People come to cryptocurrencies for a lot of reasons, but maybe the most exciting is the potential upside of investing early in a new system of value.
As I’ve outlined earlier, one of the goals of CryptoLab is to identify and share good sources of information about investing in cryptocurrencies and trying out different platforms, products, and buying and selling different kinds of currency.
I’ll be honest here, I’m finding it a little bit difficult to find good sources of information about investing in cryptocurrencies that are not bitcoin or ethereum.
Those currencies dominate the mainstream news and are a major focal point for a lot of discussions.
I get that the price of bitcoin is like an index, and its rise and fall correlates generally to the overall health and movements of the rest of cryptocurrency economy.
But I’m not really interested in just buying and holding one coin. Instead, I want to build a portfolio that is diverse and sustainable.
Where can to find good information on cryptocurrency investments?
As I read up on investing in cryptocurrencies, it’s hard not to get wrapped up in the enthusiasm of fans of the crypto. But it is important to remember that these investments are new and unregulated, so even though there is a promise of big gains, there is also a good chance of crushing failures and erased values.
But, that’s what makes things interesting, right?
So, in the interest of trying to study portfolios and get a sense of how more experienced traders evaluate cryptocurrencies and make decisions and allocations, I was looking at some of the work done by Blue Magic Capital. (I should mention here that I don’t have any kind of relationship with them, and there is no affiliate or referral angle, I just like what they are up to).
This is a snippet from Blue Capital’s founder, Frank PM’s, introduction to the company:
To put it bluntly, Blue Magic Capital’s goal is to turn every 1,000$ initial investor into a millionaire in 10-15 years. It may look like a dream, an impossible goal, a MAGIC goal, but believe me, IT IS POSSIBLE and I will work hard to the exhaustion to make that dream real.
To round up the presentation, I have to say that I cannot promise you anything. Maybe Blockchain sector falls into oblivion, or maybe it rises and becomes a key player in humanity’s goal for achieving a freer and more descentralized society. However, everything seems to point towards the later direction. Think of the Internet in 1995. I believe we are in a similar state with Blockchain and here is your opportunity to get in at the ground floor. My point is, opportunities are much greater than the risk taken and Blockchain presents us with a once in a lifetime investment opportunity. There is not much to lose, but a lot to gain.
From what I understand, as of late January 2017, the public is still unable to buy shares of Blue Magic funds, but nonetheless, the company is posting pretty valuable information on the composition of their investments on their website.
All of the portfolios contain cryptocurrencies that do not share the popularity ranks with Bitcoin, which is interesting.
Learning by paper trading cryptocurrencies
Blue Capital has three funds listed, and the individual cryptocurrencies that make up each fund, as well as the percentage of the fund that each currency represents. The three funds — presuming by their names that these are listed in order of risk tolerance — are retirement fund, dynamic fund, and extreme fund.
My goal, over the next few months, is to keep an eye on the three funds and see if any patterns emerge and see if I can understand how they are rebalanced and at what frequency, and maybe most important, how they grow over time.
The biggest takeaway is that it looks like there is a lot of opportunity to invest in some of the lesser known cryptocurrencies. One tactic that I’m going to try is to keep an eye on Blue Magic Capital and other funds and traders and see if I can get a sense of how they evaluate a potential investment and then develop my own system.
The final step, of course, will be actually buying in, and then waiting.
Please be in touch if you have any guidance or suggestions about other good sources of information for getting a cryptocurrency investment portfolio off the ground.