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From Anthony Pompliano’s new strategy for investing in Bitcoin to the state of Ethereum in 2019, here’s a look at some of the stories breaking in the world of crypto.
Bitcoin
Morgan Creek Digital founder Anthony Pompliano is introducing an investment thesis he calls a “radical protection portfolio” centered on investing 5% of one’s available cash in Bitcoin.
Although past performance does not indicate future results, Pompliano shows the impact that the investment strategy would have had in the past.
“A version of the Radical Protection Portfolio has previously done very well. A 99% cash / 1% Bitcoin portfolio would have driven ~10% annualized returns. A 98% cash / 2% Bitcoin portfolio would have driven ~20% annualized returns. Both of these allocations accomplished this outperformance while simultaneously taking less risk than investing exclusively in Treasury bonds.
Pretty crazy data to look at.
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I call this portfolio the ‘Radical Protection Portfolio’ because it accomplishes two things: (1) capped downside risk of only 5% and (2) potential upside returns in the 20%+ range. There just aren’t many other portfolio constructions that rival these potential outcomes.”
Pompliano points to dwindling returns in the stock market and says although crypto investors should be prepared to lose it all, he believes the potential upside on a 5% investment in BTC is worth it.
“The stock market has reached record highs, debt levels are at levels previously unseen, and it seems like the party can go on forever. Of course, we know it can’t. And it won’t, but that doesn’t stop anyone from enjoying seemingly unending profits and charts that continue ripping upward. The funny thing about overheated markets though is that the future return of those assets is simultaneously decreasing. Take the S&P 500 — for 1997-1999, the three years leading up to the dot com bust, the annual returns were 31%, 26%, and 19% respectively. That performance was followed by losses of 10%, 13%, and 23% from 2000 to 2002.
…the risk profile is quite clear — an investor could lose up to 5% of their portfolio in the worst case scenario. While no one wants to lose money, a 5% loss would be a smaller drawdown than the S&P 500 had last year (-6.24%).”
You can check out the full post from Pompliano here.
Ethereum
The Ethereum development and investment studio ConsenSys has released a report on the state of Ethereum in 2019.
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The detailed report covers Ethereum’s network activity, enterprise adoption, governmental support and venture capital interest.
Ripple and XRP
The founder of the Ripple-backed startup XRPL Labs, Wietse Wind, has formed a non-profit foundation to support development on the XRP Ledger.
The XRP Community Fund initially launched a few months ago, and will be formally registered in the Netherlands.
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Tron
Tron’s just released its latest weekly report.
The new edition highlights the adoption of TRX on the Opera web browser, Justin Sun’s upcoming meeting with Warren Buffet (which has been postponed), progress on BitTorrent Speed and a look at the latest DApps utilizing the Tron network.