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Solving financial (which includes digital assets) illiteracy – the turtle always wins the race

2018-09-10T13:45:40-07:00

Solving financial (which includes digital assets) illiteracy – the turtle always wins the race.

By Don Friedman

I was at a party this weekend speaking with a financial advisor who told me that I’m an outlier when it comes to investing. He rattled off that I have IRAs, 529s for my kids and I understand that, in most cases, ETFs are better investment vehicles when compared to mutual funds. One of things he said that I practice that most people will never have the discipline to do is be patient and buy low.

Ironically, within an hour of having this discussion I received an email notification that I had been filled on my 6 month old resting order to buy Ethereum. I don’t know if Ether will go up or down from here, however, I’m a chartist and $200 was a price I was comfortable starting to scale in at. What I do know is that if you believe cryptocurrency has a long-term future NOW is the time to start nibbling. It’s human psychology to buy when things are racing up as FOMO kicks in. And it’s also human psychology that it’s scary to buy when things are selling off and you can see the white in people’s eyes.

Oftentimes, it’s the contrarian investors who are the most successful. Is that always the case? No. For me, investing like so many other things in life, is about playing the probabilities. And in the case of cryptos, if you’re willing to lose all the money you invest (remember – presently cryptos are a very speculative investment) then now is a great time to start investing.

To me, knowing which cryptos to buy is a far more complicated decision process. There are other things I’d like to learn about blockchain and crypto as well which is why, for me, now is the most exciting time to learn about it. The shininess has worn off. Many of the newbie speculators have been flushed out. And with the euphoria gone now we can have serious, thoughtful dialogue about the space and the opportunities. As an investor myself, I’m really looking forward to our Digital Asset Strategies Summit where I, along with all the attendees, will have an opportunity to hear from and ask questions to an illustrious speaking faculty of Wall Street veterans.

Happy investing.

Solving financial (which includes digital assets) illiteracy – the turtle always wins the race2018-09-10T13:45:40-07:00

Can you see the white in people’s eyes?

2018-08-14T18:05:19-07:00

Can you see the white in people’s eyes?

By Don Friedman

It’s time for people to really start paying attention now. The music has quieted down as cryptocurrencies have recently been in a free-fall. The euphoria has worn off as most of the major cryptos are either below or approaching their 1 year lows. Many people who joined the party in 2017 are getting flushed out. If you believe in the long-term future of cryptocurrencies, now is an interesting time to scale in.

As I mentioned in a previous blog, using XRP as an example, I started dipping my toes in at around 33 cents and as the free fall continues will dip in again pretty soon. As I was pointing out to a colleague the other day, investing is about patience and whether it’s equities, real estate or crypto it’s about waiting to see the white in people’s eyes when the best opportunities present themselves. Colleagues thought I was crazy as I’ve had a resting order in for Ether since the end of March. I’m getting very close to getting filled now.

It’s not easy to stick your neck out and go against the crowd but this is what separates great investors from the rest. I don’t know how low cryptos will go and I don’t know if they will survive so I’m willing to lose all of what I’ve invested.

This is why we’ve assembled a speaking faculty of veteran Wall Street experts (for our Digital Asset Strategies Summit) to help investors better understand and analyze both the cryptocurrency and blockchain spaces. When markets go parabolic everyone thinks they’re a genius. It’s at times like these when people get brought back to earth and the soul-searching begins.

Happy investing.

Can you see the white in people’s eyes?2018-08-14T18:05:19-07:00

Is Black Friday coming to a cryptocurrency near you?

2018-08-10T10:20:50-07:00

Is Black Friday Coming to a Cryptocurrency Near You?

By Don Friedman

As Bitcoin was racing towards $20,000 and people bought for “fear of missing out” (FOMO), those same people are starting to sell because of FOLE – fear of losing everything. Is this creating a buying opportunity?

Bitcoin began its meteoric rise in 2017. So, if we use its 2017 support level of roughly $900 and watched it reach its peak of approximately $20,000 that resulted in a 2,122% increase. Compare that to Ripple’s XRP which if we use its 2017 support level of roughly 20 cents and saw its peak reach $2.70 (according to World Coin Index) that resulted in a 1,250% increase.

I understand there are flaws in this analysis as people could argue that XRP sat at less than 1 cent through Q1 of 2017. So, if we used a cost basis of 1 cent the increase would have been to the tune of 26,900% which is far bigger than the percentage increase of Bitcoin. In parallel, you could argue that Bitcoin’s true support level is around $250 in which case the rise to $20,000 was a 7,900% increase. Still a far cry from XRP’s 26,900% but much higher than the 2,122% we used in our Bitcoin example.

However, what is indisputable, is that Bitcoin has fallen from its peak (roughly $20,000) to its trough (roughly $5,800) which results in a 71% loss. Whereas Ripple’s XRP has fallen from its peak ($2.70) to its trough (roughly 33 cents) which results in a roughly 88% loss.

So, I ask again, is now the time to pick up some cryptocurrency? There are a million and one opinions on the positive and negative attributes of all the cryptocurrencies (why one will succeed while another won’t) so I’m not going to go down that rat hole. For me, I’m focusing on XRP. If you believe that Ripple will be around for years to come and you put some weight in the theory that if Bitcoin reaches some of the analysts’ predictions of as high as $250,000 (Tim Draper) that all tides will rise (in varying degrees). And yes, this inspires dialogue around the virtues of buying a basket of cryptos of which we’re not going to discuss here.

As of this writing, Bitcoin sits at approximately $6,500. If it hit $250,000 that would be an increase of 3,746%. If XRP rose by the same amount that would be a price of roughly $12.70. If Bitcoin simply regained its glory of reaching $20,000 that would be a 207% increase. For XRP to reach a 206% increase would mean it traded at $1.01.

The cost and total loss (should the price go to 0) of buying 10,000 coins of XRP at current prices should be less than the monthly credit card statement of anyone who should have any business buying cryptos. To me, it’s worth dipping my toes in the water for.

Happy investing.

Is Black Friday coming to a cryptocurrency near you?2018-08-10T10:20:50-07:00

Trials and Tribulations of Buying Cryptocurrency

2018-08-10T10:21:18-07:00

The Trials and Tribulations Of Buying Cryptocurrency

By Don Friedman

For any event I produce I feel it’s important to own one of the products or strategies related to the conference subject matter. Talk is cheap. I feel you need to have skin in the game otherwise you’re not a legitimate participant.

With that being said, as we prepare for our Digital Asset Strategies Summit, I bought XRP on June 28, 2018 on the Kraken exchange. What a confusing process it was. The GUI/front end is drastically different from any of the Wall Street GUIs I’ve used such as E*TRADE, Fidelity, Schwab or TD Ameritrade.

I’ll spare you the details but now that I own it, when I go to the “Positions” screen it says “no open positions currently available”! That got me a little freaked out because in my Wall Street accounts you can track your portfolio by looking AT YOUR POSITIONS.

I might add there is no phone number to call and when I sent an email I received the following response:

“Thanks for contacting Kraken Support. Your request (xxxxxx) has been received.

We’ll reply to your ticket as soon as possible, but in some cases it can take several days if we experience a heavy volume of requests.
We have site content that answers many of the most common support questions. Please take a moment to visit the pages below and see if your question is answered there.

If you’re able to solve your request before we reply, we’d be grateful if you let us know by replying to this email.
Thanks for your patience. You’ll be hearing from us soon.

The Kraken Support Team”

Several days????? Hmmm…

I did spend some time using their Chat feature and the person was somewhat helpful. Bottom line is if the goal is to have institutions adopt cryptocurrencies there needs to be drastic improvement in simplifying the order entry process and making the front end far easier to read and understand.

I’m also aware that other firms tout they have a far more user-friendly front end which very well might be so. The industry as a whole (similar to Wall Street) would benefit if all exchanges learned from how Wallstreet has built their GUIs to make it easier on the investor.

I’m excited that we’re planning to execute a crypto trade at the Digital Asset Strategies Summit. I’m confident this will not only be helpful to me but to the rest of our allocator audience as well.
Happy trading!

Trials and Tribulations of Buying Cryptocurrency2018-08-10T10:21:18-07:00

Blockchain Takeaways From Interviewing Bart Stephens

2018-08-09T11:39:11-07:00

Don Friedman’s Takeaways

A Recap from interviewing Blockchain Capital’s Co-Founder & Managing Partner: Bart Stephens

It was a pleasure having the opportunity to interview one of our Digital Asset Strategies keynote speakers Bart Stephens from Blockchain Capital. Bart’s firm is the most established VC firm in the blockchain sector and the first VC firm to raise a venture fund through an ICO. He’s a true testament to quality and credibility of our speaking faculty. Our “allocator only” attendees will surely benefit from hearing his thoughts when he shares the stage with Fundstrat’s Thomas Lee on the session: State of the Digital Asset Market: A Legitimate Asset Class or Another Tulip Mania?

Key takeaways from my interview include:

  • Blockchain Capital’s most important criteria when investing in firms is making sure they have a world class team of entrepreneurs who have the right engineering and technology background to build a multi-billion dollar company.
  • The demographics of people who own crypto assets and the demographics of people who play video games are almost identical so there’s a very good crossover leading to an explosion of new entrepreneurial activity around the Intersection of blockchain technology and the video game industry.
  • The basic building blocks are now in place for institutional asset managers to both trade and custody crypto assets.

Read the entire Interview With Bart Stephens HERE.

Blockchain Takeaways From Interviewing Bart Stephens2018-08-09T11:39:11-07:00

The Right (and Wrong) Way to Invest in Blockchains

2018-08-09T11:58:42-07:00

The Right (And Wrong) Way To Invest In Blockchains

Bitcoin investors have ridden a volatility roller coaster for the past two years. Here’s a much better long-term strategy for investing in blockchains and cryptocurrencies.

Bitcoin investors have ridden a volatility roller coaster for the past two years. We’ve almost become numb to get-rich-quick blockchain schemes, as scores have surfaced during the past two years. It seems like everyone and their dog has devised an idea on how to make money off of blockchains. If “euphoria” described the public’s attitude toward blockchains in 2017, then “trepidation” seems to be the word for 2018. This volatility roller coaster has investors hesitant, but still eagerly waiting to see what happens next. So is there any hope for bitcoin’s future?

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The Right (and Wrong) Way to Invest in Blockchains2018-08-09T11:58:42-07:00

Taking the Mystery Out of Blockchain Investing

2018-08-09T11:58:16-07:00

Taking The Mystery Out Of | Blockchain Investing

A blockchain-focused portfolio is a global, diversified growth play.

Why would one want a separate portfolio allocation to blockchain technology? It’s a question nagging many professional investors as they see headline after headline on the topic. The thesis is somewhat similar to sector investing: It can help advisors express thematic market views and/or capture potential alpha opportunities. Traditional sector opportunities may be growth-oriented, like technology funds, or income- and volatility-focused like utility funds, or potential inflation hedges like real estate and other real asset funds. In all, sector plays are a significant part of the investment universe, to the tune of over $750 billion in sector mutual funds and ETFs.

In the same way, an actively managed blockchain sleeve can add specific exposures to an equity portfolio, in particular

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Taking the Mystery Out of Blockchain Investing2018-08-09T11:58:16-07:00

Investing in Blockchain Companies – The Top Five Myths

2018-08-09T11:58:30-07:00

Investing in | Blockchain Companies

The Top Five Myths Investors Should Look Out For

Blockchain, also known as distributed ledgers, virtually allows anyone with access to online devices to handle transactions or digital interactions that are designed to be secure, transparent, fast and efficient. In 2009, the Bitcoin cryptocurrency introduced a peer-to-peer (P2P) electronic cash system. Enabled by underlying powerful blockchain technology, Bitcoin was designed as a decentralised and digital currency that is not owned or controlled by any central banks. Despite being a technology buzzword for nine years now, has blockchain progressed enough to be among the potentially disruptive technologies, like AI or DeepTech, in today’s global economy?

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Investing in Blockchain Companies – The Top Five Myths2018-08-09T11:58:30-07:00