Well the market sure has changed since we wrote our last two articles but our current portfolio and investment strategy. You can view our first post about entering the market, and our update on ICO strategy to get caught up.
In short, not a whole lot has happened since that post went live.
Ok, well there was the whole on-again-off-again SegWit2x drama, plus the surge in bitcoin’s price causing money to fly out of alts and into BTC, and then there was the more recent bitoin cash-is-the-new-bitcoin-no-only-kidding drama that went with it.
But apart from that, not much happened.
But that’s just it!
When you’re heavy in alts and newly minted ICO tokens, and the whole crypto space is going crazy about bitcoin, it’s tempting to feel despondent.
Going from checking your Blockfolio account multiple times per day hour, to suddenly not checking it more than a few times per week can be depressing, and it feels like nothing has happened.
As you will remember if you read our lost post on the subject, our plan was to invest in a lot of ICO’s, and then try to cash out for 2-5x (or more where possible), while leaving some tokens still in place. We got a lot of people asking us how to actually invest in ICOs, so we even did this guide in the meantime.
The pros of this are that you get to take some profits, but you also leave enough on the table that you will benefit from the coin if it moons later on down the road.
It’s all about mitigating downside by taking some profits, while maintaining the maximum upside.
We debated whether or not it was better to take as much early profit as possible, or whether it’s better to just take out your initial and keep the rest..or whether it’s best to do something in between.
The truth is that it’s rarely possible to know what the best thing to do is, until afterwards. Hindsight is 20-20, who would’ve guessed?
We’re ok with not getting it right every time though, we knew we would be wrong a lot of the time. We also knew that many times we’d be right, but for the wrong reasons. For example when we sold 80% of our Chainlink, it might have been better to hold more in the long term, but hey, we made 4x on that trade, so we were right either way.
The problem is that during late October and so far most of November, there hasn’t really been much opportunity to do anything with our tokens.
We continued to invest heavily in September and the first part of October, putting around 20 ETH into different ICO’s in each of those months, with the expectation of getting similar results to what we had in August and September.
There were definitely gains to be had, and in any other investment they would all be considered solid gains, but in crypto, we all want to reach the moon in a week, so it felt disappointing.
Here’s a list of the investments we made in September and October. Or rather the speculations we made:
As you can see, some of these did pretty well, while the majority are still in progress. Based on current prices, we have a few that are in a losing position, but most are above ICO price, just about.
Here are some interesting observations though:
1.) The worst performing tokens all released at roughly the same time. Enigma, BCPT, AirToken and AirSwap were all released at a time when capital is flying out of alts and into Bitcoin, as mentioned below. Because of this, tokens were sold off as soon as they were released and as the projects are only now getting off the ground, it might be some time again before they rise.
This is definitely something to consider when thinking about a quick flip with a token. If you’re not bullish about holding the token for long term, it might be better to wait until after the ICO and buy in at the next dip (or in the case of these ones, below the ICO price).
2.) We’ve not sold any of our losers and we’re still holding some of the more underwhelming winners, so hopefully as time goes by, this picture will improve dramatically.
3.) Some of the ChainLink profits went into other ICOs and also into buying some GAS when it was in a dip, so this chart doesn’t show the whole picture. Many of the losses are actually just wiped out gains, which is confusing. A few more simple wins like Astronaut would be good though. With Astro, we sold 50% of the tokens at 2x price, meaning we’re guaranteed to have made 50% ROI, and still get to hold 50% of our original.
So What Happened To Easy Flips?
Markets change, and in late October a lot of momentum went back towards Bitcoin. This was, as most of you probably know, in anticipation of earning free coins from the Bitcoin Gold fork and then the Segwit 2x fork. When the latter didn’t happen, altcoins experienced a very brief surge, with money flowing out of bitcoin and back into alts.
Of course, then the whole Bitcoin/Bitcoin Cash war began and money flowed back into those coins again.
Essentially, this equates to about 6 weeks or longer where people had lost interest in alts and ICOs and basically were Bitcoin crazy.
Fair enough though, Bitcoin has clearly earned itself a bit of love.
With us, it left us in a bit of limbo. We didn’t want to fomo into bitcoin and buy at a near the ATH (which was about $8,000), so we were basically left with the option of holding onto our alts and waiting for the market to turn.
This isn’t that big a deal, because we knew things wouldn’t soar forever and we have always been prepared to wait.
We also considered putting more FIAT into alts to buy up the bargain prices. OMG, one of our biggest holdings was down around $6 briefly, and it was tempting to scoop up some more.
At the end of the day though, we just decided to wait it out. We already had a decent amount of capital assigned to our portfolio and throwing more cash at it in an attempt to feed the greed is probably not the best idea.
Interestingly, here’s something I saw shared from the Palm Beach group’s Teeka:
There’s some really good information in there about holding through the darker times, being patient, and thinking long-term, which is exactly what we’re doing right now.
It definitely shows that the strategies we talked about in an earlier post are not sustainable month after month though. Sure, we’ll be able to flip those ICO’s eventually (or sooner for smaller gains), but not at the pace we were
dreaming fantasizing salivating about a couple of months ago.
Would It Have Been Better To Just Put The Money Into Bitcoin?
One interesting question we’ve been musing over the past week is whether or not our money would have been better placed in bitcoin. We are 90% in alts, which some people will find crazy.
It’s easy to think of this as a mistake when alts are flat and Bitcoin is soaring to new all-time highs..but Bitcoin’s current price is still only 2x from what it was when we invested in most of the recent ICOs. We’ve made anywhere from 2-4x in most alts since then, and even though some of them are not looking that great now, they still have far more upside than Bitcoin in terms of pure gains.
Still, we might increase our BTC position during its next downturn, purely for the sake of diversification.
We were originally going to create a complex spreadsheet showing what would have happened if we’d put our money into BTC instead of alts, but then we realized, that’s the easiest way to drive yourself insane. There’s always a better move that could have been made, but as long as you’re increasing your portfolio size and getting good returns, you don’t really want to think too much about “What if”.
Even 2x in a short period is ridiculously good, which is why the crypto space is so fascinating, exhilarating, and addictive. We’ve got Cryptosis for life.