Yesterday, we published our Q2 performance overview, outlining the top three DAAs: Trade, Cornucopia Index, and Exponential Age Array. We asked the managers of these three DAAs — Cain Ransbottyn, Elad Shtilerman and Sven Van de Perre—to share their views on market developments in Q2, their management strategies, and more.
Cain Ransbottyn: Trade (TRADE)
How do you view Q2 for the digital asset market?
We had a staggering bull run at the end of 2017, with many individuals coming into the crypto space to make some quick gains. As with every market trend, anything that goes up that fast must come down again so that value and price are realigned. The problem with crypto is that all of this goes relatively fast, which is why many individuals who got in late in 2017 lost their confidence during Q1. This trend continued in Q2, when FUD and market manipulation were inevitable. However, with many projects having their deadlines at the end of Q2, projects were bound to go through this rough patch, some more than others. This is why we approached those particular coins as opposed to coins that may also be valid but had no major updates or events coming up in the near future.
What was your strategy? How often did you rebalance? Which coins performed best in your DAA?
We started Q2 in April with a big stake in ETH (20%) and went for an equal share of roughly 10% in LSK, ICX, ANT, ENG, EOS, DASH, and OMG. In May we took an even bigger share of ETH (27%), removed ICX and ANT, added EOS, and took profits. In June, our biggest stake was still in ETH (20%), and we invested more in ETC and WAN (10% each). Investing in ENIGMA and EOS was a good call and gave us an extra boost!
The fact that we thoroughly believe in ETH and ETC rather than BTC is our unique selling proposition. It’s not a secret that we don’t believe in BTC. Most everyone who believes in crypto believes in “bitcoin.” We haven’t believed in bitcoin as a currency for a long time; in fact, we think bitcoin is for losers! But we do believe in blockchain technology — or, rather, crypto technology.
BTC still follows a “proof of work” protocol. As the world pays increasing attention to saving energy, proof of work is known for having a high rate of energy consumption. This needs to be addressed in the future, otherwise currencies that continue to use this technology will die out automatically. The need for faster transactions, lower transaction costs, and more energy-efficient techniques remains. We have no doubt that these problems will be tackled systematically and that cryptocurrency still has a very bright future ahead of it. We believe that bitcoin will remain the market leader because it is the original crypto coin, making it the market reserve currency through which all other alts are partially connected. But if you invest more in altcoins, you have a greater chance of increased profit than if you only have bitcoin in your portfolio.
Do you think the correction is over?
Who knows? Does it even matter if it’s over? In the long term, we believe in the potential of these blockchain projects, and so far, we have only seen a huge increase in value over Q2, while the price keeps dropping for some projects. As with overbuying, overselling will lead to stabilization within a relatively short timeframe, so we are at ease.
What stood out in Q2?
The mainnet launch of EOS (and its failures) for sure, as well as the new coins being listed on ICONOMI and all the chain projects (Quarkchain, Edenchain, etc.).
What was a key element for good performance in Q2? What are the trends for Q3? Which coins are you betting on most?
We have been seeing some sideways action during Q2, with a slight downtrend globally. We think this trend will continue further into early Q3. However, up or down, we will need to see a breakout either way. We are optimistic and believe the downtrend will be broken in late Q3 with a slight rise in price. Due to the many successful mainnet launches and more projects actively delivering, we believe this uptrend will continue in Q4 with another bull run. Though right now opinions on price action are divided, we believe that the creation of a Bitcoin ETF and the destabilization of the classic economic system, together with an expected downtrend in the stock market, will lead to major players coming into cryptocurrencies. We will no longer be in the early adopter phase, which will allow us to transition into a more economically stable market in 2019. The biggest impact on the next bull run will be market manipulation. Until we have “decent” regulations, the market will be too dependent on manipulation. Don’t forget the recent reversal immediately after the December CME futures launch!
The transaction speed of most platforms (Ethereum, Lisk, Wanchain, etc.) is rather low. Dapps cannot become a true success until the underlying layer can handle the load. If you really want to know when we have the next decent bull run, it will happen when crypto can compete with Visa in transactions per second!
Is there anything else you’d like to add?
The reason we are the best-performing ICONOMI DAA in Q2 has nothing to do with our arrogance but is because we are technical nerds and geeks and true blockchain developers/lovers/evangelists. We are not financial elitists or Wall Street hippies. We are the self-described Wolves of Crypto living the #cryptolife, but that arrogance is backed by a tech team, and we trade on tech facts, not on guts (or even glory). We believe our day trading algorithms can be adapted to work for long-term ICONOMI trading.
Our strategy is not rocket science. We’ve built an automated system that creates a daily overview of all new announcements/events regarding the 73 tokens supported on the ICONOMI platform/ecosystem.
We have our own interpretation of the famous “buy the rumor, sell the news” maxim. Because it takes approximately four days to rebalance, we cannot hedge or go short on zero-day news, so we have developed a new approach to act on announcements about future events.
It’s easy for people to say “we go for the long term,” but our definition of “long term” as DAA managers is more like one month, after which we switch to the next unicorn based on technical analysis and announcements. We take profits and move on to the next coin, coming back later when the previous coin is undervalued. We are not HODLers; we are nerds and geeks, and we give “long term” a new meaning. In our humble opinion, the only way to survive in the ICONOMI ecosystem is to add value. What’s the point of making a portfolio containing the top twenty coins with high growth potential for 2018/2019 and keeping them for twelve months? Any investor can do that himself and HODL; they don’t need a DAA (manager) for that! We want to prove that we add value — and apparently we succeeded in Q2!
We would like to thank ICONOMI for having us and for providing us with the tools to manage the 73 coins available. Most importantly, we would like to show our gratitude to all the TRADE holders backing our ICONOMI DAA; we will not let them down! There is no such thing as second place in the crypto world, so Q3 will be ours … again ;-)
Elad Shtilerman: Cornucopia Index (CRNC)
How do you view Q2 for the digital asset market?
Analyzing data from CoinMarketCap, we see that Q2 had a hill structure with global market cap peaking around mid-May. This behavior was definitely better than the downward free fall of Q1, and I see mixed trends in it. While several projects came to fruition during the quarter, others were probably dramatically cut in market cap. I hope all the new project launches, like Zen protocol, Tezos, and beta releases, will lead Q3-Q4 into a significant uptrend.
What was your strategy? How often did you rebalance? Which coins performed best in your DAA?
I didn’t do much rebalancing during Q2, but rather held onto the relatively large and more stable coins, mainly ETH, BTC, and DASH.
I believe that when the market is in a state of having mixed trends, a more solid approach is due.
The coins that performed best during Q2 were ETH, BTC, and XMR.
Do you think the correction is over?
That is the ten-thousand-ETH question. Again, with many new as well as established projects launching, releasing, building, and delivering on a day-to-day basis, it seems a transition is approaching. Aside from short-term market behavior, I would like to see blockchain technology entering the mainstream. It will be especially interesting to see what fields this will happen in and how.
What stood out in Q2?
There were many things:
- Launches and releases: Golem, Status, DAOstack, Zen Protocol, Particl Marketplace, and more.
- New and ongoing partnerships: GameCredits, Civic, Monero, and others.
- Maturing regulation: It seems that crypto is generally much less ignored and is being examined thoroughly by regulatory bodies such as the SEC and their counterparts in other countries across the globe.
I don’t think there is a single most important development for Q2. The main aspect is the ongoing building and establishment of projects in the space.
What was a key element for good performance in Q2? What are the trends for Q3? Which coins are you betting on most?
For CRNC, I think the key element was sticking to the large, established, more solid coins. I think the relatively low exposure to smaller tokens was right for Q1 and Q2. For Q3, I plan to maintain a high stake in ETH while gradually increasing holdings of GNT, ZRX, KNC, PAY, and CVC. I will perhaps add another coin or two to the portfolio from XLM, BNB, and GNO.
Do you think the bottom is in? When do you expect the next bull run? What do you think will be the most important factor that will trigger the next bull run?
Again, very hard to say. The markets are still very volatile, with news, announcements, and regulatory action drastically shaking up supply and demand by the day. I am optimistic that the end of Q3 and the beginning of Q4, with more and more projects maturing, will bring a tipping point. I think the most important factor now is regulatory clarity in leading countries. Once the entry and exit points to/from holding crypto are very clear regulation-wise, the doors for institutional-level investors as well as everyday people will open. I think such a development may trigger the next bull run.
Sven Van de Perre: Exponential Age Array (EAA)
How do you view Q2 for the digital asset market?
I’m part of a few closed crypto analyst groups, which helps me keep my finger on the pulse. Q2 has been a very unpredictable market. A big reason for that is that the market is being manipulated by crypto whales. These whales have made the market move in ways that were simply unpredictable. More importantly, they’ve kept the market down, which is in stark contrast to all the good news that has been coming out: SEC regulation for BTC and ETH, crypto becoming mainstream in many ways—the list goes on and on. There is, however, a silver lining to all this: we can all still get on board for cheaper than expected.
What was your strategy? How often did you rebalance? Which coins performed best in your DAA?
The strategy is: do a lot of research, know your market, and rebalance BEFORE the market moves in a certain direction, not after.
Since spikes in growth are always right at the beginning, we did only one rebalancing in Q2. We’ve added Zilliqa and Neo, among others. In the short term, we were probably better off keeping the old set-up, but we’re confident that as time moves on, our new rebalanced portfolio will be somewhere at the top of the ICONOMI charts again.
Do you think the correction is over?
Market manipulation is unpredictable. The correction should have been over months ago, since good news and growth have outweighed the bad stuff for at least a dozen weeks now. The only thing we know is that we’re closer to a new period of growth than we were a few months ago. At EAA, we don’t focus on current market value. The advice we give our clients is: You’re an early adopter. Focus on your amount of coins and tokens, not on how high their price is. Set up a plan to invest monthly, no matter what the course. And play the waiting game. That’s what the big boys do.
What stood out in Q2?
The inability of the market cap to be somewhat in line with the potential of the business. If you want proof that crypto is still really in its early years, this is it. Only very young markets can be manipulated like the crypto market is being manipulated now.
Some companies are going from promises in a whitepaper to actual, tangible proof. EOS is a good example. So is Monaco. Those companies haven’t reached their goals yet, but as a professional technology analyst, I can tell you they’ve got all the signs of becoming the mega corporations of the next technology cycle.
What was a key element for good performance in Q2? What are the trends for Q3? Which coins are you betting on most?
Whether people manipulate the value of bitcoin and take all altcoins along for the ride doesn’t affect the growth of the businesses these altcoins are building. In Q3 and beyond, you’ll see more and more teams from 2016 and 2017 ICOs implementing their plans. Blockchain makes those businesses so much more competitive, so they’re bound to grow and capture market share. Which ones will shoot up first is hard to tell, but if I had to pick one, it would would be Monaco (MCO). If you haven’t signed up for their card yet, do so now. And be sure to have MCO in your portfolio. Because when they roll out their crypto card, their value is going to grow exponentially.
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