Q3 2021 in crypto — a private investor’s take
We have had interesting 3 months in crypto. From the lows of USD 29k per Bitcoin in July, to the highs of USD 53k earlier this month, and then back down again to USD 43k, partly due to macroeconomic uncertainty as well as a scare regarding US and China regulations on crypto. So far though it doesn’t seem that any of these news are truly game changing and if we zoom out, we are still significantly higher than at the beginning of this year, despite the cool down. The hope is this upward trend continues, though the above mentioned developments need to be closely watched.
Overall, my portfolio is up 32.7% in USD terms, compared to 3 months ago. This is 14.6% higher than the rise in the price of Bitcoin alone over this period, meaning selectively investing in a diverse range of crypto tokens has been paying off. My biggest portfolio holding at the moment is Ethereum followed by Bitcoin (60% of portfolio combined). The rest is divided between NFTs, DeFi, and social tokens (in descending order of magnitude).
Non-fungible tokens (NFTs) have been the hottest trend this quarter and my portfolio is positioned to keep capitalising on this going forward, including gaming NFTs, which is possibly the most well funded sector, at the moment.
Decentralised finance (DeFi) tokens have not seen much growth, compared to earlier this year, but DeFi remains one of the strongest current use cases of crypto, so I remain selectively invested in the DeFi products I find both promising and currently undervalued. (there are a few).
Social tokens are another category which has been emerging just recently but shows a lot of promise — communities of people incentivized by a token working together to build, promote, and consume various products — could become a major force inside and outside of crypto. For two of my largest social token holdings — Bankless and Jenny Metaverse — I am now both a holder and an active contributor in the respective Decentralised Autonomous Organisations (DAOs) — both keeping a close tap on and helping to shape the community’s development.
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Outlook for the next quarter (speculation)
Going forward, the best case scenario is that the upward trend (or bull market) we have been in since last year continues across crypto and Bitcoin reaches new All Time Highs, which normally brings the rest of the crypto market up with it. When this happens, this is basically easy money, as there is profit to be made almost no matter what one holds. It’s easy to be a genius in a bull market!
The middle ground scenario is that, following the last few months, Bitcoin continues to move sideways, within a limited range (though volatility may remain relatively high). This would mean much less significant (if any) profits but it is good for allowing time to conduct more thorough research into new projects and focusing on building up the ecosystem with a long-term view, to lay the foundations for further growth later down the line.
The bad case scenario is that the upward cycle we have been in since last year ends with a dramatic downward spiral — similar to what we have seen at the start of 2018. This would likely mean a significant loss in USD terms, in the short to medium term. However, the vast majority of my positions are projects I believe to have long term potential and am comfortable holding long term, even through a possible bear market. Similar to 2018, although the value of Bitcoin plunged drastically, people that held and did not sell eventually made a profit, after BTC rebounded to all-time highs and beyond, once again.
Therefore, I believe my portfolio is well positioned going forward, no matter the scenario. That said, all of this is just my subjective view pertaining to my personal strategy on the management of my own private funds. Nothing in this statement should be considered financial advice. Happy Friday!
To learn more about my journey in crypto, check my other articles on here or ➡️ follow me on twitter 🐦. Feel free to clap if you like this article -
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