Crush Crypto Core October 2017 Report

At the end of October 2017, the price of CCC was $1.0835, representing an increase of 8.4% over the previous month.

Portfolio Construction Methodology

This is the first monthly recap of CCC, so we are going to explain a bit about how we approach the portfolio construction.

CCC is intended to be a core holding to any crypto investor. It is long-term in nature so that investors don’t need to trade in and out of CCC.

We believe a mix of 50% coins and 50% tokens represent a good balance between return and risks. As such, there are two “sections” of the portfolio – coins such as Bitcoin, Ether, and Dash, and tokens such as OmiseGO, 0x Project, and Status.

50% of the portfolio is comprised of blockchain protocols that have real-world usage. This portion is considered to be the “core” of the DAA and the holdings will not change dramatically each month. This portion is expected to have less volatility and return than the token portion.

We don’t want to have a very high allocation in either Bitcoin or Ethereum because you could simply hold them yourself. Why pay us 2.5% a year to hold Bitcoin if you can do it yourself for free?

50% of the portfolio is comprised of high-quality and undervalued tokens. These tokens are selected based on Crush Crypto’s benchmark evaluation process. This portion is expected to deliver a higher return and is will be changed and rebalanced more frequently.

Since tokens are highly volatile and can move over 25% in either direction in any particular day, we want to provide more diversification in this part of the portfolio. Therefore, we aim to have around 10 different token holdings.

Performance Breakdown

In October 2017, we were overweight on Ether because of the Byzantium upgrade, which we expect would cause the price to outperform. It turned out to be a wrong call – Ether price stayed around $300 for much of the month while Bitcoin was up by 49%.

Meanwhile, it was an absolute bloodbath for tokens. Fortunately, our conviction in Status, which was the only token with a 10% allocation, paid off. It was the only token that was up, and it was up significantly – over 30%.

Other tokens were all down for the month, ranging from -14% (Bancor) to -42% (FunFair). However, the fundamentals for these projects didn’t change.

Rebalancing

For the coin side, we reduced the exposure for Ether after the Byzantium upgrade and added Monero, a privacy coin that is heavily used on the dark web.

On the token side, we added 0x, WeTrust, Melon, FirstBlood, and Civic, and got rid of OmiseGO, Edgeless Casino, Metal, and Numeraire. We believe the newly added tokens are more undervalued and have higher upside potential.

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