Crush Crypto Core November 2017 Report

At the end of November 2017, the price of CCC was $1.5176, representing an increase of 40.1% over the previous month.

Change in Portfolio Construction

The DAA has been running for two months and we have learned much from it. With so much going on in the crypto world, the learning curve has been both steep and quick. We believe we are much better at managing crypto assets than when we first started.

With what we learned in the two-month period and after much deliberation, we decided to change the allocation of coins and tokens from 50/50 to 70/30 due to the following reasons:

  • Tokens are more akin to business startups. The growth potential for each idea depends on the industry and not all projects are expected to grow at the same exponential rate as the general cryptocurrency market.
  • For example, First Blood is in the esports industry so its growth rate is more comparable to the growth rate in the esports industry rather than the overall cryptocurrency space.
  • On the other hand, some projects like 0x and Raiden help improve blockchain development, so their growth rate is more in line with the overall crypto space.
  • The fat protocol theory suggests that for blockchain technology, value is concentrated at the shared protocol layer (Bitcoin, Ethereum, Dash, etc.) and only a fraction of that value is distributed at the applications layer (most tokens).
  • Tokens in general have a lower market cap and therefore less liquidity. As the DAA grows in size, a change in asset allocation may result in moving the market for some of the smaller tokens. When there is not enough liquidity, we may drag the token price lower when we are liquidating the position or push the price up when we are accumulating, neither of which is desirable.

As a result of the change in allocation, we will be even more selective when choosing which token to be included into the portfolio. We expect the number of tokens in the portfolio to be in the 5-8 range.

We are learning and improving every day. Rest assured that we are now more experienced and capable than ever in managing the DAA for you. We will continue to maintain our transparency and share with you the things that we have learned along the way.

Performance Breakdown

It was a great month for the crypto market in November. Bad news for the space in terms of regulations was minimal, while lots of new money flowed in.

We added Monero to the portfolio and it was a right call – it appreciated by 106% over the month. Dash was the best performer which rose 182% during the month, partly because it was pumped by a crypto newsletter.

As for tokens, the performance is generally positive but most have lagged behind the major currencies during the bull run. The returns of tokens range from -29% (Mysterium) to 41% (WeTrust and FunFair).

Rebalancing

We have increased the allocation in Monero because we believe it is the best privacy coin. Unlike other privacy coins, all the transactions on the Monero network are private, which makes it nearly impossible to trace a transaction back to the sender/receiver.

It also has a reasonable valuable compared to other coins, so we believe it has a lot of upside potential.

We increased the allocation of Bitcoin to 20% because it provides the best downside protection. The longer a bull market lasts, the more cautious we are because things can quickly reverse.

We also added Qtum and Steem because we believe they are currently relatively undervalued and under-the-radar.

As for tokens, we removed Mysterium, Melon, Civic, and FirstBlood because they are not as attractive as other cryptocurrencies in the portfolio in our view.

Video Summary

* The information contained in this article is for education purpose only and not financial advice. Do your own research before making any investment decisions.

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