Active strategy management, 6 years of crypto experience, using stablecoins to reduce drawdowns, always diversified, no gambling
This strategy invests into crypto assets that potentially outperform Bitcoin. The strategy will stay diversified and won't invest more than 15% into one single asset except for Bitcoin, cash-like Tether, USDC or Pax Gold. Usually it's even more diversified. The strategy moves to cash-like coins after strong market runs or if indicators point to more difficult times. Thus drawdowns should be reduced.
The idea in my last post around buying Litecoin, Dash and Stellar went well, just Stellar didn't want to perform like the other two. As I just held small parts of the strategy in them as always, the overall effect wasn't very big. I sold the positions and now wait for a correction. Yesterday I tried to bet on people revisiting the NFT space due to the upcoming big land sale on SANDbox and the football NFTs on Chilliz, but it hasn't yielded any returns. I am currently out of markets as the days after Thanksgiving have been weak crypto days in the past years.
This week was full of fear and bad news. Most people on twitter were posting about who else will be insolvent and that Bitcoin will go to 13k or 10k or even lower. Prices however were more or less consolidating on a low level. I do not know whether we might indeed go lower, but have the following thoughts:1. Leverage and fraught in relation to DeFi killed some players2. Price correction of many coins have reached levels not seen since many years3. Some coins like Litecoin or Dash have little exposure to DeFi4. I think some mining companies might go bankrupt because mining is not profitable and some have too much debt. This should have limited effect on pricesMy conclusion was that buying old coins like Stellar, Dash, Digibyte or Litecoin here at these levels is like buying them in 2020 at levels before any Bull run. I will monitor developments closely as always.
Staying in cash for now. Stockmarket looks like it needs a downwards correction after the strong rally and this could mean more pressure for crypto and maybe a quick selloff, which I think should then be the bottom. Positives I see: positioning of institutionals is already very bearish if you look at record high implied option volatility and the backwardation of the futures curve
FTX has just filed for chapter 11 and the market reactied negatively to it again. Chapter11 doens't mean that users will lose money, yet. At least US citizens seem to be fine because FTX US was somehow ring fenced and user assets should still be there. But there is another FTX entitiy on the Bahamas which onboarded international users and it seems like CEO Sam secretly gave away some user assets to Alameda and they gambled and lost them. Maybe the market can recover from here after the bad news is out?
Staying in cash for now. News is out that Binance will not buy FTX. This means the trading arm Alameda which is where they did things that I think were criminal gets liquidated, but assets left are not big any more. Tokens like Solana and Avax will probably fall a lot more from here, FTT is worth 0. These tokens and some others were all in some way supported and manipulated by this firm. I think we will learn in the coming weeks how much dirty stuff SBF and the scammers at Alameda have done.
That escalated quickly :-( Binance has won and proposes to take over FTX and save them from insolvency if they do not find any much bigger holes in their balance sheet. Regulators will have an imporant saying too as user funds need to be protected, but I think they will eventually allow it. For the market this is a good outcome but we will see more volatility in the coming days before the dust settles. Buying opportunities are ahead to use our cash in the next days or weeks
The fight between Binance and FTX is intensifying. Binance threatens to sell (or is selling) FTT tokens (the exchange token of FTX exchange) and on the other side FTX exchange moved big lots of BNB tokens onto Binance exchange. The risk here is that the opaque network around FTX and Alameda Research gets into deep trouble and has to deleverage more. I do not think customer funds at FTX are at risk, just the financiers behind the network will likely lose money..... I hold cash and gold until things resolve one or the other way.
It seems there is a serious fight going on between the CEOs of Binance and FTX. CZ from Binance is publicly threatening to sell the 30mln FTX tokens they own. This would be impossible to do without destroying the price of the FTT token. It is not yet clear what has happened that made CZ so upset. The only hint he gives is that FTX lobbied against Binance behind his back.
US Megacap stocks are trading like shitcoins. Meta, Google, Amazon lost bilions in value overnight and some still look very expensive. Incredible moves there. This can't be good for sentiment worldwide as nearly the whole world has invested in the US in the past years thinking the companies are doing something better than others and valuations skyrocketed. This is now really painful for many investors and certainly not helpful for crypto. I expect to see cheaper price levels next week and moved fully into cash.