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Cryptocurrency Investing: What is a Healthy Portfolio and Where Does Bitcoin Stand

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Over the past 12 months, year-to-date, bitcoin has fallen behind Ripple, Litecoin, and Ethereum in terms of price growth.

Bitcoin’s Year-to-Date Return

Bitcoin still has recorded a massive price increase of 14-fold, from $1,000 to $14,000. But, other cryptocurrencies in the market such as Ripple have recorded a staggering 163.5-fold increase in value. Merely a $1,000 dollar investment in Ripple in the beginning of 2017 would have led to a profit of $162,500, while an investment in bitcoin would have led to $14,000.

Yearly bitcoin price growth provided by Coinbase

The top three cryptocurrencies in the market bitcoin, Ethereum, and Bitcoin Cash have less potential to increase by large margins in comparison to cryptocurrencies with market valuations of less than $10 billion. Unless the entire cryptocurrency market surges exponentially and the valuation of the market grows to many trillions of dollars by the end of 2018, in the short-term, it is unlikely that leading cryptocurrencies including bitcoin, Ethereum, and Bitcoin Cash will record an astronomical surge in value, by more than 100-fold.

Billionaire hedge fund investor Mike Novogratz, Fundstrat’s Tom Lee, and highly respected financial analyst Max Keiser have established an interim price target of bitcoin at around $50,000, which would place the market valuation of bitcoin at $1 billion. Solely in terms of price growth, a $50,000 target would be a 3.5-fold increase in value over a 12-month period.

Consequently, many investors in the market have started to diversify their investments into other cryptocurrencies, and the trend has been evident in the decline of the dominance index of bitcoin. Three cryptocurrencies at the top of the market are considered as reserve assets or safe haven assets. They have low risk but low returns. That is, a low return relative to other cryptocurrencies in the market. Bitcoin, Bitcoin Cash, and Ethereum have drastically outperformed all of the currencies and assets in the traditional finance sector year-to-date.

Investors like CNBC analyst Brian Kelly and cryptocurrency-focused hedge funds spread out their funds across many cryptocurrencies with strong technologies, active developer communities, solid markets, and applicability.

John McAfee for instance, has emphasized the necessity of private or anonymous cryptocurrencies like Dash, Monero, and Zcash, as in the future, more investors will seek out for cryptocurrencies that are capable of providing a high level of confidentiality.

Combination of Low-Risk and High-Risk Cryptocurrencies

A healthy portfolio of cryptocurrencies would be a certain amount of funds spread across both strong low-risk cryptocurrencies like bitcoin, Ethereum, and Bitcoin Cash, and high-risk cryptocurrencies with lower market caps like Monero, Zcash, and Dash.

Squeeze, a prominent cryptocurrency trader, noted that price is not an accurate representation of the size of a cryptocurrency. Rather, investors should consider the market valuation of a cryptocurrency to decide its potential and space to grow.

“For new investors in crypto, think in market cap. Not price per coin. Market cap gives an estimate of the potential growth. Price per coin doesn’t mean anything as the supply for each altcoin differs $0.1 per coin doesn’t mean it’s cheap $100 per coin doesn’t mean it’s expensive,” said Squeeze.

An example of a high market cap but low price cryptocurrency is Ripple. The market valuation of Ripple is at nearly $40 billion but its cryptocurrency remains at $1. Meanwhile, Dash, Litecoin, and Monero have tokens valued at more than $300. Yet, their market valuations are substantially lower than that of Ripple.

For investors and bitcoin holders that have seen significant returns over the past few years, diversifying funds across unique and potent cryptocurrencies could lead to better returns in the short-term.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.1 stars on average, based on 5 rated postsJoseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.




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7 Comments

7 Comments

  1. tgsmikema

    December 25, 2017 at 11:21 pm

    established an interim price target of bitcoin at around $50,000, which would place the market valuation of bitcoin at $1 billion.

    you mean $1 Trillion??

    • Joseph Young

      December 25, 2017 at 11:28 pm

      Very careless error. I apologize about that. Yes, that would be $1 trillion. Thank you for pointing that out.

  2. scottolson

    December 26, 2017 at 1:42 am

    Could you please present the best tech-advanced(trustful & experienced team with BG, and low market cap as well) crypto’s portfolio you consider of having a huge potential in near future? Or may be point out some cryptos that will have a huge growth in 2018, but underestimated at the moment(Exept BTC,BCH, DASH etc) Not certain but some throughs of pro.

  3. idm2000

    December 26, 2017 at 2:30 am

    xrp

  4. MinerMatt17

    December 26, 2017 at 5:38 am

    So there is no real detail in this article about what a portfolio should look like. The title seems a little misleading to say the least.

    • HardyEsterhuizen

      December 27, 2017 at 11:57 am

      Well, it does make the broad point that growth rates in BTC and the majors are possibly not going to be as spectacular as some of the lower market cap coins if they gain share. So it kind of does indicate that you should consider diversifying into lower market cap coins that show promise. What percentage should be BTC vs alts is up to your appetite for risk, or your level of research and confidence in whatever alts you feel are worthwhile.

      • MinerMatt17

        December 27, 2017 at 5:41 pm

        So in other words, it doesn’t tell you what a healthy portfolio should look like, even though that Is the title of the article….

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Monero Price Analysis: Wider Adoption Seen as Bity Adds XMR Support to Their ATM Network

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  • Swiss-based cryptocurrency organization, Bity, has added their support for XMR for use at ATM terminals.
  • XMR/USD trading up on Friday, with gains of over 3% at the time of writing. Despite this, weekly chart view still points to the downside.

XMR/USD is trading in positive territory on Friday, having gained over 3% during the session. This leaves some optimism heading into the weekend, which is normally characterized by lower trading volumes. Trading over the past eight sessions now has been very much choppy, signaling a lack of direction in the underlying market. Any short-term bull runs observed have quickly been sold by the bears, consistently.  The price is trading around the lowest levels since August 2017 and is down over 90% from the start of 2018. Despite the minor relief upside Friday, there still appears to be room for downside in the short term. Once again, price action is largely dictated by technical factors as opposed to fundamental.

Wider XMR Adoption Following Bity Support

Bitly, a Swiss-based cryptocurrency organization, has announced their support for Monero (XMR). They are a cryptocurrency exchange, in addition to operating a network of cryptocurrency ATMs. Their users can instantly and securely transact bitcoin in addition to buying ETH and now XMR with Swiss Francs and Euro. This can be done at physical terminals in Switzerland. Bitly has additional kiosks in Zurich, Zug, Winterthur, Basel, and Lausanne. They note that more locations and additional token support are coming soon.

Technical Review – XMR/USD

XMR/USD 4-hour chart

Price action over the past seven sessions now has been forming a range-block, moving within consolidation mode. This has come after some stabilization, following the chunky sell-off from November through to early December. The current price behavior can also be perceived when looking technically, as a potential bearish flag pattern formation. If playing out to the textbook, another extended move to the downside will be seen.

Downside Targets

XMR/USD weekly chart

The near-term bottom can be eyed at $41.00, which is the floor of the most recent range. A failure of this holding will likely see another wave of selling pressure. Looking further to the downside, the next eyed support is seen at $38.45, which was a key weekly level in July 2017. Lastly, any breach here would invite a drop below the $30.00 mark toward the weekly support at $29.00. This would be the lowest level hit since July 2017, when XMR/USD was in the early stages of the big bull run.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 86 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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IOTA Price Analysis: Audi and IOTA Partnership Moving Strong; Price Behaviour Not Reflecting That

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  • IOTA and Audi partnership is said to be progressing forward, according to Audi representative.
  • Price action for IOTA remains tilted to the downside, and a bearish technical set up eyed.

IOTA (MIOTA) price remains very much depressed, in line with current stubborn market conditions. It continues to trade around the lowest levels seen since July 2017, with a lack of slowdown signs for now. Since the start of the year, the price is down a chunky 95%. The bears have the opportunity to run this further south, as there isn’t much in the way of support seen. This is all despite the strong growth fundamental prospects for IOTA.

Audi and IOTA Partnership Moving Strong

Earlier this year, IOTA announced a partnership with Audi Think Tank as the foundation was moving with the development of a permission-less mobility ecosystem. IOTA believes this structure of working is a strong route to understand how automakers are approaching innovation and development. The foundation previously noted that they see it as a great opportunity to incorporate into a new mobility solution, backed by strong suite of skills that Audi associates possess.

An update hit the wires this week, suggesting the Audi and IOTA partnership is progressing forward. The venture development manager at Audi Denkwerkstatt Berlin, Malte Schönfeld, provided some commentary via his LinkedIn account:

“What an awesome experience! The last five months we had a great time at the Audi Denkwerkstatt Berlin. Working in cross functional teams with IOTA on a new project. With the focus on enabling trust for the user in emobility, we pushed a new use case to reality. Stay tuned for further Information.” Matt Schönfeld also sent many thanks to all that are involved with the project, including IOTA founder Dominik Schiener and Alisa Maas, Head of Mobility and Automotive at the IOTA Foundation among others for “putting so much energy & passion into this project.”

Technical Review – IOT/USD

IOTA/USD 4-hour chart

Keeping in mind the decline discussed at the start of this piece, the most recent price behavior remains worrying. As seen via the 4-hour chart view, IOT/USD is moving within a range-block formation. The price is very much within consolidation mode. As a result, it remains at risk of another extended move to the south. It can also be perceived as a potential bearish pennant formation, which technically is subject to a breakout tot the downside.

Downside Targets

IOT/USD weekly chart

Looking at downside levels of potential support, the next area to note would likely be $0.1750. This is a weekly support seen since July 2017, week of 17th. Should this fail to provide any comfort, the next level is eyed at $0.1425, the weekly support for week of 10th July 2017. These moves would be similar to other cryptocurrencies in terms of finding that bottom area. For now, all remains tilted in favor of the market bears.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 86 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Binance Coin Price Analysis: BNB Still in Trouble Despite Recent Strong Fundamental Prospects

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  • BNB/USDT moving within an ascending channel formation, subject to a breakout to the downside.
  • There is much anticipation ahead of Binance’s DEX launch, expected in early 2019.

Binance Coin (BNB) has made a decent recovery since being slammed in November and into the early part of December. The price had initially dropped a whopping 58%, before then being able to stabilize most recently on 7th December. Since, BNB has jumped as much as 20% to the upside, moving within an ascending channel formation. However, despite the gains of late, a similar bounce was initially seen on 25th November to 5th December, before another dump. BNB/USDT had tanked a chunky 35%, after this brief period of stabilization.

Strong Fundamental News Flow

The world’s largest exchange by traded volume will some be launching their own decentralized exchange (DEX), expected for early 2019. There is much excitement and buzz across the social media space for this to go live. The development team have already noted that their BNB will be moving from its ERC-20 token status, which is currently on the Ethereum blockchain. As a result, this will be transferred to their own proprietary blockchain, which is set to be called Binance Chain.

In terms of a decentralized exchange, this technology can facilitate a new type of pair matching, allowing users to be able to place orders in addition to trading cryptocurrencies. This can be done without the need of an intermediary institution, managing the ledger or even controlling the user’s funds.

Elsewhere, Binance recently announced that they will be adding a new feature for the benefit and to attract more institutional investors. They will have the facility to create sub-accounts on the Binance exchange. Finally, the company have also exercised further use of their token, BNB, as these can now be used via Tripio to secure bookings.

Technical Review – BNB

BNB/USDT 4-hour chart

Price action over the past six sessions now is moving within an ascending channel formation. This comes after the decent bounce from the low on 7th December, having dropped to a low of $4.1200. At the time BNB/USDT was very much oversold, dropping to 26 via the RSI on the 4-hour time frame. Technically, such moves are subject to a potential breakout to the downside.

Support Levels

BNB/USDT weekly chart

Near-term support should be noted at $4.8000, which is the lower part of the observed ascending channel. Further south, eyes would be on the 7th December low at $4.1200. BNB/USDT is already trading around the lower levels seen since December 2017. Lastly, should the above-mentioned be breached, then a fall to $3.2500 could be on the cards. This is a weekly support seen for 17th December 2017 week commencing.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 86 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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