AAAX 3rd Quarter 2018 Rebalance Update
The 3rd quarter of 2018 could be described as a battle in the trenches for crypto markets. Governments, corporations and regulatory bodies continue to fumble over themselves trying to figure out how the blockchain will fit into their existence, but mainly how they will continue to profit or remain useful in a life with integrated decentralised Blockchain. Indeed, this is a question we are all asking ourselves.
This past quarter showed us: no news is bad news in crypto markets! No decision on an ETF in the US by the SEC was a damper on the markets. The elephant in the room remains; while engineers and programmers tap away tirelessly at their respective keyboards: How do we use this technology in the real world and how will it be adopted on mass! Until signs of this are uncovered, unsophisticated investors (who supported the majority of the initial ICO’s) will continue to use every opportunity to move back into fiat currency wherever a false sense of security continues to exist.
Behind the waterfall of the Alt coins market freefall, the work continues unabated driving the planet toward a decentralised integrated cross-chain global network solution. There is a lot to do, and enough focused relentless individuals to achieve the task. Money alone could not buy this incredible effort and feat thus far.
As we exit the quarter, in terms of regulation and institutional activity and developments, things are beginning to heat up considerably — more so than in the last 8 years.
There are more transactions happening than ever across all chains. More interest than ever. Larger acquisitions by corporations of blockchain businesses than ever before (see Nasdaq’s latest victim) — scrumptious. Behind the waterfall, there is another world turning, hustling and shaking that is being soiled by an impatient wrath of negative media.
On to the latest rebalance movements in the AAAX.
During the 3rd Quarter of 2018 market capitalisations of the various portfolios reduced significantly, and to ensure liquidity within portfolios for rebalancing Iconomi implemented a new system for updating our manager portfolios. The new system is slick and easy to implement rebalances — kudos to the ever growing Iconomi team!
New minimum exposures of 8% on holdings of ETH and BTC were implemented under this new structure. Clearly, this was to improve liquidity within portfolios with diversification to improve rebalancing capabilities. The AAAX, as you know, is no exception to this — we pride ourselves on bringing the greatest diversification capabilities to users on the Iconomi Platform.
Therefore, we implemented increases in exposures to BTC and ETH during the period to 8% from 5% and 7%, respectively.
New coins entering the fold: WanChain (2.5%)
Exiting coins include: Cofound.it (1.0%), Patientory (0.5%), Ripio Credit Network (0.5%), iExec (0.5%), DigixDAO (0.5%).
Increased holdings in: Binance Coin (to 5% from 2%), Augur (to 3.5% from 2.5%)
The total number of assets currently in the portfolio are 43. To view the entire portfolio, click here
Wanchain: The token price of Wanchain has come under tremendous pressure in recent months and we see this as a great entry level into the project. The team and project remain on track to deliver on its goals. Wanchain listed on coinmarketcap this year at USD4.00 per token and we are currently purchasing around the USD0.90 level. Compared to the market this is a massive underperformance for a project that brings significant value to cross chain solutions to all Main Nets. We are attracted to the risk/reward dynamics and asymmetry of this project, and its token price at current levels.
Cofound.it: It has been well publicised that the Cofound.it team will be returning the cash raised in its ICO to investors in the coming months. The reason for Cofound.it’s existence is no longer valid given the speed at which the market has developed. Public ICO’s are no longer an attractive method to raising capital in the Blockchain space (we will be going deeper on this in posts to come). Despite much of the negative public rhetoric from the media we see this as a very positive move for the space. You see, the Blockchain and developing ideas and projects are now widely accepted as a technology and great opportunity of the future, and therefore raising funds in the private space (pre-ICO) if the project meets necessary standards is relatively easy. In the past, public ICO’s were necessary because private investors were so sceptical.
Other exiting coins: The major reasons behind the exiting of the other tokens mentioned above are: (1) mechanism to return value to token holders is increasingly uncertain particularly in the AAAX setup on the Iconomi platform, (2) we are no longer confident the underlying teams can deliver on their targets, and (3) the uncertainty on the timing as to when these projects will be needed in the ecosystem has greatly increased.
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Best,
Kenny
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