When it comes to crypto, my investing philosophy is relatively simple. I approach investing in cryptocurrencies as similar to startup and venture capital investing. When it comes to startup investing, it's typical that money will be tied up for years on end and the success rate of each investment is very low.
Despite this low success rate, startup investing can be extremely profitable. This is due to the exorbitant profits that are earned from picking 1 or 2 startups that end up taking or creating a huge market share.
In my eyes, crypto investing is near identical in this way: It's likely that many of the thousands of random cryptocurrencies are going to fail, but the ones that succeed, will succeed so big that they will obliterate the losses on all the other investments in a well-diversified portfolio.
So that's why I buy an almost equal weighting in each crypto (excluding Bitcoin, Litecoin and Ethereum - a larger weighting is given to these currencies). By purchasing an equal weight in a large set of cryptocurrencies that appear to be fundamentally sound, I'm hoping that just a small percentage of the portfolio's holdings will actually pay off over a 2-10 year outlook. The goal is that these few successful currencies will gain such a large market share that they will completely outweigh the losses of the majority of the holdings in the portfolio.
I do also very occasionally pull out profits from some of these investments to cover certain costs and also expand the portfolio. I time the selling of small portions by waiting for an exuberant run-up (50%+ in 24 hours) and then selling a very tiny portion of the holdings and re-allocating elsewhere. Oftentimes, the price will cool back down and then I'll decide whether or not I'll add back to the position.
*NOTE that I never sell more than 20% of my position - thus, the portfolio usually doesn't change much, excluding a few outlier situations which I will discuss in future posts.
That's pretty much the whole strategy. The only other point I'd like to add is that I do very extensive research before adding a crypto to this list. I need to understand the technology (as best as I can), I need to love the team and what they stand for, I need to love the mission, I need to see the vision, I need to know the viability of the end-product, I need to research the industry and market needs, etc. etc. etc.
My next post today will discuss the specific weighting % (and the reason for certain weightings) of each of crypto in my portfolio. In case you missed the last post, here's the portfolio list once again:
My Current Portfolio (in no particular order):
- STEEM
- XZC
- NEO
- NAV
- BAT
- ARK
- GNT
- OMG
- MYST
- ANT
- BMC
- BTC
- LTC
- ETH
- DNT
- XVG
Disclaimer: This is not financial advice. Invest only what you're willing to lose. This content is for entertainment purposes only. Thank you!
Thanks for reading! Here's the Question of The Day, don't forget to post your answers in the comments!
This is an amazing strategy but it's so difficult to do! Haha. Especially when you see the charts and you see that a coin you didn't invest in goes up by 100%. FOMO starts to set in big time. Although we're investing our money into crypto, the biggest player in any investment strategy is our own patience.
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🙏🏽 Thanks! I know the feeling! But worse is the feeling of having owned a crypto that goes up 100-1000% after you've sold it!!! I had this experience with Bitcoin earlier in 2017! Although I kept most of my position, I sold a few Bitcoin and continue to struggle with the emotions! That's when I devised this strategy of "startup investing"... Patience is the biggest factor and 🗝 to the biggest profits
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This is such a great strategy and your portfolio seems really extensive! I have also followed many of the crypto currencies and altcoins that you have listed! I will be following you along with your strategy in order to reap the most success possible, thank you very much for posting!
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I can't wait to share each crypto individually with all of you! This list represents some of the most exciting crypto projects imo. Thanks for reading!
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You're welcome @khaleelkazi!
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Thanks for opening up your portfolio. Looks like you are very diverse in your holdings. Just curious how long have you been investing?
I have only been on for about my fifth month and do not have much beyond BTC, Steem and SMARTs. Wondering when one needs to start diversifying more? When only new coins show or play catch up and invest in several coins? Thanks.
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I used to trade options on the stock market before getting into crypto earlier in 2017. Like many others, I actually looked into mining Bitcoin several years ago and ended up not pursuing it, which is painful in the afterthought.
If it were me trying to diversify my portfolio, I would start to research as many cryptos as possible while disregarding how new they are or what price they are at. I think too many people are concerned with buying the newest and shiniest thing, when in reality they should be focusing on the fundamentals of a project. Like I said, I look at these cryptos like startups - the one's who seem to have the brightest possible future are the one's that get added to my portfolio. In my opinion even 1000% gains are nothing when it comes to the long-term value of the cryptos that will be prosperous over the next 2-10 years. I believe that investing in just good 1 crypto and hodling it for a few years can more than make up for any losses in others.
A good place to start may be this list, but I also would tell you to go outside the list and outside my reviews of each crypto and do your own research as well. You should never trust other people's opinions without fact checking, not even mine!
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Nice, been looking forward to this. Your logic makes sense to me, I have a quick question for you, How do you decide to buy into something new? Do you just research what you think will do well? Do you like to buy coins when they are still cheap or do you typically choose from the top 100?
Either way I appreciate the advice in the post. I'm just starting out and really need to diversify a bit. Also, bonus question: any reason you don't have any BTS or VEN?
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I don't really pay attention to the top 100 too much. I look more at the fundamentals of a crypto - their mission statement, their team, their capital, the viability of their end product, etc. etc. etc. I research as many cryptos as I can, I feel the more I research, the more I'm able to sniff out the best potential investments (even researching the bad ones/failed projects has proved to be immensely valuable!!). As for finding ones to research, I usually get them suggested to me by family, friends and fellow Steemians (like yourself!) and then I follow-up on the research. I never trust anyone's opinion at face value without diving into the crypto's whitepaper myself.
I haven't researched VEN yet, but I'll add it to my list! Thanks for sharing that. As for BTS, I actually own a very small portion, but not enough to worth noting in this portfolio. I had a significant position in BTS earlier in 2017, but sold most of it because of a few issues I had with news and the direction of the platform. Although, BTS has been recently piquing my attention so I'm doing more research and may add it back in the near future.
Thanks for reading and supporting as always @jakeybrown, it is greatly appreciated!
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I would encourage you to investigate on BTS. It would expose your portfolio to DEX, which is, due to classic exchanges being hacked, and the fact that you do not own the private keys on such exchanges, going to see rise in popularity. Not to mention this: https://www.twitter.com/bitfinex/status/947507382183186432
Also, when you have no problem having both ETH and NEO, why not throw in some EOS?
And finally, there are rumours of XVG starting to fall apart.
God bless!
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You are exactly right. Diversification provides a balance in your portfolio. The price or popularity of the crypto today should not influence our decision to buy as much as the mission and the team of that company. Your method is safe although tedious. After success in one area you don't sell of the whole coin but take a little part and invest in other areas. Sounds like a great plan. You will be the richest man in Babylon. But I don't see myself able to manage that many coins. Please excuse my ignorance but how do you manage with so many wallets?
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Thanks @mineopoly! Exactly, people are too focused in the shininess of a crypto rather than the fundamental technology, this is what causes bubble markets and can be very dangerous if not approached properly. This method is very tedious, but necessary to make the kind of gains I'm expecting from cryptocurrencies in the long-term. I hope I'm the richest man in Babylon!!! That made me smile, great tie-in!! 🤴🏽I'm not going to lie, the wallet management is rough. I have several hard wallets and also use paper storage and 3 different exchanges. I'm of the opinion that no centralized authority should have access to my private keys, so the vast majority of my holdings are kept in cold storage or via hard wallet. It took me many months to figure out the best practices for holding crypto and I'm still learning more as time goes on. Investing in crypto and posting on Steemit has become my full-time job, so I have all day to play around with the technologies and get accustomed to them
I'm planning on writing a wallet guide soon that will help people out with deciding on a wallet and then setting it up properly. The information on security in crypto is so scattered!
Side note: I'm actually getting into real estate investing soon (my parents have been doing real-estate for decades and are going to go 50/50 on their next project with me so that I can learn the ropes and also diversify my crypto holdings into more real-world assets!) 2017 was an amazing year for me financially and otherwise and 2018 will be even better! Steemit has changed my life as well and I have a lot of exciting projects and news coming up with the launch of SMTs!
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I agree with your strategy. Your desire to understand the technology behind the investment makes sense.
What I did learn was the idea of patience with startups and the diversity of startups needed to find the needle in a haystack.
Thanks for the sage approach!
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Thanks @sequentialvibe I'm all about understanding the fundamentals of anything before investing in it. It baffles me that so many people can just buy something because "Johnny" told them to do it. People need to get into the habit of understanding at least the basic fundamentals of cryptos before just blindly buying into them, imo. Thanks for reading and supporting as always!
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I am thinking of experimenting a bit with mining, just for fun actually. track my progress and ine some easy to mine coins. I recently got some hardware (older pc's) for free that are quite low powered, but efficient. It will be mostly cpu based as 2 of them had old Xeon's in them. As I am a stdent and don't have much bank to invest I was thinking building a (small) portfolio this way.
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Mining can be profitable when done right. I also think "mining" via proof of brain here on Steemit is a great way to earn extra money. If you just post about your passions you can earn a lot of Steem and even create a full-time job for yourself. I've been able to quit my job and live off of cryptocurrency investing/Steemit income alone!
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Oh yeah, Steemit is the quickest mining there is, I mean in my first week i managed to make about 100 bucks worth of Steem. There is NO other coin that you could to this without having a lot of hardware and cheap electricity. But still, I want to do this on the side to create a bit of a portfolio and mine easy cheap coins when they're still quickly mined. When one of them skyrockets I can always sell. but mostly it is to build a bit of a portfolio and to then HODL the fck out of these XD
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Yeah the mining then hodling strategy sounds like a good plan. I used to mine ETH and recently decided to switch my focus. Let me know how the mining works for you, I'm curious to hear about your progress and how it performs!
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Shure, I'll post my progress here, first with my home rig and when i get to assemble the the dirt cheap rig and make it not fry itself I'll hope to see some better stats.
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Sounds good! I’m excited to see your results!
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Also you were my first upvote, and a big one, on my third comment ever. We could say it's getting pretty serious right now XD
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hahaha XD
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This is such an awesome technique and your portfolio appears to be extremely broad! I have additionally taken after a significant number of the digital forms of money and altcoins that you have recorded! I will tail you alongside your procedure keeping in mind the end goal to harvest the most achievement conceivable, much thanks for posting!
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Thank you so much for your kind words and support! The progress of this portfolio will be continually reported along with in-depth reviews of each cryptocurrency!!! Stay tuned! 🚀
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I think your strategy is very good and very good choice of coin too..
I only invest in coin which are under 1$...you see the that every coin in first 100 is rising ,,,so it is more benefitting...you will get more benefit when it is under 1$ ...likewise few day before i bought ethlend at 1 cent and now it is 17 cent ...so i make 17x..
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Thanks! I actually don't think its very beneficial to buy coins based on their $ value/coin... Price movements are all relative. So if you invest $100 in BTC and BTC goes up 100%, you make $200. If you invest $100 in BAT (worth ~$0.6) and it goes up 100% you make $200. Is it more likely that smaller currencies will double, triple, etc... maybe, but not necessarily. I believe that you should just disregard price and buy cryptos that you can stand behind and call a good "startup". If the crypto is fundamentally good, then it will outperform even those cheaper cryptos that are fundamentally unsound imo.
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What do you think of my investing strategy for crypto? Do you think it's a good idea or a bad idea to approach crypto investing with a similar mindset to startup investing? How do you approach crypto investing?
It's a good strategy but in crypto it's really hard to have a proper strategy that works 100% of the time. Like in December. BTC rocketed to 20k and then dropped back to 13k.
The drop everyone predicted but the mooning nobody expected it to reach 20k.
My strategy is have a game plan before buying something and stick to it. Don't worry about the news, don't worry about opinions. For example if I wanted to get in Litecoin, I'll decide that I'm gonna hodl for 3 months and then no matter what happens during the period, I'll hold.
This seems to work for me particularly in having peace XD
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I agree! Having a set plan and then sticking to it is the key to success in crypto. FOMO and FUD are very strong and the media loves to spin things. I can't say that my portfolio is bulletproof, but I would say that it's much less risky to invest in a very wide set of cryptos than to just buy a few of them. Even the mighty Bitcoin could take a downturn. You never know with a market and technology as new as this. I feel that if even 1 of these cryptos is successful, it's success will far outweigh the failures of all the others!
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I feel that if even 1 of these cryptos is successful, it's success will far outweigh the failures of all the others!
Yep you're totally right on this!
I have lost count on how many mistakes in timing I have made, but I've made so much more compared to what I've lost. Thank God for crypto and the blockchain! :D
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Well, I feel buying equal shares of a lot of coins would result in a cancellation effect. The successful ones will cancel out the unsuccessful ones...resulting in a zero net gain. I would suggest the strategy of holding just one or few coins (of course viable ones) that are sure to increase in value over time eg BTC, ETH, RIPPLE, IOTA...That way, even when there's a downward spiral in their price, you are sure to get a gain in the nearest future...This way you can monitor your investment growth better than having it spread across a very wide spread number of coins that you might not realise when and if you are making profit at all
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Crypto is much like the dotcom boom. Cryptos are essentially startups and many of them (actually most of them) will sadly fail. The thing about startups is that you can invest when they are cheap and if their product goes to market and it does well, the company will SOAR in value, and I mean soar like a unicorn. Even BTC, ETH, RIPPLE, and IOTA aren't guaranteed to succeed. Nothing is guaranteed to succeed. The goal of this portfolio is to have wide exposure in as balanced a way as possible. By doing so, the success of even 1 holding will result in so many gains that it will wipe out the losses of the portfolio and still make a significant profit. As for monitoring investment growth, it's really not hard to do with websites/tools like this one: https://www.cryptocompare.com/portfolio/
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Loved the approach you took to write this article.
Indeed, it's best to buy coins when thier prices are low.
But don't you tempted to invest in short term gains like XRP?
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Thanks @backpackingmonk, I appreciate the kind words and support! Eh, I have a lot of issues when it comes to the fundamentals of the business behind Ripple (XRP)... I'm keeping my eye on it for a short-term position in the event that it gets listed on Coinbase, but other than that, I wouldn't feel right adding it to this portfolio at the moment.
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This is a very good strategy. In my opinion it's necessary to invest in at least ten cryptocurrencies (as startup). If few of them will not grow, the others will grow.
Not selling more than 20% it's a smart decision. On long term the coins will multiply considerably.
I like your list. I would add FLIXX and DENT.
I wish you a prosperous and blessed year!
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Thanks! I do believe in the diversified approach and think that more crypto investors need to ensure that they tread carefully. Nothing is guaranteed in a market like this. Understanding the fundamental technology and investing based on this understanding and with diversification in mind is the key to success in crypto!I will definitely check out both FLIXX and DENT, I haven't researched those yet! Thanks for sharing those with me.
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I think a balanced portfolio makes sense:
Make sure that you have exposure to all three types of coins and you will probably do fine in 2018.
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I agree! Most people do not think this way and just chase after trends. You're doing a great job investing and this is very sound advice for crypto investors, thanks for sharing your insight!
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Mining can be a great way for anyone to get into crypto. It's actually how I got started about a year ago! Keep me updated on your progress, I'm curious to see how it works out for you!
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I use the same 'equal weighting' strategy for my 30 different coins (except XRP and steem that have larger weighting) and it works. In just 2 months, my portfolio rise 800 % from my initial investment.
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Steem to the moon baby! 🚀
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hanks very good post !!!!
Awesome Work!
Keep it up!!!
@cryptoinvestinfo
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this is what you have told me. you have very logical ideas. Thank you for sharing with us @khaleelkazi
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Thanks for reading @mhmtdr0!
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these determinations are superb more sharing this style It would be amazing thanks for sharing @khaleelkazi
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Thanks for supporting!
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LMAO
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Very informative, I am now investing in bitcoin
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though it is great idea to invest in crypto currencies but I want to research on multiplier effect, In this way we could easily spaculate profit. What you think?
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This post has received gratitude of 2.95 % from @appreciator thanks to: @khaleelkazi.
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This post has received a 1.56 % upvote from @drotto thanks to: @doodlebear.
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Virtual money will grow even more. Good subject.
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20.71% @pushup from @khaleelkazi
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Hi @khaleelkazi. I hope that your crypto will be in the forefront of such a summary in 2018. :) https://steemit.com/cryptocurrency/@cryptorep/which-cryptocurrency-has-the-largest-increase-in-value-in-2017
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Steem's ascension continues.
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Please continue repeating things that have worked for you in the past.
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Great info! Understand the tech to understand the investment!!!
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well information cryptocurrercy keep it up
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Add rimbit. RBT for moon:)
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Pretty solid strategy.
I will also be doing this for long term.
For short term...
What I do is study crypto calendars and buy coins that will have specific updates in the future. This tends to push the price up. I can then sell before any dips.
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Excellent article. I have a very similar approach but sometimes make short-term trades to increase my long-term positions with the gains.
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Hi, I think it is very good to have an investing strategy, but additionally to that, I get advice from a board of trading experts. You can also have a look and maybe integrate their recommendations into your strategy http://bit.ly/2EFb8eX. This what I do, before I buy or sell.
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