My CryptFolio Investment - Why I Diversified Profits From Ethereum To Litecoin
I recently mentioned about my decision to move some of my stake in Ethereum across into Litecoin. I want to take this opportunity to provide you all with a greater insight into why I made this decision. It is then up to you whether you follow, I am not advising that you should.
Firstly, using my Cryptfolio Matrix, that I introduced HERE, I am classifying this move into Litecoin as a House Fly. Why? Well, simply put, I’m extremely Bullish on Litecoin over the next 40-60 days. My analysis suggests that we could see a price increase of almost 100% within this time-frame; however, keeping with the category of a House Fly, I will look to make a new move once I feel a satisfactory price level has been achieved.
Now let me explain in greater detail why I feel a move into Litecoin right now is appropriate.
- So when I first introduced this move I talked about how Litecoin is in a perfect storm. Confidence in Bitcoin and Ethereum is low in a number of investors, who may be looking to diversify in order to secure some profits in the turbulent times up ahead. The split in the Bitcoin community and the looming actions planned for the end of July/ start of August means that many traders who are not emotionally attached to Bitcoin will look to move their money to a similar platform. After the recent struggles Ethereum has had with ICOs and the flash crash, I believe the stable appeal that led to its recent growth is no longer as appealing for the more nervous of investors. Litecoin, on the other hand, represents something a little different. The recent price rise in Litecoin has shown this analysis to be true, and I by no means think that was all the money that will flow from the 'Big 2' into Litecoin over the next few weeks.
- Secondly, a webpage with an intriguing countdown recently appeared on the MIT site that has a number of hardcore Litecoiners hyped. No one knows exactly what it means, there are rumours it could be a hoax, but there is a lot of serious talk about the page representing the countdown to a serious update release, possible the Lightning Network. Importantly for me, whether the web page is a hoax or not, personally I don’t think it is, the price will continue to rise as the end of the countdown (August 1st) gets closer. As a trader, the idea of ‘sell the rumour, buy the news’ is critical here!
- Finally, Charlie Lee (the Satoshi of Litecoin) has just tweeted today about the upcoming addition of Smart Crypto-Vault (Mast & Covenants) to Litecoin. The expected release of a demo is early July. Again signalling the potential for a huge bull run in the next few weeks.
Few investment moves get me as excited as this one, I’ll be honest. I’ve been following Litecoin for a while, the community is super strong and incredibly devoted to the tech. The next few weeks could see a strong, faithful community getting rewarded for patience and hard-work. Most importantly, I’m looking forward to jumping on this ;)
As the Litecoin community would say, ARISE CHIKUN!
Good article with facts + news... keep it up bro!
Thanks my friend!
nice...
Disclaimer: I am just a bot trying to be helpful.
Thanks for your insights @jhcooper7. Could you elaborate on what motivated you to start a powerdown on Steemit? What are your thoughts about this platform and Steem?
Sure thing. I love Steemit. The only reason I have started a powerdown is that I'm a university student (well just graduated) and my current job is as a digital marketing freelancer, so I have a fairly unstable and intermittent income.
My girlfriend and I are wanting to go travelling for around 6 months in South America at the end of August and I need money to help us live out there. We've costed it out and around $50 dollars a day is enough. I can average this with various sources of income, one of which is Steemit. If I could have avoided powering down then I definitely would have!
In terms of Steem itself, breaking and consolidating around the $2 barrier was huge I think. Part of the reason I begun the power down was because at the time I wasn't sure if Steem would keep rising, and I needed the money. My outlook now is very positive, Steem is one of the few cryptocurrencies with a very strong use case. If it doesn't go up from here I will be gobsmacked!
One final comment, as someone who has always loved writing but never known how to manage blogs or make money from it, I think Steemit is an awesome platform. I have numerous friends who are writers as well and I've done everything I possibly can to get them to create accounts. It's a shame more people don't use it.
Thanks for your elaborate response! Makes perfect sense. I share your love of traveling, especially South America, and I'm sure you will enjoy it! Cheers, @Finance2Nomad
Interesting post! I can imagine it to be a smart decision. I am curious about your thoughts on what will happen in the days after Aug 1st with BTC. How will you anticipate and what would trigger you to convert LTC into BTC after Aug 1st?
Hi @cryptotem thanks for the comment :)
I personally am very nervous about the events occurring around BTC. Part of me is very tempted to convert everything I have to BTC prior to the end of July. If there's a split having coins on both chains could be hugely profitable. However, I have a feeling that the dominance of Bitcoin is largely fuelled by first mover advantage, which just isn't enough. So many other cryptos offer much more than Bitcoin currently does (e.g. Ethereum, Stratis, and Neo) additionally, there are numerous currencies which work better as a currency than BTC currently does (Dash, or PIVX is my favourite).
My gut feeling, and unless something happens to change this, is that Bitcoin post-August will be a shadow of what it once was. Consequently, I am planning on holding a small amount of BTC as a contingency but think I will hold most of my portfolio in the other big coins around that time.
I would keep an eye on the situation very closely because BTC is a lot more resilient than people think, just like at the reaction to the ETF denial! A lot of people focus on the crypto/crypto ratios (e.g. LTC/BTC) however, I recommend watching the USD price around that time, pick a +/- % range and be ready to jump in if it doesn't leave that range!
How are you thinking of approaching it?
I have to say I am also nervous. It could go multiple directions and what happens can only be rationally explained after the fact. I agree that there is much better tech out there which also have more to offer. Probably I will convert my BTC into some other coins in the middle of July, just to minimize risk. I hope to get a better feeling about it in the coming weeks :-)
Haha, everything is clearer with hindsight. I think mid September we will all look back and think the outcome was blindingly obvious! Closer to the time should give greater insight, I saw something the other day saying (I think but I could be wrong) that Segwit2x will be signalled for around the 24th July to try and avoid the events on the 1st of August. Maybe by about July 10th It will be easier to see which way the community is swinging.