As I read the CryptoMoonshots tread a couple of week agos, I tried my luck with some altcoins, but nothing skyrocketed yet. This is some fun money and I see it like casino gambling.
Meanwhile, I started to read about blockchain and find it fascinating and with a lot of long term potential. So I decided to start investing long term in cryptos, this time with more than a couple of hundreds CHF. To invest in the long term, I think about focussing on Bitcoin and Etherum, which are probably the most “secure” Crypto-investments.
Question 1: Do you agree with that? or do I miss another Crypto for long term investment?
Question 2: What would be in your opinion a good allocation between these two coins 50% BTC, 50% ETH, or something else?
Question 3: Would that make sense to do some periodic rebalancing? buying ETH/XTC when price is low, or selling ETH/XTC when price is high…
You could also consider ABBA (https://21shares.com/product/abba) which has 83.58% BTC and 16.42% ETH per unit, with 2.5% fees
Q1: I hold primarily those 2, with a bit of LTC. I would agree that most of the sources I read/listened mention mostly those 2.
Q2: You could take the “regular” equity approach, and assign proportions according to the market cap. Mine follow approx US-Dev-EM allocations, by chance (55-30-15).
Q3: I might rebalance max 1/year, it has been a set-and-forget for a couple now for me.
Data shows we are in a bitcoin bull run, and it will likely last several more months, so I would suggest more btc. 80/20 or similar to what @SwissTeslaBull is suggesting. I am personally 100% btc.
Edit: a good comparison point, Goldman Sachs mentioned this week that 95% to 99% of their clients discussions regarding crypto currencies are about bitcoin. You can also use that as a proxy
Interesting trade as I also want to put some money in crypto asset and I was looking about HODL | 21Shares but unfortunately, it is not possible to trade it on the IBKR platform, at least for me so I was looking to find an exemple of asset allocation recommanded by people who are already invested in this asset
The other option would be to trades with CoinShares and their CoinShares Physical Bitcoin (BTC) | Ticker: BITC | Crypto Exchange Traded Product (ETP) and their CoinShares Physical Ether (ETH) | Ticker: ETHE | Crypto Exchange Traded Product (ETP) available on IBKR. Don’t know if it is better to have crypto or ETP.
Thank you for your answers. In Hodl there is also a big part of Polkadot. Will have to look into it, if it earns to bee more weighted than Etherum.
As you explained BTC and ETH are the ones to bet as save a possible - those will be still in the race in 5 years. Other coins will have a much higher performance for sure.
BTC/USD peaked in 2017 to 20k and is now 58k.
ETH/USD peaked in 2017 to 1,4k and is now 1,8k.
Personal allocation for those 2 coins would be BTC 20-30% and ETH 70-80%. Simple because ETH is undervalued compare to BTC. Also I do expect a near pump of ETH to 2’300 very soon and then go to 3’000.
Isn’t ETH meant to not be a currency but an infrastructure (powering a decentralized computing framework), therefore more likely to be useful but also not a speculative instrument. So does it make sense to “invest” in ETH (is it like investing in electricity?)
I don’t quite get why you suggest more BTC with the reasoning that we’re in a (bullish) bullrun? Actually the whole market is quite bullish and in most of the cases that means that altcoins gain far more value compared to BTC (just have to get out at the right time lol).
I’m personally also a bitcoin maximalist after learning my lessons during the last bearmarket.
I guess you answer your own question btc brings more peace of mind.
Considering the number of positive announcements on bitcoin compared to the rest, eth included, I have much more confidence in btc and therefore I don’t need to time the market by investing there. I just DCA every week vs. Trying to find the next hot pump and dump.
From what I read recently, this year btc target is in the range of 160k-300k, that’s more than enough for me (not planning to sell anyway). I believe ETH also makes sense financially speaking, but I haven’t invested because I like the technology less, at least in the current state of development.
I would get at least 60% of BTC and the rest in ETH.
ETH might outperform BTC significantly sometimes, but I can’t see a clear long-term trend. ETH has more competition than BTC, because Bitcoin isn’t trying to do as much. I don’t think Ethereum will be replaced by something like Cardano or Solana though.
The moves to Proof of Stake that Ethereum is doing might be great for technical reasons, but those will have to proof themselves over a couple of years and add a bit of risk at this point in time and I think that makes Bitcoin the more compelling choice for companies and institutions that want to do what Microstrategy and Tesla did.
10% diverse altcoins, which I take regularly profits and put them in BTC/ETH.
BTC will not be replaced very soon. All talk just about Bitcoin. ETH as well will not be replaced very soon, as it’s the basis for many DeFi projects, NFTs etc and it’s getting better with the proof of stake and burning gas fees (EIP-1559).
Why I’m also in some altcoins? There are the easy profits. In a bull market like this, you almost cannot make any mistakes. And some allow you to stake it for quite good returns.
We might agree or not, but the most important question to me is: Do YOU STRONGLY believe in the reasons of the long term success of any of these coins?
I ask you this because if one wants to invest for the long term especially with periodical buys (like you would do with your VT ETF) you already know it will be quite a bumpy ride to say the least. So are you ready to stay the course buying the dip once all your friends and relatives will laugh at you after the end of the current exhuberance phase ?
I think I am currently around 70% BTC, 20% ETH and 10% with a mix bag of some altcoins.
Well I believe so. I know that these kind of investments have much more volatility than an all world ETF. One more reason for DCA.
What do you think about ETH staking? It seems to give high returns and the fact that the money is blocked should not scare long term investors right? I am a bit unsecure because Kraken gives such a strong WARNING saying that there is a risk that ETH2 could never happen…
Guys did you consider buying the Invesco Elwood Blockchain ETF?
Yes, it might be a good way to be forced to stay in the game long term. But it also implies some risks to keep in mind, as for instance:
The risks that are inherent to the ETH project:
–>Will they really succeed to transition to ETH 2.0?
–>If yes, it might also get delayed a lot more than you would have liked.
–>The transition might not be as seemless as expected (ex: miners getting hostile could wreak havoc the process causing a lot of short to mid term FUD on the overall project)
Risk of stacking
–>Counterparty risk if you stack your ETH via an exchange
–>Risk of slashing if you’re running your own node (you have to keep it running all the time or you might lose parts of your stack)
You might also miss a great opportunity to make good profit if we get another hyper climax run à la 2013-2017’s style at the end of the current bull market.
All in all I think the APY you’ll get is not worth the risks especially if you don’t have a lot to stack (the rate must be around 8% now if I am not mistaking. But it will decrease as more participants get in)
I’ve been in Crypto for 5 years now and (this might trigger some people in this community), currently my total wealth is 90% in cryptocurrencies, specifically in BTC. My total net worth has also 15x in the past 5 years.
Like most, I first started to diversify and have a balanced portfolio which consisted of approx. 50% BTC, 20% ETH and the rest in ‘flavour of the day’ altcoins. I’ve since then gone through a full bull market (2017) and long bear market (2017-2020) and another (on-going) bull run. I am not a day trader but am HODLING, and that’s why I have lost approx. 10 BTC by dabbling in shitcoins, of which many have lost a significant amount of their value, after peaking for very short pumps. I have since the re-allocated 95% of my crypto into BTC and keep a small ‘gambling pot’ for short term bets on low market cap altcoins, which I buy simply on speculative grounds with the intent to sell ASAP once I’ve made some short term profit. I got lucky a couple of weeks ago with Doge and BNB but this has really nothing to do with smart investing but is (at least in my case) purely gambling.
So with regards to your question, I would allocate the majority of your funds in BTC. With the recent inflow of serious institutional money (Guggenheim, Tesla, Microstrategy), Goldman Sachs filing for a BTC ETF, JP Morgan offering BTC custody for their wealthy clients etc. I think that BTC (and only BTC) has reached ‘escape velocity’ and is now significantly lower risk than it was even 2 years ago. I intend to hold the large majority of my BTC (and ONLY BTC) at least until the next halving +1 year, if not longer.
ETH offers some really interesting opportunities, especially with NFTs becoming a real thing which, in my opinion, is here to stay. But I have a hard time seeing how ETH will outperform BTC in the long run (or even short run), and I have moved all my ETH to BTC.
Another category of tokens which I think have the potential to outperform BTC in the short term are DeFi - related tokens like PolkaDot, UniSwap, DefiChain, etc. In the long run though I think that all of these will go the path of the altcoins in 2017 - i.e. they will disappear.
Periodic rebalancing between BTC and ETH doesn’t seem to be a great strategy. I’m not a trader but those who trade think that there’s no significant correlation to be exploited. If BTC goes up, so will ETH but at a lower rate, especially as the hype around BTC gets stronger. If BTC goes down, there’s little reason for ETH to go up in the short term. In the long run, I think that ETH is the only other coin that has a good chance to stay (especially if the transfer to proof of stake and ETH 2.0 is successful) so it’s probably not a terrible idea to have some percentage of a portfolio in ETH. But it remains a diversification and it might underperform compared to BTC, especially in the next 2-3 months.
also: not your keys, not your coins. The APY’s are tempting but I’d rather remove one additional risk factor (exchange/platform) risk in a already quite risky environment (the cryptospace in general).
I disagree. ETHBTC chart is not a straight descending line. It goes up and down, and I look at higher time frames. I do not rebalance between the two, I just buy and hold proportionally (65%/25% right now). Having almost no exposure to ETH is IMHO a missed opportunity.
Yes, BTC is the catcher of the newbies (retail & institutional), but soon they learn about the cryptos, they start to look to the other ones - and ETH is the first to jump at your neck and strangles you until you buy.
Yes, my statement was certainly to general. I think what I meant to say is that for the next 6-10 months I don’t see ETH outperforming BTC. But I agree that, in general, it’s certainly not a terrible idea to have your second largest long-term position in ETH and if you’re somebody who follows charts on a daily basis (or more frequent) there can be good profits in ETHBTC. I just never managed to understand the correlation and make some good trades with that pair…