outside the top 10-20), and increasing portfolio weight of BTC and a few “blue chip” coins. My current favorites include LTC, XMR, and DASH
  • Crypto-experts like to hate on DASH, and I went through a period of that myself, drawing down my DASH position by over 50%. But today I think the community and network are in as good a position as they’ve ever been. One of the few which has the potential to “cross the chasm” as a digital cash and payment network
  • A small bet I’m excited by is Etheroll (big believer in gambling on blockchain, plus the token pays a dividend of earnings, the first dividend is August 1st)
  • I don’t have a strong view on the UASF / Segwit2x debate. Volatility will likely increase as we draw closer to August 1st. My position hasn’t changed: I’d prefer a hard fork and two separate implementations of Bitcoin and an end to the current drama. Similar to the ETH-ETC hard fork, I believe this will eventually maximize ecosystem value. My only advice is to store your Bitcoin in a wallet where you control the private keys, to maximize your choices in case of a hard fork(s). Two good software solutions include Electrum and Armory Wallet, which both have multi-sig as well. Regardless of the outcome, as long as you don’t panic, your BTC will do just fine
  • I’m less active on the investment front, because I don’t have a strong view of the market anymore. Previously I was convinced that cryptocurrencies would surpass $100 billion. I just thought we’d get there by 2020, not in early 2017. Now we look to the next benchmark. Will cryptocurrencies hit $1 trillion? There will be much more regulatory oversight and coercion risk from nation states. There will be more governance risk and technological risk within each cryptocurrency. If you add a zero to everything, you also add a zero to every hack, fine, and scam. A big driver to $100 billion was hope and speculation. $1 trillion will require more proven use cases and much greater scale. The use case of store of value alone could get us there, but given the speed of the market’s rise and the uncertainties on the road ahead, I am in wait-and-see mode
  • I haven’t participated in any ICOs. Several have interested me (including FunFair and Tezos) but my current take is that if the token becomes publicly traded, I will take a position then. A good investment in this space should return at least 50x. The downside of missing the ICO is forgoing 2, 3, maybe 5x short-term returns. The upsides are more time and data to vet the investment, reduced risk once it becomes “publicly” traded, and a simpler safer path to buy and hold your investment.

Thanks for reading. Happy investing!

Kevin (@kgao)

My Bitcoin and Crypto Portfolio: the 6th issue

Published / by kgao

The full version is on Steem. I’ve been testing Steem for a few weeks now since I’m a small holder of its tokens. They make publishing pretty easy, but still no real community or audience to speak of.

As of today, June 14th, the following assets and tokens are more than 1% of my portfolio, in descending order:

  • BTC
  • ETH
  • XEM
  • BTS
  • DASH
  • XMR
  • LTC
  • ETC
  • PEPECASH
  • ZEN
  • XCP

This isn’t investment advice. IANAL. Crypto is due for a large correction. August 1st could be a trigger.

You can now easily subscribe to my twice-monthly newsletter here: https://www.getrevue.co/profile/kgao. Existing subscribes are being ported over.

You can read the full version on Steem. Thanks!

Kevin (@kgao)

The 4th Bitcoin and Crypto Portfolio Letter

Published / by kgao

Hi everyone, it’s been awhile since I sent an update. But if the crypto market continues to perform the way it has, I should probably just shut up 🙂

The following assets represent >1% of my current portfolio:

  • Bitcoin: 57%
  • Ether: 23%
  • NEM / XEM: 6%
  • Dash: 4%
  • ZClassic: 1%
  • Pepecash: 1%
  • Monero: 1%

And these assets are sub-1%: Litecoin LTC, Ethereum Classic ETC, Zcash ZEC, Decred DCR, Emercoin EMC, Counterparty XCP, Aeon AEON, Storjcoin SJCX, Ripple XRP, and Bitshares BTS.

A few weeks ago I sent a summary of investment theses. Thanks to those who gave feedback and asked questions and challenged my thinking.

The crypto market is doing very well. My cautious prediction was $100B USD total market cap by 2020 but we may see that before this year is over! Regardless of whether or not this constitutes a “bubble”, I think the fundamentals of crypto are stronger than ever. Innovation. Experimentation. Talent. Growth in multiple use cases. Software is eating the world, and crypto is eating money.

My investment strategy is currently a mix of:

1. Hold big positions in the leading assets with the strongest fundamentals – eg, BTC and ETH. My target is probably closer to 50% BTC instead of the 57% today

2. Take sizable “flyer” bets on interesting assets that could see breakout price growth in the next 3-6 months – eg, ZCL and Pepecash (I’m writing a separate long essay on Pepecash to clarify my thinking and explain what the hell it’s all about, but it’s perhaps the only asset I actually enjoy following, as opposed to most of the rest in which greed now predominates)

3. Diversify into different use cases of coins and assets because long-term, we don’t know who will win and what use cases will prove popular – Dash for its marketing and self-funding and potential to cross the chasm, NEM for its Asia presence and hybrid of private + public chains and quietly competent development team

I still need to calculate my April returns versus benchmarks and will share that when it’s ready.

Two general interest links for you to read:

“We have the tech of 93 combined with the hype of 99.” – Sergej Kotliar

Cheers!

Kevin

Bitcoin Portfolio Letter: -Dash -Litecoin +Bitcoin +Monero +Decred

Published / by kgao

Given how fast crypto moves, I’m switching to a weekly letter, with a caveat: I will alternate between a “portfolio letter” which shares what I’m buying and selling, and a “news letter” covering happenings in the space. Today is a “portfolio letter”.

Overall performance:

In February, the Bitcoin price increased 24%. My portfolio increased 29%, so I outperformed slightly, due to Dash’s price rocket and Ether’s rebound. In January the Bitcoin price dropped 5% and my portfolio dropped 2.5%.

Recent trades:

Sold all of my Litecoin for Bitcoin. It had consistently underperformed Bitcoin and it hit me I had no reason to continue holding. Was only a 1% position. Not a good hedge against Bitcoin due to its strong positive price correlation, and no demonstrable progress on either technology or community.

Sold 2/5 of my Dash position at prices ranging from $45 to $75. I still hold 3/5 of my original Dash position which was acquired around $17. Believe it can be a $1B market cap asset, but I took some profits because the pump happened too fast and I have real concerns about its long-term viability, foremost among them the depth of its team. At its current price of $86 I would only buy a very small position if any.

Increased my Monero position to 3% of the portfolio and believe it will be the leading privacy-first coin. I remain interested in Zcash as well, but believe its inflation rate is still too high and past price performance too anemic to justify an investment.

Bought a tiny amount of Bitcoin after the ETF denial when it had fallen to $1150, about 1% of my total Bitcoin holdings. I remain very bullish, but I also believe that on the back of the ETF denial and the ongoing hard fork risk that Bitcoin’s market dominance will drop below 75% of the total crypto market cap.

New assets I’m looking at:

Decred – I took a small position today at ~$5, about 1% of my total portfolio, and will watch it closely before investing more. They have a similar appeal to Dash: a more clearly delineated and decentralized governance model, and a self-funding block subsidy for development and marketing. Also like Dash, you can earn a return by staking your coins and I may do that.

ShadowCash – Pass for now. Despite its recent price increase, I have too many concerns about the team’s reliability, the quality of technology, lack of a rigorous 3rd party review, and the premine. When the ShadowMarket marketplace launches I’ll take a look at it. If privacy is your bugaboo, buy Monero.

Augur – Pass for now. I remain skeptical of decentralized prediction markets. If prediction markets are so useful, why haven’t centralized ones succeeded? Not sure decentralization brings enough value to suddenly make it work. At current market prices, what they raised in the crowdsale would be worth $50-60M, and the total market cap is $88M. Seems to me they *should* have plenty of runway and budget. I’d like to see some proven use cases or demonstrable growth in usage and engagement before investing.

What assets are you looking at? What should I investigate?

Random fact
Robert J. Greer, a pioneer of asset class theory, defined 3 categories of assets:

  1. Capital assets (eg, equity, bonds)
  2. Consumable transformable assets (eg, grain)
  3. Store of value assets (eg, fiat currency, gold)

Assets can belong to more than one category. For example US Treasury Bonds are a capital asset, but also a store of value given its federal backing.