Love, patience and a little crypto
Cryptocurrency: all you need is… dog?
The Beatles sang “All you need is LOVE”. Guns & Roses said “You just need a little patience”.
For those who have maintained their love of crypto, and all it stands for (libertarianism, peaceful anarchy, anonymity, cyberpunk, freedom), you may now receive your just rewards.
For those who have practised patience with their crypto portfolio, you also have received your reward. Springtime
We are officially through the winter season of cryptocurrency, and the first buds of spring are shooting forth with renewed gusto. If you have been in crypto for a few years, you will know that there is a winter every year; however, it can be unpredictable. The crypto winter does not always arrive in the same month, nor does it end in the same month.
The best crypto analysts cannot pinpoint the winter arrival until it arrives, and none can tell when it will end, until after it has ended. All we must do is be faithful, continuing to practice love and patience.
During the crypto-frost of early 2019, crypto prices went south for the winter, and stayed down a long time. The Bostoncoin puppies mostly sat and stayed, remembering the “HODL” philosophy. Occasionally we re-examined whitepapers to remind ourselves why we got into some of these projects in the first place.
Some people got into crypto purely to make money. These speculators probably dived in when prices were heating up, and then retreated with their tails between their legs when the prices went down. It’s possible to make 300% or more in crypto during good times; it’s also possible to lose 75% or even 100% during bad times… especially if you don’t invest into quality and merely chase trends.
It was all well and good to invest into some ambitious projects in the sunny days of summer, but did we keep faith in them when they lay down in the shade?
As we used the “C.O.I.N.” process for fundamental analysis, we were still safe from scams and irrational exuberance. Although crypto prices went down for months, no projects disappeared, and the essential principles were still present. We still believe in the projects and their aims, and when fundamentals are present, eventually, sensibility will return to the market. This month, we even found some new projects which had promising fundamentals, and bonus: we even managed to buy in before the big rush.
The question is, how do you best seek long-term quality, not short-term trends?
Crypto is supposed to solve problems
Paradoxically, if you get into crypto just to make money, you will often lose money. If you actually want to make money, you must remember that crypto projects are not just for making money.
The original idea for bitcoin was not to buy overpriced pizza or make Satoshi a billionaire. The idea of bitcoin was to solve an existing problem of centralisation. The central banks were gambling with the peoples’ money, and when the central banks lost trillions during the GFC, ordinary people lost fortunes and then had to bail out the criminal banksters.
Bitcoin was an anarchical and libertarian idea: create a monetary system which is truly for the people; a monetary system which the governments and central banks cannot control, deflate, waste or devalue.
For a decade now, bitcoin has fluctuated wildly in price, but has still maintained its original value as a libertarian unit of wealth. If you trust in the value, you will not be caught up in the price.
Some of our favourite projects still add value, no matter what the market thinks of the price. These include
BinanceCoin, which makes investing and trading more cost-effective
PowerLedger, bringing affordable sustainable power to everyone
BAT, paying people for viewing ads that would otherwise be annoying
FireLotto, bringing tax-free gambling to all nations
and the new-comer, which we picked up almost a month before any of the major players, ChainLink (LINK). ChainLink is solving a huge problem with the major cryptocurrencies: interoperability.
ChainLink is officially “blockchain agnostic”.
Serious crypto enthusiasts know that there are operating systems behind the prices and fluctuating lines on a screen. Bitcoin runs on its own blockchain, which is only used for bitcoin (BTC) and its derivative, satoshis (or ‘sats’). Ethereum runs on its own blockchain, which is only used for Ethereum (ETH), smart contracts and Ethereum gas. DAG runs on a Decentralised Acyclic Graph, and so it goes on. It’s as if there are 20+ car manufacturers and they all have their own roads, on which nobody else can drive.
If you have more than 3-4 crypto holdings, it’s likely you will have several wallets, as you cannot store your BTC in an ETH wallet, and you cannot transfer DAG on a BTC network. ChainLink worked on the problem, and came up with a way for the separate blockchains to speak to one another.
We purchased LINK as we thought it would be a good long-term play, and an essential tool for crypto longevity. We did not expect it to go up 200% in a month, but it has. Shortly after we bought LINK, it was discovered by Google, who signed a contract with the team behind the revolutionary technology. When the Google news was announced, the price rose immediately by around 200%, and as of today, it is still rising. BostonCoin may be controversial, but it’s clever
It is becoming increasingly apparent that the crypto space started off crowded with thousands of projects, and there will only be a handful of winners over the next five to ten years. This may be likened to the “motor vehicle wars” of the early 20th century. History may not repeat, but it definitely echoes.
In the early 1900’s, there were over 2000 vehicle manufacturers, over 1500 in the USA alone. A few decades later, there were only 39 brands, with 30 of them controlled by just nine major players.
Ford bought Volvo and Jaguar, General Motors Holden picked up Fiat, Subaru, Ferrari, Lancier, Maserati and Saab. Volkswagon bought Audi, Bentley and Lamborghini. Hundreds of other brands were either eaten by larger competitors or driven (sorry) out of business.
Some lucky investors made large profits when their favourite company cannibalised the smaller manufacturers. Some unlucky investors lost fortunes when their favourite companies went downhill. The astute investors made bank by investing into something which every car needed: roads and oil.
Regardless of whether the future will be solely a BTC economy (unlikely), a mix of BTC and ETH and another major player (likely), or an economy ruled by 5-6 major cryptos (also likely), there is one thing which is practically guaranteed.
Whichever coins or blockchains rule the world in 2020 and beyond, they will all require infrastructure. BostonCoin owns the cars and the roads
In our initial whitepaper, BostonCoin advised we would be investing into cryptocurrencies and select tech stocks. We took a long-term view right from the start, and knew that infrastructure would be very important going forward. It was all well and good to be an early investor into Google, Amazon or Apple, but these companies would not have done nearly as well if the internet was still running on the 9600kps dial-up speeds of the mid-1990’s.
This month we invested into the highly-controversial 5G technology and the new “SuperLoop” (ASX: SLC). This is a massive new section of the information superhighway: fibre-optic cable which is over 10 000 kilometres long, connecting Sydney to Perth and Perth to Singapore.
Imagine a highway with 50 lanes, and only twenty of them are for public shared use. There are a few lanes which can be rented only to large corporations who need to have super speed (such as high-frequency traders of stocks or currencies), and a few lanes which can be rented to companies for high-speed interactive multi-player gaming. There are some lanes which can be used for medical purposes (such as remote-controlled surgeries), some which are used for self-driving cars (where a millisecond delay could be fatal) and some which are not used at all, until needed for future inventions.
This is the SuperLoop, and this is part of the infrastructure on which your Netflix, email, YouTube, bitcoins, cryptos and other internet traffic runs on. As we invested into it, we own part of the road, and we are entitled to part of the fees generated when traffic passes over the network. Regardless of whether Bitcoin trounces Ethereum, or whether a new player enters from left-field (Libra?), no matter who wins, they will all have to pay to run on the highway. Infrastructure may not be trendy or sexy, but in the long-run, it is a safe and reliable investment. What else is happening?Aside from a few new investments as detailed above, the puppy partners mostly sat and stayed on their existing investments, and kept a pile of cash aside for new opportunities. Some of our winners this month were:
Bitcoin up 20%
NAV June 28 2019 --> 32.6287596 BostonCoin price --> 35.8916355 Directors buy-in
As crypto emerges from its long hibernation and things start to get more exciting again, the BostonCoin She-E-O has purchased an additional 71 BostonCoin to add to her holdings. The CFO has purchased an additional 35. New investment options
In addition to straight purchases of BostonCoin, we have also introduced “Dollar Cost Averaging” (DCA) for all investors. This is an option for those who would like to invest on a regular basis, and take advantage of the regular dips and fluctuations in crypto. The DCA process enables you to contribute the same regular amount each month, and you automatically buy less when cryptos are high, and you will purchase more when cryptos are down.
DCA is a strategy which has outperformed market timing from 70% to 97% of the time for the last 100 years. For a tutorial on DCA, you can visit this site; it’s based on US-market data but the same principles apply for any fluctuating market. What’s next?
We can go back and examine 200 years of the stockmarket, or 400 years of the property market, and see that things run in cycles. History may not repeat, but it definitely echoes, and good analysts can predict stocks or property with more than 50% accuracy by looking at “what happened last time the economy was X, inflation was Y and employment was Z?”
In cryptocurrency markets, we have less than a decade of data, and so far, we have only been able to see a few annual cycles (such as Chinese New Year). The crypto data is not large enough for analysts to draw stochastic charts and parallel other periods in history, so what will happen next is anyone’s guess.
This puppy is assuming that future internet demand will rise (driven not only by human users and business, but by a multitude of smart devices such as self-driving cars, “smart” home appliances such as refrigerators, TV’s and washing machines) and many more applications. What about the Facebook coin?
We anticipate that the Facebook global-coin “Libra” may bring a singular currency to millions of people without bank accounts in developing nations, and put downward pressure on the US dollar. Despite being not decentralised, not asset-backed, and ostensibly not even a true cryptocurrency, the new Facebook coin will likely be revolutionary in its worldwide market penetration, low-fee frictionless transfers and ‘real-world’ partnerships with existing tech providers such as PayPal and Uber.
As Libra will be linked to other fiat currencies, and therefore has no scarcity, we do not expect Libra to increase in value over time. However, we do expect that Libra will bring the concept of digital cash and cryptocurrency to millions of new users who had previously only used paper currency, so this will mean more people buying into other cryptos, and increased prices for other coins and tokens.
Remember in 2007 when only university students and hipsters had Facebook? A decade later, even your grandparents were sharing embarrassing Facebook photos and trying to poke you. Adoption of cryptocurrency may follow a similar path in future, as more and more people share the experience and spread the word. Any bonuses this month?
The gift cupboard is getting low on Boston tote bags and puppy cups, but we do still have a handful of BostonCoin unisex watches as gifts for new investors, or for those who become BostonCoin brand ambassadors. Get yourself a gorgeous BostonCoin watch with a black leather band worth $30: it’s as simple as sharing a few posts and using the #BostonCoin hashtag, or introducing an investor to the #coinofcoins, BostonCoin.
For now, you can rest easy, knowing that the dog is on duty, and guarding over your portfolio, as well as watching the horizon for emerging threats or opportunities.
Drop us a line in the Facebook group, email or on Twitter See you next month JB