So what is the 2021/22 Crypto trading plan?
Strategy (what and why). It is to grow the contribution of Crypto to our overall wealth by at least 50%. Why? Because we aspire to “formal” retirement from consulting within five years and Crypto is one of four sources of income planned by that stage. It is intended that Crypto investment adds an additional 25% to “retirement income”.
Plan. Consistent with other plans, all number goals are for what I refer to as “Target Plan”. There are two other plans. On the low side there is a “Minimum Target” and on the high side there is a “Stretch Target”. If the minimum target is not achieved for two consecutive years, the contributing element (in this case Crypto investment and trading) ceases to be a component of future income. All efforts are then redirected to one of the other three sources of income, or a new fourth if such is identified.
The Plan considers the Who, When, Where and How that delivers the outputs consistent with achieving the Strategy with regard only to the scope of work within the Strategy - in this case “Crypto”.
Scope and out of scope.
In May 2020, scope was limited to investing an agreed amount of Fiat currency (in our case Pounds Sterling) into Crypto currencies, and the only thing that was agreed at the outset is that this opportunity would not exceed 5% of our wealth in the first year. During that first year (10 months to be precise) the Plan was gradually expanded in detail during which time I sought to understand the fundamentals of how Bitcoin came into existence, the difference between Bitcoin and Ethereum, and much later to understand why there were so many crypto currencies being created, and for what purpose.
After what seems like a very short 18 months exposure and participation, our single objective “invest up to 3% of funds in crypto” has become far more diverse and our expectations have become broader too.
The crypto plan now breaks down into three components:
The original crypto investment plan that concentrates on large cap crypt currencies. Nominal holding of different contributors should not exceed ten token types, and the overall value of this Large Cap should be between 80% and 95% of total crypto holding. This includes up to 10% of stable coins maintained on balance to take advantage of “trading” opportunities on a daily basis.
Up to 10% of the overall crypto portfolio may be assigned to asset investment that would create income from mining (or farming).
Up to 10% of the overall crypto portfolio may be assigned to what I refer to as “Sh__coins”. Within this category I will seek opportunities to review tokens that have a reasonable chance of multiplying their values by:
10X within 2 years
100X within 4 years
1,000X within 5 years
I have found only one of these within the past six months whose investment is 0.16% of crypto portfolio. Whilst I expect it to fall to zero over time, it is interesting to note that every satoshi (one hundred-millionth of a Bitcoin) it moves in price either gains or loses us $100. It was about 900 satoshis in March 2021 and is now around 1 satoshi. We bought/sold it between 1 and 10 satoshi over three “trades” and the current holding cost was covered by a 50% sale of Dogecoin that doubled in four days.
I continuously seek out Sh__coins to add to our portfolio, so if anyone has identified any please do let me know and I will do some analysis and share. Now in reality, any potential sh__coin cannot in the top 10, so for those with a 10X potential, the cut off market cap is about $3bn. For those with a 100X potential, the cut off market cap is about $300M, and for those with a 1,000X potential it is $30M or below. I have just found one that I may add so that would be 2 down and 8 to go. Anyway, I digress.
On the mining side, I am already in my third month of participating in Chia farming, and have earned the grand total of 0.40 Chia. The target for this “mining income subset” is up to £2,000 per year starting Jan2022 (I have all the hardware required to generate this income and am creating the plots required to farm the Chia tokens). I have found a second candidate (Helium or HNT token) but I am delaying that because there is a 20 week lead time on the hardware. I am just about to investigate a third opportunity in the DeFi gaming market. More on that later.
So back to the main “80% of the crypto portfolio”. Current holdings are:
Currency Percentage of portfolio
Other 0.2 (rounding error)
How does current holding compare with 2021/2022 plan?
Plan is denominated in USD
Current portfolio value = Plan + 6.3% (over-achieving)
Current portfolio profile - Planned was 40-50% BTC, 15-25% ETH, 10% XRP, 15% to 35% other incl stablecoin and sh__coin (achieved)
Current actions required
Proactive ongoing actions and frequencies are:
1 Seek sh__coin opportunities - once per week - up to 2 hours
2 Continue developing the mining contribution to overall crypto plan - three times per week about one hour per session
3 Seek other main tokens that could deliver a 2X before end of year, that are more likely than the current holdings to do so.
For action number 3, there are currently three tokens that I am interested in.
Polygon (MATIC) - see attached chart
Harmony (ONE) - as a potential standalone 10X longer term, but also to feed ONE currency into participation into the new area of potential gaming income via DeFi Kingdoms - an app built on the Harmony network
Shiba Inu (SHIB) - this is the wild card. I do not seriously consider this currency to be a viable long term proposition but it is a great candidate to determine whether application of my trading plan would be profitable.
(optional - Dogecoin (DOGE). This is in case DOGE exhibits excessive volatility before SHIB. During May 2021, I bought a small amount of Doge with the objective of demonstrating to my son that it is not good to follow market chatter or pub talk. But within four days we doubled our investment, cashed out half of it, invested in our first sh__coin and still hold the residual Doge. This is counter to my “serious investment plan” but everyone deserves a break now and then to stop boredom and it is kind of neat to say, in social environments, that “yeah, we bought Dogecoin and doubled our money in four days”. It’s a bit of a conversation starter, to be honest. But then you tell them it was only for the price of a meal, and then the interest wanes.
So about the attached, MATIC chart. After some analysis of Youtube news stories about Polygon, it sits very well in the top ten crypto currencies I want to be invested in, and I agree with the longer term chartists that this has a high probability of achieving a 2X by end of 2021.
Please review the chart, the text box comments, the entry, SL levels if this were to be a leveraged buy, and feel free to comment or ask questions. I intend to post many of these across a broad range of cryptos. Others post enough charts of BTC and ETH to sink a ship. I am more interested in seeing if I can demonstrate an edge with these cryptos by applying my Forex trading plan to those Alts.
Bear in mind, for the time being, that my crypto trading plan does not currently include shorting the market, and does not include leverage. So I would trade these from a Bittrex or a Crypto.com exchange account.