CRYPTO ACADEMY SEASON 3| WEEK 3 - HOMEWORK POST FOR PROFESSOR @allbert by @kelechisamuel

Today's lecture gave an insight on the DCA method of creating a portfolio opening our eyes to patterns and smart strategies that can be used to minimize lose or enhance gains

SELECT TWO CRYPTO, PERFORM FUNDAMENTAL ANALYSIS, AND BASED ON YOUR FUNDAMENTAL ANALYSIS EXPLAIN WHY YOU CHOOSE THEM

For the sake of this homework, I will be selecting two cryptos which are ripple (xrp) and Tron

RIPPLE (XRP)

The ripple is a decentralized system with the purpose of creating almost free transactions. The token could be seen as a transfer system in which account owner do not have the need for a middle man unlike Bitcoin which increases the cost of transaction fees

Also ripple set to solve the problem termed as "double payment". For example a user who has enough fund to cover just one transaction but signed in for two different transactions simultaneously, although the two transactions are correct, but if the distribution network isn't aware of the both transaction it causes double payment. Ripple is set to correct such distribution payment system using the ripple protocol which also aid to detect malicious users and detect the network size.

They have a shared ledger which confirms and stamps transaction instead of using a consensus before any transaction or transfer which gives it a faster speed.

FINANCIAL STATISTICS FOR RIPPLE

currently ripple is Ranking no. 6 on the coin chart with a price of 0.6234 on the average and a market cap of 28,812,986,287 and a volume of 1,937,378,324 all data's can be seen in the screenshot above

REASONS FOR CHOOSING RIPPLE

• Ripple aids in supervising payments which could be bulky to sort out with heavy coins like Bitcoin

• Ripple makes working with financial institution very very easy

• Ripple's reputation has been on the rise with a prominent potential in the coin rise over sometime

FUNDAMENTAL ANALYSIS OF STELLAR

The stellar aims at fixing the mess of financial insfrastructures in closed systems, increase transactions speed and reduce transaction costs with the aim of giving them the feel and experience they get on the internet

The stellar protocol is backed by the federated Byzantine agreement which ensures that consensus is fast and accurate and this aids small organizations to gain access of big industries like banks although all informations and list must be exact and agreed

FINANCIAL ANALYSIS

Stellar is currently ranked no. 18 on the coin chart, priced at $0.2404 with a market cap of $5,599,552,453 and a volume of $415,272,883

REASONS FOR CHOOSING STELLAR

• it gives a very low transaction cost when compared to others

• The vision of fixing up the mess of the traditional bank is something I cherish so much

• it easy to exchange with others coins and it is an amazing advantage

QUESTION 2: THROUGH YOUR VERIFIED EXCHANGE ACCOUNT (SCREENSHOT NEEDED) MAKE A REAL PURCHASE OF ONE OF THE CYPTOCURRENCIES SELECTED IN THE FIRST ASSIGNMENT AND EXPLAIN THE PROCESS

For this question, I will be using my finance account to make purchase of ripple (xrp) as mentioned in my number 1

Below is an image of my verified account as required for this homework post

To make this purchase I will be trading my already kept usdt for ripple

• Click on market, search for xrp/usdt on the search button and click on it

• Below we can seen the chart trend and the current price, click on buy to proceed

• I will be trading 11usdt for ripple, after in putting the figure, click on buy

• Below you can see my purchased ripple as required

QUESTION 3: MAKE A SIMULATED EXERCISE, USING THE DCA METHOD TO PERFORM THE PURCHASE OF TWO ASSETS AND PRESENT CHARTS SHOWING THE DATA OF DAYS IN WHICH THE OPERATION WAS PERFORMED, PRICE OF PURCHASES, AVERAGE PRICE, SELL POINT, PERCENTAGE OF PROFIT OR LOSS

As we were taught, the DCA method is an investment method used to build portfolio most especially by novice who have little trading experience or information. So instead of making a bulk purchase of an asset, it is broken in to bits and invested at intervals

For this homework post, I will be starting with stellar/usdt (XLM/USDT)

From the chart above I had a total of $200 and I will be investing $50 every week consecutively

In the first week after observing the charts, I made my first purchase on the 7th April 2021 at $0.5017

The second week being 15th April 2021, I bought xlm after the price made an increment to $0.6207

The third week I bought on the 23rd April 2021 after a downward trend and we purchased at $0.4607

And finally on the fourth week a little increment was observed and I bought at 0.5017

Dates	price of coin at that time($)	amount invested($)	total value received
7th APR 21	0.5017	$50	99.66 XLM
15th APR 21	0.6207	$50	80.55 XLM
23 APR 21	0.4607	$50	108.53 XLM
30 APR 21	0.5017	$50	99.66 XLM

With a total of $200 shared across-the-board for 4 weeks I made a total purchase of 388.4 XLM and after much considerations I decided to sell at 0.6820 which gives me a sum of $264.88 showing I made a profit of 64.88 giving a percentage profit of 32.44%

After adding the 4 initial prices and taking the average, we have an average of $0.5212.

Assuming I fixed in a bulk investment of $200 at 0.5017 it would have yielded 398.64 XLM and assuming I decide to sell at 0.6820 it would have given a sum of $271.87

To that effect, although I made profit with the DCA strategy, I would have made more with a bulk investment and an accurate pull out at 0.6820

DCA STRATEGY ON RIPPLE(XRP)

For this asset, I also invested a total of $200 spread in 4 weeks space at $50 per week

At week 1 on the 7th of April 2021 purchased at a price of $0.9230

At week 2 on the 15th of April 2021 . I purchased at price of 1.7608 following an upward trend

At week 3 on the 23rd of April 2021. I purchased at a price of 1.1602 following a downward trend on the chart

At week 4 on the 30th of April 2021. I purchased at a price of 1.4024 after an upward trend following that week

Dates	price of coin at that time($)	amount invested($)	total value received
7th Apr 2021	0.9230	50	54.17 XRP
15th April 2021	1.7608	50	28.39 XRP
23rd April 2021	1.1602	50	43.09 XRP
30th April 2021	1.4024	50	35.65 XRP

With a total of $200 shared across-the-board for 4 weeks I made a total purchase of 161.3XRP and after much considerations I decided to sell at 1.600 which gives me a sum of $258.08 showing I made a profit of 58.08 giving a percentage profit of 29.04%

After adding the 4 initial prices and taking the average, we have an average of $1.3116

Assuming I fixed in a bulk investment of $200 at 0.9230 it would have yielded 184.6 XRP and assuming I decide to sell at 1.600 it would have given a sum of $295.36

To that effect, although I made profit with the DCA strategy, I would have made more with a bulk investment and an accurate pull out at 1.600

CONCLUSION

The importance of fundamental analysis can not be overemphasize as it forms a bed rock of all crypto currency investments before we think of investing our money

Based on the ripple and stellar which I choose for this homework, I strongly believe that they are great investment projects and I will advise investors to buy a bulk of it as they are currently in the distribution stage

Also I think they DCA is a very great strategy although sometimes it tends to minimize lose or maximize gain even though as we can see from my assignment that a bulk investment entrance would have yielded more . It is still advisable to make use of the strategy as it can save you from a total capital loss

Thanks you all for reading my post

Cc
@allbert