My 2018 Buying Strategy
2017 was a whirlwind for those of us in cryptocurrency. My basic thesis this past year was this:
Ethereum is my core holding.
Buy ICOs to "flip" and put the profits back into ethereum.
Profit.
Unfortunately, step 4 is about to rear its ugly head: Pay Taxes.
Looking forward to 2018, the landscape has changed a little. Steem is over a year and a half old, and it makes up a significant part of my holdings. Some of you may know that steem power can be delegated or rented via Minnowbooster, which makes locking up steem extremely lucrative. I don't have enough time to properly curate beyond a few great authors I follow (such as @johnjgeddes) and I'm happy to allow others the opportunity to rent my SP and use responsibly.
(Note: @pawsdog has done us all the service of tracking down rewards pool abusers and letting their delegators know what they're up to. You should head on over and give him some upvotes as it's volunteers like him that help make this ecosystem work)
Back to 2018
My strategy, which I share as an amateur and not a professional, is to use this steady income stream to fund my purchases of other cryptocurrencies this year. Last week's jarring bear markets reminded me of how many excellent opportunities there are to buy when everyone is panicking. However, the problem remains that most crypto markets move together. I get no advantage timing the market if I buy using steem, because it's having just as bad a day as many other tokens. And I don't think of Tether as a legitimate option.
This is where 2018 gets exciting. Two major tokens that are indifferent to the price of BTC, and crypto in general, are being introduced: DGX gold, and DAI.
DGX Gold
DGX gold is a token that will be released Q1 of 2018. Each DGX token is backed by 1 gram of gold held in a vault in Singapore, with third party audits and insurance. DGX tokens can be turned in for physical delivery of gold. The price of gold does not correlate with crypto.
DAI
DAI is a stable coin that is created by depositing (currently) ETH in a smart contract as collateral. It is a decentralized stable coin that is designed to track the price of one USD. There are currently over 9 million DAI in existence, and ethereum founder Vitalik Buterin has discussed their utility in ICOs.
Note: I own both DGD and MKR, both of which gain value when the above two tokens are used. I'll be dogfooding my own investments.
The Plan
My plan is pretty simple: collect steem daily, buy DGX or DAI tokens once every few weeks (not on a down day like today), then hold those tokens until either a great ICO pops up or a major market correction happens. This is when I can make my moves into tokens that are "on sale" at 10, 20 or even 30% (or more) off.
Conclusion
Ethereum is still my core holding
Steem-->Stable Coins-->ICOs
Profit
Pay more taxes.
P.S. This strategy will work with any coins that pay a passive income: early NEO investors who are getting a nice chunk of gas, VEN holders next month, DGD holders once DGX gets widely adopted, you get the drift. Make your money work for you.
-Jeff
I feel interested in your writing, hopefully all your wishes can be realized.
Nice to hear from someone who delegates. I am someone who leases and it really helps me. I appreciate your decision very much.
I think 90% on the garbage posts would be gone if the bot owners and cheeteh/steemcleaners/etc just worked together.
Surely there must be an sql way to make this efficient for everyone. Aren't we all tech-y here?
Thanks for reaching out-I've messaged a few of the people I've delegated to but never heard back from them.
Funny you mention the garbage posts; I've noticed some users like @pawsdog are working hard to expose those who are abusing the platform. I can see something like an online "posse" or two that will spike down the small players. The big ones like haejin are going to require multiple witnesses and/or whales to really take down, though.
nice article. if more people knew how to "make your money work for you", we wouldn't be having as much income and wealth inequality in the world.
You're absolutely right. Learning about time preference is big: some people have very short time preference, and will spend what they have fairly quickly. Others are frugal and save their money, finding ways to take intelligent risks with it.
I some cases you don't even need to take risks. Over the long term time horizon most assets generate high single digit annual returns. Getting into investments at a young age and just topping up consistently over the years will do wonders!
Yeah, I found having cash during the 2008 downturn was incredible, and very low risk.
thank you sir.
nice post