Position Restructuring
Bitcoin vs. Ethereum
- A Bitcoin-heavy portfolio is probably a winning portfolio
- I am reducing my exposure to Ethereum and Eth-based tokens
- Except for Polygon / MATIC
- Ultimately, I believe my crypto portfolio will not have any Ethereum at all after the next year if the SEC continues on the path it’s on
- The Layer 0 (or Layer 1) projects I am focused on are: Polkadot, Cosmos, Algorand, and Avalanche
Logic behind this portfolio structure:
- After the FTX bankruptcy, I’m assuming the SEC will be cracking down hard on crypto projects, forcing many developers to register their tokens as securities
- The SEC has already made it clear that Bitcoin is a commodity – not a security because it lacks any centralized authority steering the direction of the development of the product
- Ethereum and Eth Tokens are hot on the SEC’s watchlist for regulation precisely because they’re very centralized and have staff that determine the future of the products
- This is why my Eth position is so small; however, my Polygon position is significantly larger as a hedge on Eth since it is a Layer 2 Ethereum protocol
- Polkadot, on the other hand, is in the process of being recognized as a software instead of a security from a legal perspective – which should theoretically place it in the same category as Bitcoin
- Once this decision is solidified and codified by the SEC, it’s likely I will restructure my positions again and possibly eliminate Eth and Eth Tokens to expand my Polkadot and Bitcoin positions.
Charts
My thesis going into the winter months is as follows:
- There should be one more leg down across crypto markets – I believe this should be bottom for the cycle, barring another black swan event
- Bitcoin: $14k range
- Polkadot: $4 range
- Chainlink: low-$5 range
- Polygon: 50-cent range
- Algorand: 19-cent range
- It’s also possible we get some good news related to the SEC or FTX and markets react favorably
- This is why I am dollar cost averaging into these positions instead of going all-in
Bitcoin / $BTC
- Don’t be fooled by the higher-lows just yet on the lower time frames
- Price is getting squeezed lower between resistance and support
- Price lows are working their way towards the $14k range
Polkadot / $DOT
- Polkadot is still snaking through the downtrend
- I will consider adding more to my position if price dips below $5 – until then, it’s just accumulation and I’ve finished building this position
Chainlink / $LINK
- Chainlink has been one of the few token that has not been in a consistent downtrend since June
- I am adding to my position in the lower band of the parallel channel
Polygon / $MATIC
- Although Matic has been snaking through a parallel channel since July (similar to Chainlink), it’s still operating in an overall downtrend since Nov. 2021
- Despite Matic’s recent performance, I believe there is still a lot of room to the downside before we see a bull run
Algorand / $ALGO
- Algorand flipped support to resistance in a bearish breakdown we anticipated a week ago.
- Next support line is at ~19 cents when price breaks down from the bear flag