Trading Update: Sold BCH, Bought EDG, SWT, XZC & XVG
I finally sold off my Bitcoin Cash last week and used the returns to buy back into four coins I had previously sold off. I have been vocal in my support of Bitcoin Cash as I didn't fully understand the technical arguments of the two warring Bitcoin factions. As the 2X fork approaches, I have been spending some time following the discussions for big blocks v small blocks and am now firmly in the SegWit, small block, off chain scaling side.
The upcoming 2X fork is already leading to volatility in the market and currently, altcoins are under pressure. I am working on an article explaining my understanding of the arguments in easy to understand language, potential outcomes and how I am going to trade it. My goal is to have this written and published on the website in the next couple of days.
Regarding my picks I have been finding the market quite tricky to trade, after an excellent August, September was a tough month with the market crashing and moving sideways following news that China banned Crypto (maybe) and the increase in FUD from traditional banking naysayers like Jamie Dimon. While many panicked and sold, both Bitcoin and other leading market cap coins have resiliently held price and Bitcoin is threatening to challenge $5k again soon.
With Altcoins crashing hard recently, I am just riding this through with patience. If Bitcoin clears and holds above $5k, then we could see an altcoin rally. While most of my altcoins are now down, some quite heavy, they have also been the place where I have made high returns this year. It will be a case of holding and seeing, then adapting if the market requires it. Patience has always paid off during the tough times.
Now I understand the arguments for a block size increase v off chain scaling, I am a firm supporter of keeping the block size at 1mb and do not support the upcoming 2x fork. I had previously held onto my 'free' Bitcoin Cash while each camp pushed their agenda. The price of Bitcoin Cash has been in steady decline since hitting the exchanges as recipients of their 'free coins' have been selling off. This is only going to continue when Coinbase allows customers to withdraw their Bitcoin Cash in January; I believe that this will lead to another significant selloff and I don't hold much hope for the price of BCH.
While I wanted to support both teams I am also a trader, I have sold my BCH to invest in other coins, which you can read about below. I chose to reinvest the BCH money into four of my previous other fav coins which demonstrate a certain amount of stable growth.
Anyway, see below for the Bitcoin Cash chart, it doesn't make for pretty viewing.
I am increasingly weighting my portfolio towards currencies over utility tokens due to the natural upper limit of market cap. I am particularly interested in privacy currencies as I believe users will increasingly want to keep their transactions private with Crypto going mainstream. I don't understand the full technical differences between each privacy currency, so I hedge my investments across them all, though I am not currently in ZCash but am looking for an entry point.
Zcoin has demonstrated a consistent upwards trend, and although altcoins are under pressure, I am happy to have opened a new position.
Verge is another privacy currency and a coin I made some significant returns on this year. When I exited during the China ban crash, this was one I did consider holding. The price has made some significant jumps, and although this may be a risky investment, my position is small enough not to have a considerable impact on my portfolio should the price drop. Verge has a lot of vocal support in the Crypto community, and I believe that it will continue to grow.
This is a project I particularly like, and I also like the team behind it. Sadly they were a victim when hackers exploited a weakness in the Parity multisig wallet, stealing ver 44,000 ETH from the team. They are building a decentralised peer to peer sharing platform. While the price spiked massively and quickly retraced this year, it does tend to hold support, and the long-term trend is up.
Another victim of the multisig hack with nearly 27,000 ETH stolen but also another cool project. They are building an Ethereum based casino with 0% edge. With the current fall in altcoins, it appears to have lost support, but my investment is small enough to hold for the long-term.
Since I started writing this article, altcoins have been under pressure with most seeing a significant drop in price. I am going to hold out for the next few weeks to see how they recover and whether this will impact my long-term strategy. I am already weighted heavily towards the best performing top 10 Cryptocurrencies, the role that altcoins play in my portfolio will be assessed after the October Bitcoin forks.