The Cryptocurrency Trading Journal

Daal said:
Here is a view: Its a lot of work for an uncertain payoff, why not just own, say, 75% BTC 25% ETH and call it a day? ETH has even been beating Bitcoin in last 15 months or so, I think thats what a core crypto portfolio should look like. So, now, an alt portfolio has to beat ETH as well (in my mind).
Maybe it can be done, maybe it cant. But if crypto is the future, that core portfolio (properly hodled) is likely to beat 99% of everything else out there. Why research for hours on end, having to dodge all the crap out there (all the stuff that youtubers love to pump), have a lot more volatility in the portfolio to at the end of the day, probably produce a worse risk adjusted return?
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Valid perspective and most likely more sensible.

Yet your comparison of ETH to BTC is also true of ALT to ETH. As for risk-adjusted, the rewards are commensurate with the risk.


Although I see BTC and crypto as a whole much higher than it is today, the market has to digest this new achievement and reality from a psychological view.
 
Daal said:
Here is a view: Its a lot of work for an uncertain payoff, why not just own, say, 75% BTC 25% ETH and call it a day? ETH has even been beating Bitcoin in last 15 months or so, I think thats what a core crypto portfolio should look like. So, now, an alt portfolio has to beat ETH as well (in my mind).
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The thing is Defi has completely trounced BTC and ETH. I'm mostly BTC/ETH myself and I have not been capitalizing on the moves in Defi. AAVE is up >100x in the last 12 months. So a core portfolio works but you need the alt exposure as well.
 
tsznecki said:
The thing is Defi has completely trounced BTC and ETH. I'm mostly BTC/ETH myself and I have not been capitalizing on the moves in Defi. AAVE is up >100x in the last 12 months. So a core portfolio works but you need the alt exposure as well.
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But how to manage these positions? Buy and hodl no matter what? Sell during a parabolic? Maybe the parabolic is happening right now and its time to sell DeFi. Not saying they are going down (in fiat) but at some point, they will reach a level where they are very unlikely to outperform ETH. Where is that level? How to decide that?
 
Daal said:
But how to manage these positions? Buy and hodl no matter what? Sell during a parabolic? Maybe the parabolic is happening right now and its time to sell DeFi. Not saying they are going down (in fiat) but at some point, they will reach a level where they are very unlikely to outperform ETH. Where is that level? How to decide that?
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Do you chart?

Here's an alt trade on ONE. Entered late on the Jan 29, exited early on Feb 11, re-entered on 13 when it broke out of the high of the 12th and exited on the 14th. The blue horizontal line is my bookmarks of initial entry and final exit.

If you are tape reading on tables, generally the one that pegs the highest daily performance change for a bit.

Untitled 34.png
 
https://www.economist.com/finance-and-economics/2021/02/20/bitcoin-crosses-50000
"The Bank for International Settlements, a club of central banks, last month said it expects one-fifth of the world’s population will have access to a central-bank digital currency (cbdc) by 2024."

"The latest big central bank to get serious about a cbdc is the European Central Bank (ecb). Its public consultation, seeking views on the desirable features of cbdcs, concluded in January, garnering over 8,000 responses. Speaking to The Economist on February 10th, Christine Lagarde, its president, said she planned to seek approval from her colleagues to begin preparing for a digital euro. A decision is expected in April. Ms Lagarde hopes the currency will go live by 2025."

Once a large chunk of the world's population have digital currencies, do transactions on a daily basis and have digital currency wallets in their cellphones, I bet lots of them will get interested on Bitcoin and ETH. The thinking will go 'why hold this thing that is depreciating? Bitcoin did X% last week'. And the infrastucture (wallet apps) and the familiarity will already have been deployed in a lot of users
 
Sprout said:
Do you chart?

Here's an alt trade on ONE. Entered late on the Jan 29, exited early on Feb 11, re-entered on 13 when it broke out of the high of the 12th and exited on the 14th. The blue horizontal line is my bookmarks of initial entry and final exit.

If you are tape reading on tables, generally the one that pegs the highest daily performance change for a bit.

View attachment 252354
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To me, this sounds a lot like swing trading equities, which I used to do but I'm no longer interested due lifestyle reasons. If that suits you, great. But I rather play longer-term themes that dont require constant looking at markets or scans for opportunity
 
Some folks are taking partial profits on Bitcoin right now, I'm not and here is why:

To recap:

-Paypal US has rolled out BTC buying on its platform and they are in the process of allowing other countries to join. They have 300M users

-By 2025, 20-30% of the world will have CBDCs and learn how to do transactions, use wallet apps and get familiar with cryptocurrencies. Some of them, will buy Bitcoin because they want to make money rather than lose

-Facebook will roll out its stablecoin this year, exposing its 2.8 billion users to cryptocurrency/wallets/transfers over the coming years. Some of them, will buy Bitcoin because they want to make money rather than lose

-US asset managers are being forced to change their mind on bitcoin in the face of overwealming evidence that they were wrong. Clients are also pressuring them into having crypto in their portfolios or face redemptions

-Twitter is said to be working on a function where people will tip each other for tweets using the Bitcoin Lightning Network. Essentially, 300M users worlwide will have a Bitcoin wallet and do transactions on it

-US corporations (with trillions in cash) are facing a 20-30% inflation tax (with the chance of a lot more as a tail risk) in their cash holdings in the next 10 years, some are moving to BTC, lots of others are likely to follow

Given this backdrop, if Bitcoin tanks 50% from here, its a buying opportunity so, I'm not worried about a correction. Given that I havent sold any coins that I have purchased nor I see any need to do so, if anything, I'm more optimistic than ever on the prospects of bitcoin. If bitcoin has a correction, great, its an opportunity for me to catch up on the technology and this space, which is so hard to do as there are new things everyday
 
BTCC the first spot bitcoin ETF has launched. I expect inflows to grow large over time unless crypto absolutely implodes, thus putting a bid into the market.
 
Here is a potential concerning trend for Bitcoin in terms of adoption:
If you take the annual average median transaction value (in USD) and divide by the average daily fee (in USD), what I call the Miner tax, its rising and it will probably go much higher during this bull market

upload_2021-2-19_10-21-11.png



This can turn-off new users to the network as they might find it costly to move funds around.
However, this all could be an illusion, because if you compare the cost of fees to the price of bitcoin (another way to think of it, is the increase of the price of fees vs the increase of the price of bitcoin), there is no worrying long-term trend

upload_2021-2-19_10-25-45.png


In other words, the cost of moving Bitcoin has not changed much IF you price it in Bitcoin/Satoshis

If Bitcoin is considered a country, the cost of moving funds inside that country has not changed materially since the country was founded but the cost for people that aren't in the country has gone up significantly
 
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