Crypto Academy Week 11- Homework Post for Professor @yohan2on - Topic: Designing a Cryptocurrency Investment portfolio.

It's barely a decade since Bitcoin became a worldwide sensation. As expected, everytime a new thing experiences remarkable success, other similar stuffs are developed to ride the success wave with the first one. Since 2010, we have seen remarkable cryptocurrencies developed after Bitcoin such as Etherum, Ripple, Tron, ADA, Steem, and lots more.

Although investing on these cryptocurrencies is a little different from investing on physical assets (as cryptocurrencies are "virtual"), the concept of "investment strategy" is the same across board. Let say you want to buy a fleet of cars. You already know that no car company builds a 100% favorable car, for if they do, they won't be able to make sells in others models they make in their company. To avoid this, they either make one costly but fully equipped, while the other is made economical but lacking in some features. This way, a customer must sit down and draw up a strategy that allows him to select the best at certain conditions if he wishes to have the best cars in his garage.

Pixabay.com: Investment Strategy

In today's lesson, Professor @yohan2on while teaching on the topic "Designing a Cryptocurrency Investment portfolio" showed us how we can strategically design a cryptocurrency investment portfolio. This article is my response to the assignment given by Professor @yohan2on after the class.

Question 1: USING AN INITIAL INVESTMENT (MINIMUM OF $50), PRACTICALLY DESIGN YOUR OWN CRYPTOCURRENCY INVESTMENT PORTFOLIO. YOUR CRYPTO PORTFOLIO SHOULD HAVE 6 CRYPTOCURRENCIES AND BRIEFLY EXPLAIN WHY YOU HAVE CHOSEN TO INVEST IN EACH ONE OF THEM. USE A CRYPTO WALLET OF YOUR CHOICE TO HOLD YOUR 6 CRYPTOCURRENCIES. WAIT FOR A DAY OR 2DAYS, THEN SHOWCASE THE FINAL RESULTS OF YOUR INVESTMENT PORTFOLIO USING SCREENSHOT (REPHRASED).

As instructed by the professor, I invested on six (6) cryptocurrencies using my eToro version 317.0.0 app. I had to use the "virtual" account of the app since I did not have up to $50 in my "real" account. The cryptocurrencies I bought are, ADA, Ripple, Tron, Bitcoin, Etherum, BNB. I bought $25 worth of each coin, as that was the lowest amount you can buy with in eToro's virtual account. This means that my total portfolio in the beginning of the trade was worth $150.

STEPS FOLLOWED IN BUYING THE SIX CRYPTOCURRENCY USING MY VIRTUAL ACCOUNT

Step 1:

I first opened the eToro app which I have already installed in my phone. Soon after I clicked on the app, an interface comes up requiring that I type in my email and password (since I already have an account with eToro).

Screenshot from my eToro app

As soon as I did that, I was quickly directed to the home page.

Step 2:
To switch from the "real" account to a "virtual" account, I click on the three horizontal lines on the top left side of the page, which is represented the menu.

Screenshot from my eToro app

As soon as I click on the menu, an interface which displays my username comes up. Just at the right of the username, you will find a green "Real" button with a drop down arrow. I will then click on it.

Screenshot from my eToro app

Step 3:

After I have clicked on the "real" button, I will be asked to select between real and virtual, there, I will click on virtual.

Screenshot from my eToro app

After I have done that, I will find just below the page "Go to virtual Portfolio". Clicking on it bring me to the virtual home page.

Step 4 (Buying Proper):

At the homepage, I will find three different columns, one containing the cryptocurrencies in the market, then the other two are "sell" and "buy" respectively. To buy any of the cryptocurrency, let say BNB, I click on the box at the extreme end of the row that starts with BNB.

Screenshot from my eToro app

Step 5:

After I have clicked on it, the "trade menu" pops up showing that I am buying BNB at a certain value. Since I plan on buying BNB worth $25 (as that's the minimum accepted), I will specific that on the space indicated by the red arrow on the screenshot below.

Screenshot from my eToro app

After I have specified that am buying $25 worth of BNB, I then clicked on "open trade" as shown above.

Step 5:

I repeated step 3 to step 5 to buy the other 5 cryptocurrencies.

Step 6:

To check my investment portfolio, I will click on the menu, then click on portfolio.

Screenshot from my eToro app

Below is my Investment portfolio showing the six (6) cryptocurrencies I bought using $150 around noon of April 28th, 2021.

Screenshot from my eToro app

REASONS WHY I INVESTED IN THE MENTIONED CRYPTOCURRENCIES.

While building my cryptocurrency investment portfolio I considered several factors before selecting each coin. Below is a brief explanation showing why I chose each coin.

• ADA:

ADA was the first coin I considered buying while I was drafting out my investment strategy. I choose it for two reasons: The first is the consistency the coin has shown over the years in accordance to the vision stated in the currency's whitepaper. The second is based on technical analysis.
Last weekend I considered the market chart for ADA, I discovered that ADA will be making significantly profit this week, as I explained in my response to professor @stream4u assignment last week. True to the analysis, ADA has made progress within the week.

• Ripple (XRP):

Ripple is currently ranked the fourth in the cryptocurrency market. Over the years we have seen it grow in leaps. As of ending of last week the value of ripple broke out of its support line and fell to a value of $0.4. This makes now the best time to buy Ripples. Considering it's ranking in the market and it's trade chart, I decided to include it in my portfolio.

• Bitcoin (BTC):

According to Yale, an investment portfolio is considered incomplete if Bitcoin doesn't make up more than 6% of it. This statement is not farfetched as Bitcoin is a fundamental currency among cryptocurrencies. I decided to include Bitcoin in my investment portfolio because of the safety it offers the investor. I am less likely to lose my investment in Bitcoin than any other cryptocurrency.

• Ethereum (ETH):

Ranked second among cryptocurrencies according to coinmarketcap, Etherum has made a name for itself in the cryptoworld. With the number of projects tied to it's blockchain, Etherum has built a large demand for itself such that most analyst believe that it will one day be on the same class with Bitcoin. Although it hasn't made much progress within the week, I believe it's a wise investment on the long run.

• Tron (TRX):

What made me add Tron to the list was it's cheapness. With $25 I could buy 202.76 TRX. That's a significant amount. Apart from it's cheapness, Tron is a promising crypto currency. The fact that Steemit pays partly in TRX further enforces the claim that TRX is promising.

• Binance (BNB):

BNB is popular among cryptocurrencies traders. Apart from being the native coin in the Binance exchange, it is one of the fastest growing cryptocurrencies. It growth is tied to the increasing use for it. These coupled with the fact that it's transaction fee is low made me include it into my investment portfolio.

FINAL RESULTS OF MY CRYPTOCURRENCY INVESTMENT PORTFOLIO

I created my cryptocurrency investment portfolio using my eToro exchange app around mid day of 28th of April 2021. As stated earlier, I invested a total of $150, $25 dollars for each of cryptocurrency. Below is the result for each coin after 24hrs.

• ADA:

Profit made: $0.62 at 2.5%

Screenshot from my eToro app

Using $25, I bought 19.09 units of ADA at a price of $1.3094/units. After holding the coin for 24hrs, my initial investment made a profit of $0.62. At the end of the trade, I had ADA worth $25.62.

• Ripple (XRP):

Profit made: $0.20 at 0.79%

Screenshot from my eToro app

I bought 18.34 units of Ripple at a price of $1.3631/units using $25. After holding the coin for 24hrs, my initial investment made a profit of $0.20. At the end of the trade, the total units of Ripple I had was worth $25.20.

• Etherum (ETH):

Profit made: $0.42 at 1.70%

Screenshot from my eToro app

I bought 0.01 units of Ripple at a price of $2717.9848/units using $25. After holding the coin for 24hrs, my initial investment made a profit of $0.42. At the end of the trade, I had Etherum worth $25.42.

• Binance (BNB):

Profit made: $0.91 at 3.65%

Screenshot from my eToro app

Using $25, I bought 0.04 units of BNB at a price of $566.97/units using $25. After holding the coin for 24hrs, my initial investment made a profit of $0.91. At the end of the trade, I had Binance worth $25.91.

• Bitcoin (BTC):

Loss incurred: -$0.64 at -2.55%

Screenshot from my eToro app

Using $25, I bought 0.00045 units of Bitcoin at a price of $54,988/units using $25. After holding the coin for 24hrs, I made a loss of -$0.64. At the end of the trade, I had Bitcoin worth $24.36

• Tron (TRX):

Loss incurred: -$0.71 at -2.84%

Screenshot from my eToro app

Using $25, I bought 202.76 units of Tron at a price of $0.1233/units using $25. After holding the coin for 24hrs, I made of -$0.71. At the end of the trade, I had Tron worth $24.29.

Below is a picture showing my portfolio result at a glance 28 hours after my Investment. The total profit I made is $1.05.

Screenshot from my eToro app

I plan on letting the trade run for three more days to see if I will make bigger profits than this or not.

CONCLUSION

There are more than 2,500 cryptocurrencies in the world, 90% of which are being traded internationally in major cryptocurrency market. Some of these cryptocurrencies are promising, and therefore worth investing in, while some are "blackholes" looking for another trader to bring to ruin.

For everyone who wishes to enjoy the profits which cryptocurrency investment offers, it is very important that he/she positions himself strategically by setting up a cryptocurrency investment portfolio containing the right cryptocurrencies. These selected cryptocurrencies must have proven itself over the years as reliable, and based on analysis, the time at which they are bought should be the right buying time.

Thank you Professor @yohan2on for the amazing lesson, I truly learnt a lot.