Daily crypto update - the unstoppable Bitcoin (12th Aug '17)

The August bull run is showing no signs of slowing down and Bitcoin has hit another all time high of $3,862.68 (Coindesk). $4k is approaching, and I expect we will sail straight through to $5k very quickly.

$5k is another important milestone. We are already seeing more and more news about institutional investors joining the crypto market. While the naysayers will likely never be convinced, those on the fence will likely want to join the run and I expect there will be a rush of investors setting up specific crypto based vehicles. 

Like any significant milestone, we could face a short term sell off, likely before $5k, around $4.8k. as targets are reached and investors look to take profits. I expect this will be followed by another rally and Bitcoin will start to become mainstream. 

The last point is important, while Bitcoin is, for some, a store of value. I believe it requires utility. I am hopeful that there will be players in the market who look to support retailers adopt both Bitcoin and other crypto's as a means of payment, alongside Paypal, credit and debit cards.

I have been increasing my Bitcoin position this week as I have sold off some of my NEO and I will continue to grow it further. It is currently at 15% of my portfolio, I would like to get it to around 20%.

In other news there has been plenty of big moves in the last 24 hours. Some of my sleepers have awoken:

  • Cofound.it, my only ever ICO is back in profit after falling quite significant since entering the exchanges. Up +93.5%. WOW!
  • Komodo, those who are part of my Facebook group know I have been shouting about Komodo for a long time. I discovered it as one of the coins supported by my Nano S, it felt like the odd one out and quite random so I researched and invested. +48.9%. WOW!
  • TokenCard, one of my old punts, which has been dormant since the June/July crash. +48.2% . WOW!
  • Matchpool, another old punt but a great idea. +46.9%. WOW!
  • Swarm City, an old punt which haemorrhaged at first and then was the victim of the Ethereum multisig hack. I felt so sorry for them as the team is really hard working and they are trying to build a really cool product. +45.8%. WOW!
  • iExec, another punt which has been sleeping. +43.9%. WOW! 
  • Mysterium, an investment I went out of my normal rules and lost money on at first. +38.3%. WOW!
  • TAAS, a punt which hasn't been doing anything for ages. +33.4%. WOW!
  • Time, another sleeping punt. +29.2%. WOW!

Wow, Wow, Wow!

As I mentioned in my daily update on the 8th August, the altcoin market has not recovered to its original market cap, as Bitcoin has. We are about to reach that point now. The market cap for all altcoins on June 20th was $72.8bn and as of today at $71.3bn.

The recovery of altcoins means a couple of things to me:

  • Firstly, market confidence is returning and investors are speculating on smaller altcoins. These always present a good opportunity for great returns.
  • Secondly, it is time to trade with caution. I expect the Reddit memes to start flying and altcoins to start pumping. This means an increase in volatility and price spikes.

If the market growth starts accelerating then I will start to look for the signals of a crash coming. They were there before:

  • Altcoins with little value exploding, known as shitcoins
  • Bubble news is increasing
  • Sudden market crashes

There were three very big sudden market crashes in the build up to the June/July correction:

  • On May 20th my portfolio crashed 32.2% then to recover and make new highs.
  • On June 15th my portfolio crashed 16.5% to recover and make new highs.
  • On June 27th my portfolio crashed 21.3% to recover and make new highs.

What followed this was plenty of up and down days as we were entering a correction. This is where I made a few fundamental errors, specifically:

  • I didn't keep to my 5% for 25% crypto to fiat conversion, a key part of my strategy, as such I was too heavily invested in crypto, and my portfolio got hammered.
  • I actually traded my 5% out back into coins as I felt they were cheap, not fully appreciating the market was dropping.
  • I didn't trade out of my altcoins back to my stable long term investments, Bitcoin, Dash and Monero, as such, when the market corrected my portfolio, dropped harder than it should as altcoins always take a bigger hit.

I did though remain calm, I didn't panic, and my portfolio has nearly entirely recovered.

Therefore, as the market is booming, I am enjoying the gains, but I am more cautious than ever. I am not being greedy and keeping tight to my strategy.

With the rest of my portfolio:

  • NEO: the run appears to be over, while I missed one wave I am comfortable with the profits I made. There is a good chance we will retrace down now for a while. I am bullish long term so will be looking for a new entry.
  • Iconomi: made a good jump yesterday on the back of the news that they have signed up Columbus Capital LTD as an asset management partner, very bullish long term.
  • Basic Attention Token: continues to recover, I bought a huge position at totally the wrong time, and my holding dropped 65%, I am on track to recover and will also be holding long term.

There are a few I have missed out on and two I specifically want to enter; I am just waiting for the right time, TenX and OmiseGo. I had taken my eye off the market for new investments during the correction and missed a significant opportunity here, oh well, you win some, and you lose some.

In other news, one of the members of my Facebook Group posted an article about Bitfinex, where they are suspending approvals for US customers and restricting trading for those already approved. The fear being how this may affect tokens traded on Bitfinex such as IOTA and EOS. I think these changes are only natural as the US government tries to get a grip with cryptocurrencies. Coinbase appears to have worked to build a platform which the US government, likely reluctantly supports. I don't see a huge impression on the market with this news.

Anyway, happy trading, shout me if you have any questions.