Blockchain investing strategy
What can we expect from this market and what have we learned from the past?
In 2017 and 2018 the market became highly speculative: bubble chasing, ICO craving, pump and dump engaging, in short; the wild west.
Now we have entered the next phase.
Regulation has began to notice us and competition is fierce. Reality has shown us that we still have a way to go and that it takes time for a new asset class to mature. Bitcoin might be in its adolescence, but many others are still in their very early phases.
For us it's all eyes on Ethereum and Bitcoin. These two have shaped the market to what it is and have acquired tremendous traction.
Our most important assumptions are:
- Total market capitalization will grow by an order of magnitude within 10 years.
- Ethereum and Bitcoin together represent the most innovative aspects of blockchain technology and together represent the bigger part of the total market.
- Ethereum is expected to grow in its representation in the total market.
Just to give a heads up, our Target Click Strategy is one of 3 elements of our core investment strategy.
Want to learn more about how we plan to create added value in the blockchain market?
Target Click Strategy
We should tread lightly, there's a lot going on.
We're fully aware of the facts. We are launching a fund in a fast developing technology.
This is a volatile market and changes are frequent. We think that an investing strategy should not be greedy, and should relieve us from risky emotional decision-making.
It's clear to us this innovation has a long way to go and it's impossible to guess where it's headed. That’s why we have decided to stay conservative in the estimates of our blockchain investing strategy.
We have first developed multiple models about the future of the blockchain market. These models were based on a variety of scenarios concerning Bitcoin and Ethereum.
With these models we have calculated a reasonable scenario for the future. And based on this we have deduced targets at which we start selling assets in our possession.
This has all come together in our Target Click Strategy, with which we sell different amounts on different targets, depending on where the market is in its next cycle.
Our main reasons for a conservative approach are:
- New technology entails new risks.
- The market is extremely volatile.
- Contributing to the adoption of blockchain technology is one of our main goals, financial return another one.
- A fixed and predetermined exit strategy relieves us and our investors from making sentimental decisions and mistakes.
Securing our goals
Considering the risks and potential of the market we’re securing our goals well before we expect the market to become exhausted and over-hyped.
This means that the more volatile your investments become, the less capital you will have at risk. According to expectations we will have achieved our goals within 10 years.
We've developed a final list of indicators and parameters in our investing strategy. These function as a telltale sign for an overhyped and exhausted market.
The blockchain market, and particular the Bitcoin market, has seen a couple of cycles where the market became heavily over-bought and over-hyped.
To make sure we do not become victims of unreasonable hype and emotion we have made a list of indicators which inform us about the state of the market.
For us, this will serve as a telltale to where we are in the current cycle, and consequently advice us on our risk management.