Monthly Crypto Portfolio Update (July 2019)

The cryptocurrency markets finally took a rest this past month as the rally that we have seen since the beginning of the year started to slow down. This was not too surprising as valuations were a little too high to attract new investors into the market and already participating investors to buy more. The positive note of this is that the sellers continue to be less than what we have seen in the past which continues to confirm my opinion that we are in the mix of a new positive trend for cryptocurrency assets.

Unfortunately, the experience for Altcoins has been worse off than for bitcoin itself. As the general market decreased from $313 billion in market capitalization to $278 billion this month, as bitcoin dominance surged from 60% to 65%. That has brought plenty of pain to a lot of Altcoin investors which had started buying correlated assets in search of better returns with less capital. However, bitcoin continues to outperform wherever the market goes. While I don’t expect this trend to continue, I believe that the problem continues to be the amount of assets available in the market relative to the interest of investors. Until a large majority of these projects fail and the value of their assets or tokens go to zero, it will be unlikely that we see substantial returns in excess of what bitcoin provides.

An indicator that I am watching once again is the market capitalization of Tether which continues to increase as many investors seek entry into the market. However, they choose to park their money or capital in Stablecoins instead of actual assets. I believe most of the funding has come out of the altcoins instead of bitcoin. Until Tether’s market cap decreases below the top 10 in the market, I do not think that the general cryptocurrency market can move much higher. This is an interesting concept to watch given all of the complexity and rumors surrounding Tether and the companies that manage it.

This past month has also brought me renewed interest into the traditional financial markets given how it seems that volatility is looking to make a return. However, as I have been out of the market since October of last year I am still somewhat hesitant given the challenges of understanding this market in the many moving pieces investors cannot control. However, the uncertainty in these markets is leading me to come to the conclusion that cryptocurrency assets could be a great way to hedge our exposures to general financial market and economic conditions. Therefore, I have continued to buy the dips.

It continues to take strong willpower to do so as the whole industry continues to be somewhat experimental as its market capitalization still continues to be overshadowed by virtually every other that asset class that exists in the market today. However, my thought is that being and early investor will pay better “dividends" in terms of gains in the future. That is why I continue to deploy my dollar cost averaging strategy in certain assets and opportunistically buying others. This past month, I continued to accumulate both Steem and DAI. What I have begin to realize is the opportunity I have in ultimate been diversifying into other assets with these purchases. However, my main source of funding continues to be from Fiat currency.

I also bought the dips in each EOS and Ethereum as I see them as great opportunities for the future of the asset class and the potential of platforms to proliferate as the overall blockchain technology continues to expand its adoption. While they are not necessarily dollar cost averaging strategies, I am looking to add to the position for the ability to use them in the future to gain additional passive income. While I have yet to figure out how to really do achieve this on EOS, I am trying to accumulate enough Ethereum to prepare to stake it once the protocol is upgraded to Proof of Stake (POS). It has been great to see how these allocations have started to make a difference when looking at my overall portfolio regarding more diversification.

I am quickly approaching the first goal I had this year of getting my invested assets to be about 20% of the whole which is somewhat intimidating. However, I continue to see how there are many paths being developed to improve and increase adoption in this asset class over time. I also see it as a solution to the many fiscal and monetary concerns I see as an individual looking for ways to protect my value of what I have been able to accumulate in life. I continue to be comfortable with the idea of increasing it more as I still continue to build a position in stablecoins which will allow me to be more flexible in the future. This position is meant to be a closer gateway to increasing my exposure to the asset class over the long-term.