Monthly Crypto Portfolio Update (Nov 2018)

It has been truly an amazing experience to see how the cryptocurrency market has reverted back to levels not seen since the Summer of 2017 when many say the actual bull market caught its bid higher and ICOs began to come to market at a very high rate. The interesting thought is that price clearly got ahead of itself as the value of the underlying market was still immature given the still small adoption rates and the lack of infrastructure to sustain the scaling of many blockchain projects. However, since the decline started, billions of dollar have continued to find their way into blockchain projects. While a fair amount went towards ICOs, another big portion has gone directly to the Companies building infrastructure to support the coming revolution of blockchain technology. However, given valuations of the cryptocurrencies themselves, it is unsurprising that they have since found their way lower.

Just like prices were irrational higher than their values early this year, we are now finding that prices have gone to far low and probably present a discount to the underlying value of the utility in many projects that have since grown and continued to develop the technology to support future adoption. Unfortunately, there is a saying that says “markets can stay irrational longer than you can stay solvent.” This may be the next phase that leads us to capitulation and a potential bottom. The next phase or wave will potentially be a number of projects, that like our Steemit Inc., have found it difficult to support development at current cost run rates given prices of cryptocurrencies used to fund them. In addition, more waves of SEC disputes may be around the corner. Thus, it may get worst before it gets better.

However, the calls for bitcoin and cryptocurrencies being dead are completely wrong as well. The amount of resources and talent behind blockchain related projects are at all time highs with continued interest from mainstream industries and organizations. While many will fail and others will need to partner with others to survive, a new breed of future tech leaders will be born and thrive. I recall the internet search engine space years ago that were a significant part of the Dotcom bubble; Infoseek, Yahoo, and AltaVista were leaders that eventually went away as a new players, Google emerged the winner. The same will happen with blockchain and cryptocurrencies.

This has been my thought process as I have reflected on the state of the market to consider next steps. I am personally at an interesting spot as I have now put all of my earlier cryptocurrency gains back into the market. On the bright side, I am still “playing with the houses money.” However, if capitulation comes it will force me to make a decision as to what to do regarding adding to the portfolio. Interestingly, this downturn in the market has come at the same time that I have made another significant decision in my overall invested assets. During November, I have sold all of my liquid invested assets in the financial markets! I will be taking a break from them until the new year while I consider how to re-allocate them according to my risk appetite. This has made for an interesting allocation as aside from my crypto portfolio, I have the ability to deploy more capital elsewhere.

While I will get back into those markets, I am focusing on two aspects; first, I will be paying down some personal debt to improve my available cash flows. This will allow me to be able to have more risk in my overall portfolio over the long term. Second, I want to consider how I can leverage my new found knowledge in blockchain technology to invest in projects that will come back stronger after this current bear market. Those that are #STEEM related will be my main focus but I will also look at other ventures in an effort to diversify my exposures. Given the recent challenges seen in the community, I am looking forward to seeing how these efforts could align to mine for allocating some of my capital to assist the community. For example, I saw this weekend that @utopian-io is seeking to issue shares to potential investors. It may be worth the research given the great things they have done for the ecosystem.

Although I made very little changes in the crypto portfolio this month, I did start to add additional positions into my core holding. I have started added to my Litecoin position as I will be using the currency to fund my #STEEM purchases in the future. In addition, I think that Litecoin is poised to be a partial winner of the recent Bitcoin Cash split. The Litecoin community is still a strong community focused on the long term prospects of the protocol. I have also started to add to my Ether position as the price is attractive considering that the rumors are that the move to Proof of Stake (POS) will be done early 2019 only requiring to stake 32 ETH which at these prices could prove to be an interesting passive investment in cryptocurrencies.

Most of my efforts this month were around #STEEM. I have deployed more than my usual amounts into #STEEM given how attractive the price is. My plan is that I will continue to do so as I think that it is now possible for me to reach Orca some time next year. While I would like to achieve that goal by mostly earning it, these prices will make the goal much easier to achieve. Given my recent experiences with converting SBD to STEEM, I will also start making some purchases of SBD if the discount continues to be as large as we have seen it recently.

Talking about stablecoins, I am also considering allocating a good portion of my invested assets into stablecoins in order to have them readily available to transfer to exchanges and buy other assets that seem very attractive in my opinion. I still believe that the positions I hold are those of the few that will survive the collapse and find a way to thrive in the future. I am also looking at adding new assets to the crypto portfolio. One sector I am looking closely at are gold-backed tokens or coins. I am putting a list of those together for some due diligence but any thoughts to feedback will be appreciated.

I wanted to end this update by saying that speculative markets, as we have learned, are not for the faint at heart. These are the reasons that you should always follow important rules when considering getting involved: (1) never invest more than you are willing to lose, (2) always do your own homework, and (3) make sure your everyday finances are in order before investing in anything.

Are there any assets you have considered that may be interesting? How are you adjusting to this bear market? I would appreciate to get your feedback and thoughts in the comments below. I look forward to your engagement!

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