Monthly Crypto Portfolio Update (Jan 2020)

It seems as January is almost an interesting month for the cryptocurrency asset class as it definitely made large moves that have made investors and enthusiasts aware of their existence once again. While many things have been said about why the sudden interest again, my bet is that many have begun to take into consideration the upcoming change to bitcoin block rewards in the coming months. It has always served as a catalyst for increased demand and better prices. However, it is yet to be seen whether it would be sustainable as last year's Litecoin change had high expectations and action but was surely a "sell the news" event as it has yet to get close to those highs.

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As expected, bitcoin has led the way of the market rise as its dominance only went from 68% to 67% during the month. However, total market capitalization increased to $255 billion once again. In a world that now has a couple of publicly traded companies like Apple and Amazon worth over $1 trillion, the space to continue the increase in value is a reality with more potential. Easy money in the financial markets due to stimulus and accommodating monetary policy by Central Bank and Governments seems to be signaling continued inflationary asset prices which should benefit the asset class as well.

Despite the uncertainty that continues to build on many aspects of the economy and geopolitical environment around the world, capital remains abundant. Unfortunately, we have always learned in the past that it all works until it does not. We also learned in the cryptocurrency market in 2018 that adjustments downward are much swifter and broader than the way up. My key indicator to continue watching will be liquidity as it is a measure that can dry up quickly and although Central Banks are already supporting it, there can always be a tipping point where the response is no quick enough.

I continue to be in a neutral position despite the moves in the market. It is not necessarily because I want to as some of the asset prices during the month were very attractive. Unfortunately, my liquidity has dried up given some of the decisions I have made for other financial issues like my potential relocation efforts. However, the responses to the markets in these assets have continued to encourage me about the long term potential of the value of the asset class and technology in general. Therefore, I remain committed to adding more of my assets over time to the class given its other benefits.

DAI was the only asset I added to in the month as part of my monthly purchase program in place. I also checked how the Oasis deposit has been going and was happy to see the funds deposited growing consistently with a 7.75% savings rate. I plan to update separately on a post but I believe that the DeFi potential continues to be a great opportunity in the short term as it could be the fastest growing application of Blockchain technology this year. With increased adoption and continued development, value can continued to added across the asset class as it draws the attention of a broader class of investors.

The worthwhile venture of the DeFi space continues to lead me on an effort of learning more of its applications and how to increasingly participate. In the effort to grow my exposure to the expanding landscape, I am looking to adding more assets to the portfolio in the coming quarter. It may lead to it achieving 20% or more of my invested assets which is impressive considering the other areas where I am allocating capital like precious metals. There may even be overlaps as a number of projects have looked to tokenize assets on Blockchain.

I am hoping that the months of patience and research for my personal journey into the asset class starts to become once again active as capital and liquidity starts to flow for me personally. It will be more of a challenge to decide on where to allocate versus whether to do so in the coming weeks and months. It will surely be an interesting time; particularly if the market continues to move as it has in January. While risks surely remain ahead, the trend continues to be positive for the long term value of the asset class.

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