Monthly Crypto Portfolio Update (Sept 2019)

What seemed to be a normal and stable month went backwards pretty quickly at the end as markets took a leg lower this month. This time, however, the drop was led by bitcoin itself as it failed to hold the $10k price after multiple attempts failed. It should not have been too surprising as not only had the price skyrocketed so far this year and a hefty pullback was expected; but also, the testing of the $10k level more than twice was a sign that demand could not keep up with the supply. I imagine that most of the supply was from miners whom have really needed this rally higher this year given that being below $5k was probably hurting them for funding. Most of demand is probably from institutions at this time which is why the markets have been somewhat more sensitive to news and liquidity these days.

The price action in the markets continue to provide signals of some important factors for investors in the asset class in my opinion. Market Capitalization fell from $252 billion to $221 billion last month which is still more than double the lows. I think these are fairly good valuations considering that assets continue to be added almost on a daily basis. However, the amount of projects disappearing are still not as high as we need to see in order to be fully capitulated at this time. This made bitcoin maintain a strong dominance at 69% from 67% despite the steep declines in price at month end. Also, interest continues as daily volumes (as much as we can believe them) continue to be over $40 billion daily! That means than almost 20% of the market capitalization trades every day!

The tick lower in dominance also has gotten me thinking about the potential resurgence of some altcoins as they have been underperforming for the last quarter. If we want to see the market higher, we need to expect more than just bitcoin to attract demand and investors in the short term. However, development seems to be lacking as it continues to be difficult to foster growth without the proper adoption and onboarding of users, particularly from the Dapps and their blockchain platforms. I am expecting to see more news in the coming weeks as projects continue to distinguish themselves between winners and losers.

I continued my approach to continually add some assets into the portfolio which were offset by the price declines. My dollar cost averaging into both Steem (not displayed) and DAI continue to be consistent although my Steem allocations are being lower giving my approach towards this year’s goal of 25k Steem Power and it being increasingly difficult to convert from fiat. However, I am enjoying the fact that DAI continues to be a great project that store the value of my investments into crypto for the time being. I see it as being the future bridge towards holding more crypto assets although needing to use other trading pairs will make it a challenge.

While I am still waiting for a great moment to further diversify the portfolio, I am already starting to add to existing positions to improve my average cost as most continue to be much higher than actual prices. In what somewhat seems like a Dollar Cost Average, I also added some ETH when the dip came at the end of the month despite it not being in my plan for the month. However, I believe that once development moves forward in the Network with Sharding and POS, the opportunity to getting a good price will be more difficult. I still feel that the market is now in a better place than 2018 so am looking at adding to more positions as I get into the end of the year.

I continue to look forward to seeing the market forces separating the winners from losers as it will still give us an opportunity to add exposure at attractive prices as most altcoins are still 80-95% from their highs. While past performance cannot predict that we get there again, it can be an indication of what projects to watch given the potential once seen at one point in time. I had though about even adding to bitcoin but given the price action after the Bakkt launch, I would prefer alternatives before adding to that position. What is sure is that the market will continue to fluctuate and give is plenty to consider and react to!

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