Baron's Crypto Trading Journal

Baron said:
I'm going to start with $25k and allocate that capital immediately across various cryptos that interest me. I will throw in more capital periodically as I see fit with no upside limit involved. think of it more as a crypto accumulation journal, one in which we'll be buying a basket of cryptos and evaluating them over time. Some will be strong, and others will be weak, so we'll be ditching the ones that are performing poorly relative to the others in the group, especially if there are underlying fundamentals that have changed in an unfavorable way. And of course, we'll be hanging on to the ones that are generating substantial returns, and we'll be looking to add size in those along the way as well.
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This is a good strategy. Looking forward to hearing about it. Another thing you can do is take small profits on each move to the upside and then buying back in when it dips. But I've been working on my portfolio, this is my ideal plan...

30% Ethereum
20% Polkadot
20% Cardano
15% BNB
10% Chainlink
5% Shibu
 
I had an account at Coinbase at one time and I must say that I'm not a fan of them at all. Whenever I interacted with a real human there, I was not impressed with their customer service on any level. And the fact that they just make decisions out of nowhere whether customers like it or not (such as stopping all trading in XRP because of SEC lawsuit) is extremely irritating.

So for me, Gemini is way more attractive. They seem to have their act together and are growing by leaps and bounds.
 
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WOW!

Underperforming fundamentals? What are the fundamentals in crypto that can be analyzed?

Why crypto and why accumulation only?

I have never had a conversation with anyone that could explain crypto to me as a good investment other than it is going higher. My values/standards are to be able to come up with a back of napkin analysis for an investment that gives strong reasons for future value. For a vaccine company, that might be using expected utilization rates, pricing models, recurring need to come up with sales/profits/market cap. Same thing if it were an auto company. For futures markets, there is worldwide demand for corn or lumber that can be followed and understood. They get eaten or used and need replenishing. For autos people replace aging models with modern tech. But my judgement is that crypto is different and a greater fool trade. I have zero currency experience or exposure.

Thanks for sharing your old story. We need more success stories shared. It has been tough to learn of success in the markets, tough to find real or virtual mentors, and an uphill BATTLE to do well. ET indeed fit the bill of helping with the isolation (though I had to find my own path to success).
 
nursebee said:
WOW!

Underperforming fundamentals? What are the fundamentals in crypto that can be analyzed?

Why crypto and why accumulation only?

I have never had a conversation with anyone that could explain crypto to me as a good investment other than it is going higher. My values/standards are to be able to come up with a back of napkin analysis for an investment that gives strong reasons for future value.
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Crypto is a generic term that encompasses a lot of technologies and industries. So when we talk about fundamentals that can be analyzed, we first need to dial in and specify which crypto asset or project we are talking about. Since crypto assets like Bitcoin are based upon a blockchain protocol, the blockchain stores the entire history of bitcoin transaction data. That means there are many valuable fundamental pieces of information that are stored in the blockchain that can be analyzed, and it's information that wouldn't be accessible in the world of more traditional investments like equities.

For example, let's say Bitcoin takes a big hit to the downside. Using blockchain data, we can identify the bitcoin addresses that have only received incoming BTC and never transferred or sold any, and we can see how that rate has changed over time. Likewise, we can identify newly created BTC addresses and see how much was recently transferred in and out. We can also see how much BTC that various addresses are holding in those wallets. And just using the data I described, we can easily tell if any of the nosedive that just occurred in the price is coming from fairly new traders with small wallet balances, or long-term holders, or whales (meaning those that have at least 1000 BTC). That's important data to collect because it can tell you how significant or insignificant the downside pressure is coming from. If it came from a bunch of new traders with small wallet balances, then it's probably a great idea to back the truck up and buy more. If it's coming from long-term holders (or hodlers as they are called), or if it's coming from large players, then that's a different story altogether.

In regards to your question about why crypto, why accumulation only, and why it's a good investment, I will just say this. Cryptocurrencies and crypto assets are the future of finance and money. It's faster, cheaper, stronger and more efficient than anything our current financial system provides. It's disrupting the very concept of money, banking, investing, and even industries like music and art. In other words, you want to invest in it not just because it's going up but because it serves as the foundation for the next century's financial future and beyond. Aside from the creation of the internet, we've never seen anything this disruptive in our lifetimes.

Funding a crypto account is a perfect example of this. If I had $25k in various cryptos sitting in a wallet, I could transfer them into my account and the whole thing would be done in less than 30 minutes, and I could do it on any day and at any time of the day. But because I'm trying to transfer USD in the account from a bank account using ACH, it takes 5 business days and I can only send $5k at a time per transfer. So you can see just from that one example how transferring value in the crypto space is way faster, more efficient, and a lot more convenient than using the legacy banking system. And that's just one tiny example from a million to choose from.
 
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I am not completely sold on the crypto as a currency idea, but I do see it driving innovation in the financials world. Your example of ACH transfer is an excellent point, and I believe is one of many areas where the traditional finance world has gotten away with using inefficiencies to their benefit. They really had no reason to improve or make it quicker (I believe they all ready can) as most likely they make a few cents on the float between leaving one account and arriving in the other account. Similar to money coming back to your account after a refund or similar transaction. No problem debiting the day you pay, but getting it back is another story. In both cases I get the story they need to make sure the funds are actually available, but again today that should be a less than one day process.
To me the old guard will have to adapt and start playing at the level of efficiency that crypto is offering or they will lose ground and income.
A basic my 2 cents, and I do like the idea that the financial system is being challenged and will need to adapt and improve to stay competitive.
 
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