DAA Manager Insights: JJK Crypto Assets
Confucius’ saying “It does not matter how slowly you go as long as you do not stop” resonates well with the Slovakian crypto community. As our DAA manager JJK points out, a scene is emerging and the quality of meetups is getting better and better.
Your team consists of three members: Juraj, Juraj, and Karol. How did you meet, and for how long have you known each other? In other words, what is the story of your friendship and collaboration?
Two of us, Juraj B. and Juraj H., have known each other since high school, so it’s been over fifteen years now. Karol and Juraj H. are software developers, and they met while working on the same project in 2012. Karol and Juraj H. have been aware of Bitcoin since 2013. We perceived it as an exciting new technology, but, unfortunately, not as an investment opportunity.
In 2015, Juraj H. visited a town in Bali called Ubud. There was a pretty active Bitcoin community there. They organized meetups and persuaded lots of local businesses to accept bitcoin. After one of the Bitcoin meetups, Juraj H. had dinner with some of the other attendees and paid for the food with bitcoin. He realized that it wasn’t just about the technology, but it actually worked in the real world. It was even possible to buy phone credit with bitcoin in Indonesia! Coincidentally, around that time Karol sent a message to Juraj H.; it was something like: “Check out this Ethereum thing, it’s some kind of new blockchain.” The internet in Indonesia was slow, so Juraj H. couldn’t really figure out what Ethereum was about.
However, when Juraj H. got back to Europe, he remembered about that “Ethereum thing.” He started to learn about it and understand how it works and what makes it different from Bitcoin. He bought ether immediately, and told Juraj B. Juraj B. was skeptical at first, but after a week of studying, he was buying ether, too. Juraj H. also told Karol to buy, and Karol didn’t hesitate.
We realized there were other cryptocurrencies, and on the top of that, ICOs were starting to pop up. We started considering which ICOs to invest in.
Usually, when one of us finds a projects worth looking at, he tells the others and asks for their opinions.
We often have calls where we discuss our findings and share information.
You have a mixture of experience, from IT to finance. How do you see the role of people who track interesting blockchain projects; what kind of knowledge is a must?
We sometimes attend crypto-related meetups and conferences such as Devcon. We try to read a lot of news, blogs, and articles and listen to podcasts each day. Based on this information, we often stumble on projects that we investigate further.
The current crypto market is full of FOMO, and most people who entered the crypto market early made a lot of money due to its exponential rise. As a result, many ‘’investors’’ did five minutes of research into a few projects and had enormous returns. Hence, many people think that crypto is this magic machine where you put some money in and you become a millionaire in a few weeks’ time. In comparison, our goal is more long term; we are not seeking huge short-term profits but are trying to identify crypto-assets that will survive the test of time.
We strongly believe that blockchain technology is here to stay and that it will bring similar innovation to our lives as the internet did.
Another common mistake of newcomers into the crypto market is their conviction about their skills for selling highs and buying lows. In other words, for many people, volatility is very appealing, and they absolutely believe they can day trade crypto markets. We are strong supporters of the HODL strategy, which is why we like the DAA idea on the ICONOMI platform, which incentivizes people to invest long term.
When evaluating a project, we try to look at a couple of things. First of all, we need to filter out scams. We check if a given project has real-world utility, who the team members are, what technology they use, and whether there are competitors. Also important are the roadmap and whether the project delivers according to its plan. Furthermore, we look at how coins are emitted and who the holders are. Our advantage is having software developers who can check the code of projects.
Slovakia — what is the story regarding the crypto scene? Are people aware of crypto’s development? Are there many meetups?
The crypto scene is definitely emerging in Slovakia. A couple of years ago, most of our friends and colleagues weren’t aware of cryptocurrencies. They may have heard about Bitcoin, but that was it. It’s fascinating to see how it has changed in the last two years. As prices have surged, many people we know have started trading. Mostly, they trade daily and buy coins they haven’t got much information about in anticipation of high returns. We hope this will change and that people will no longer see crypto as only a get-rich-quick scheme.
Regarding meetups, there weren’t many in the past. Nowadays, there are plenty of them, and they are always full. The quality of meetups is also getting much better, and they are not just about the basics of Bitcoin, blockchain, or prices anymore; there are meetups dedicated to more technical topics or particular events, such as the DAO hack, Parity multi-sig issue, etc.
In general, crypto awareness and knowledge in Slovakia used to be much lower compared to, for example, our neighbors in the Czech Republic (particularly Prague), which is considered to be one of the leading crypto places in the world.
Nevertheless, Slovakia is getting up to speed now, and it’s amazing to see so many people interested not only in price movements, but also in technology and its potential impact on our lives.
Your strategy is to divide your array into two parts. Can you explain the logic behind this and how you define the percentages of these two parts?
When we started our asset allocation process, we divided the available crypto assets into two main parts. The first part is the core, consisting of established and well-known assets. We consider these assets to be more stable in times of greater market volatility. Our main position is in ether, which we see as the main platform for blockchain use cases. Even though the ether price has seen a tremendous rise in recent months, we still think it has potential to rise further, mostly due to technology improvements (such as Casper and sharding) and the number of developers/projects building on the platform.
Unlike other DAAs, we decided not to include Bitcoin or Bitcoin Cash in our core. Even if we like Bitcoin, we believe that currently its technological progress is stale and there are many competitors with superior tech. We don’t think that Bitcoin will die, but we see a brighter future for other crypto coins right now.
The core part has an allocation of 30% at the moment, but this may change; for example, we will increase this part’s allocation if we anticipate a correction or a bear market. Once fiat money or stable coins are available on the ICONOMI platform, we plan to use them as protection against strong downward trends.
The second part of the DAA consists of assets from promising, innovative, and undervalued projects with high growth potential. Compared to 2017, when almost every coin grew exponentially, some of them even regardless of having any fundamentals or utility, we expect the market to start distinguishing quality projects in 2018. We think the crypto assets included in our DAA have strong teams, are aimed at delivery rather than hype, and are able to bring real-world impact.
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