Cryptocurrency Update

Crytocurrencies were a sea of red on Saturday (above screen shot from CoinMarketcap.com). Bitcoin peaked at close $2800 (prices differ on different exchanges so the number is for US exchanges and not exact) on Thursday and was below $2000 at one point before bouncing back. According to this technical analysis (note the source), the first correction target is in the $1700’s. This kind of price movement is par-for-the-course for cryptocurrencies. Indeed, the movement in some of the altcoins are multiples larger.

My earlier blog post was in the middle of this vertiginous move up, amongst media exposure in many main stream outlets such as CNBC and Bloomberg. Coupled with buying pressure out of both Japan and Korea where both BTC and ETH prices were about 30-40% above US exchanges, the FOMO fueled rally was all but inevitable. It remains to be seen whether there will be a month-long consolidation as predicted in the CNBC piece or whether it will snap back to $4000+ based on my primitive similarity reading to the 2013 rally. Either way, longer term bitcoin is likely to be higher as I believe a substantial amount of “anti-establishment” capital will be drawn to this “digital gold” rather than the physical one. That said, I remain skeptical about most of the altcoins.

Here’s a quick summary of my activities so far:

  • Mar 2017: Deposited 0.1X into Coinbase/GDAX (X is my estimated annual retirement spend as usual)
  • Apr 2017: Traded LTC along side the SegWit development
  • May 2017: Took some profit and withdrew 0.028X (28% of initial deposit)
  • Value of coins remaining: >0.2X with positions in BTC, ETH, and LTC
  • I have placed several limit sell orders far above the market. Hitting all of them will mean I have sold 30% of the peak coin holdings and have withdrawn the entire initial deposit.

Obviously, I have nothing to complain about. I started this foray fully prepared to lose everything, and in two months the gains are meaningfully impacting the total portfolio. I can only hope to be able to control the position size so there is no adverse impact on the overall volatility. It’ll be a good exercise in controlling greed.