Behind the TIB Investors Journal #9 - More Rising Star AltCoins
Rising star coin makes 1000% in 4 weeks. Beginner's luck perhaps or a clue about a solid process. I am putting my money where my mouth is and working on the process. The article covers the 4th altcoins portfolio I am constructing. This time I put together a portfolio on Binance, the fast growing Chinese crypto exchange. Like the portfolio I constructed on Gate.io, this portfolio will be based on coins that trade in Ethereum markets.
The selection process I am constructing portfolios of rising stars that have made the top 200 in market capitalisation since November 2017. I do not know which coins will be the winners but the market is giving us clues in the pace of rise. Here is the process:
- Go back two months and get the top 200 then. I used November 5, 2017. https://coinmarketcap.com/historical/20171105/
- Get the list of the top 200 now. https://coinmarketcap.com/
- Pick out new entrants to the new top 200 list. Excel does a good job of that.
- Calculate the rate of rise from two months ago from the whole list to the current top 200 list. Some of these will be new entrants that were not around in November.
- Identify the exchanges the coins trade on
You can follow the screening proces in the video I made. There is a mistake in the logic I used to calculate the rate of rise. The Lookup function in Excel does not deal with a missing value in the Lookup table properly. I creatd a workarond to check for that.
For this portfolio I am using coins listed on Binance and traded in Ethereum. Here is a snapshot of the list of 10 coins. As I was looking to invest around $1,000 I was happy to run with a list of 10 coins.
The snapshot shows the pace of rise, the November rank, the NOW rank. List has two parts - the first 5 were ranked in November and the 2nd 5 were not. I have put in a one liner describing the application area the coin covers. Good practice would be to read through all the white papers and understand the propositions well and follow some of the social media discussions to smoke out any dogs and any pump and dump schemes.
I rely on the rate of rise up the market cap tables. I did read all the websites. I did like the fact that some had very specific propositions - e.g., content management for gamers or tracking ownership of digital assets (close to my heart as I am a photographer); making an earning model for Wikipedia type sites. I am not a great fan of the me-too blockchain apps but we do not really know which ones will be winners. It feels a bit like 1999 to me when the world was chasing every dot com Internet model.
I had to wait a few days for Binance to open for new applications. I did avail myself of an affiliate link so that I could get rebated trading fees. Account opening process was painless and transfer of Ethereum to fund the account was all done inside 15 minutes. I transferred Ethereum from my Ethereum mining activity to the account and put in bids for 10 coins. I simply put bids in between the bid and ask price and let the market find me in the middle. Here is the spreadsheet of the first cut portfolio started on January 9 when the Ethereum price was $1193.
The sheet shows the latest price in Ethereum in column 1 and the Units in column 4. The % change column is the change in price in ETH terms - I have also pulled down USD Prices so that one can see price move in ETH and USD terms. The last column shows the portfolio mix - you will see each is around 10%. By the time the spreadsheet was made latest ETH price had moved up to $1233.
Now there are some specific wrinkles to trading on Binance.
- Binance Coin (BNB). Trading is discounted if you hold BNB and choose to fund trading costs with BNB. Binance also plan to buy back BNB out of trading profits. They will destroy these coins and that should drive the value of BNB up. I bought BNB - some will be used for trading costs and the rest will look like an 11th coin.
- Round numbers Binance only allows withdrawals of whole coins. Partial coins can become orphans.
- Verification is layered and limits are applied for each level of verification. Some of the limits to withdrawals are not clearly spelled out.
As to the components
Aion (AION): Federated networked blockchain to integrate across blockchains.
Enjin Coin (ENJ): Content management system for gamers. Gaming is not my thing but this is a huge marketplace
Nuls (NULS): Blockchain development tools
Po.et (POE): Track ownership of digital assets. This is also a huge application area and one of the reasons I got interested in Ethereum smart contracts
Lunyr (LUN): Lunyr is aiming to inventivise the creation of Wikipedia type resources using a token and an upvoting/downvoting system
CyberMiles (CMT): The general description is a blockchain to empower decentalised marketplaces
WaBi (WABi): This is a Chinese initiative to deal with product counterfeiting. This is a huge opportunity area fraught with problems
Bread (BRD): Bread are aiming to build a decentralised financial system especially for the unbanked but more likely to find application in cross market transactions
Genesis Vision (GVT): Genesis Vision is trying to deal with a specific problem in cross market place operations - how to verify trustworthiness.
Gifto (GTO): This is a blockchain to failitate universal gifting.
I have created a single spreadsheet that covers all my AltCoin portfolios. This portfolio is on the tab called BinanceETH (the 4th tab). You can find it here http://mymark.mx/AltCoin
You will need to install Google Sheets app to run this on iOS. Spreadhseet should update on loading. If not, edit the 1st cell in any sheet. Please do not edit anything esle as this is a shared sheet. Make a copy of your own to play with. Please close sheet when you are done.
What's Next?
- Set up another portfolio of Rising Stars on KuCoin
- Review one month performance for each portfolio and do some rebalancing. - probably dumping the worst coin and adding in a new replacement using some of the gains from the leading coins.
- Extract the winning themes to use to identify new coins.
Notes
This portfolio was constructed on January 9, 2018 just before the big collapse in crypto markets. These coins were hit hard as was Ethereum in which they are quoted.
Credits: Market capitalisation data can be found at https://coinmarketcap.com/
Coin logo images are copied from official Twitter profiles for each coin. Binance logo comes from the official Twitter profile.
Links:
Referral link for Binance.com http://mymark.mx/Binance
Constructing 1st Altcoins portfolio - next 8. http://mymark.mx/BehindTIB5
Constructing 2nd Altcoins portfolio - rising stars. http://mymark.mx/BehindTIB6
Constructing 3rd Altcoins portfolio - rising stars. http://mymark.mx/BehindTIB7
The Spreadsheet summary http://mymark.mx/AltCoin
Ok @carrinm. While somewhat inebriated I'm also impressed. You seem to be a pure empiricist like I am. This evening over dinner I likened my methodology to an engineering project, after my second or third glass of wine and while talking to a fellow engineer. I'll read more late.
Regards,
Rick
Nice post.I respect you very much because you contribute to steemit.I will do activities like you.I would like to extend the steemit.
When you repeat the same comment on multiple post you sound like a bot! If it walks like a bot, squawks like a bot, it may be flagged for being a bot!
Your Reputation Could be a Tasty Snack with the Wrong Comment!
A good first step would be to write some words in your profile and get a profile picture.
This is an interesting methodology :) What do you think will happen to Raiblocks after its Binance listing? Do you factor in those kind of strategic moves?
While my methodology is about following coins the market already has confidence in, I do listen to the vibes a bit. Raiblocks (XRB) came out quite high up in the list of rising stars. Rather than speculate on what a listing on an exchange will do I will check out an exchange if there are interesting coins on it. Raiblocks plus two others I was interested in are listed on Kucoin - I opened an account there and my 5th portfolio started there. I will write that up in a day or two
If XRB does list on Binance, I am sure there will be a solid pop in price - and I will be already there.
There is another method in my approach. I am spreading my risk of exchange risk by being invested across several different exchanges. You will have seen the hack of NEM on Coincheck over the weekend. I have spread my risk away from a single point of failure this way. I do hold NEM - not on Coincheck = no risk for me other than the hit on price.
Hey thats really wise indeed. I do the same. I trade on 8 exchanges and I keep my major currencies like BTC and ETH on Nanoledger. I am hedged to the moon with different categories of crypto plus different exchanges.
and of-course I have 2FA on every exchange just to be safe. Id also say my PC has anti-virus, anti-malware and anti-exploit.
Nice to see people as serious as me with regard to safety of investments, some people tend to be careless. I commend your professionalism.
Hard lessons learned from 1999