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The experiment was to see if the book would come true.
In the book, I suggested that if everyday investors held a small percentage of bitcoin and altcoins in their portfolio (between 2 and 10 percent), they would see much better returns than investors who invested only in stocks and bonds.
It was easy to show this was true for the past: bitcoin had historically blown away the stock market. But past performance is no guarantee of future results, as Fidelity constantly reminds us. Would my prediction hold true in the future?
Since last fall, we have been diligently tracking the results of our “Blockchain Believers Portfolio,” and the one-year returns are finally in.
Buying just a little bit of blockchain (10%) has doubled the returns over a traditional investment portfolio. The book has come true. |
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By itself, the stock market has remained flat over the last year, which is why so many analysts are worried about the state of the U.S. economy. $10,000 invested in the stock market on 9/1/18 would be worth about $10,000 on 9/1/19 (click for chart): |
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Compare this chart with the overall bond market, which is steadily on the rise. Investors who held a “plain vanilla” portfolio of stocks and bonds would have seen an increase, solely because of the rising price of bonds (click for chart): |
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Since rising bond prices are often caused by jittery investors, this can be a sign that a recession is coming. But is it?
In Case of Recession, Don’t Panic
One theory is that as investors grow increasingly nervous about a worldwide recession, they will start to flee to “safe havens” – including, possibly, digital assets. Just as investors buy gold during a recession, the thinking goes, they will also buy “digital gold” in the form of bitcoin, driving up the price.
On one hand, the price of bitcoin is much more volatile than the price of gold, so the comparison is not quite accurate. On the other hand, bitcoin may offer the safety of gold (it’s not heavily correlated with the stock market) with the speculative properties of a new asset.
In other words, this may already be happening. |
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Summary of One-Year Returns - “Non Believers” who invested 65%/35% in stocks/bonds saw a 2.1% increase;
- “Baby Believers” who invested 65% in stocks, 32.5% in bonds, and 2.5% in bitcoin saw a 3.5% increase;
- “Big Believers” who invested 65% in stocks, 25% in bonds, and 10% in the top 3 altcoins saw a 4.5% increase.
- All three portfolios assume you are socking away $100 each month, a strategy we call “steady drip investing.”
- The full investing strategy here.
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As Publishers Weekly recently summarized in their review of BLOCKCHAIN FOR EVERYONE:
Discussing incorporating the practice into one’s investment portfolio without risking everything, [Hargrave] talks about what the upper limits of the cryptocurrency boom might be, including the rise, fall, and rise that have already happened. His larger goal—encouraging more people to invest in bitcoin so the industry can grow more sustainably than in the past—is laudable.
They said it better than I could: As more people invest in bitcoin, the industry will grow more sustainably.
To which I will add: As more people invest in bitcoin, their personal wealth has already grown more sustainably.
The book has come true.
Health, wealth, and happiness, |
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Sir John Hargrave Blockchain investor since 2013 Publisher, Bitcoin Market Journal |
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There are literally hundreds of cryptocurrency exchanges from which to choose. Some are huge, like Binance, and others are much smaller. With so many exchanges and so many differences in how they operate, we have a question that we think crosses every trader's mind.
How do you decide which crypto exchange to use?
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One of the sticking points for many of our readers is that mass adoption of cryptocurrencies is still not a reality. Last week, we wondered what our readers think is the biggest reason for the delay in adoption. Here's what you said. |
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| | Notable Pieces from Bitcoin Market Journal |
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How to Build a Blockchain Portfolio as an Equity Investor (With Examples)
Blockchain investing comes in many forms. You could: - Invest in the digital tokens of the most promising blockchain project.
- Participate in equity or token-based crowdfunding campaigns of new blockchain startups.
- Purchase shares in publicly-traded blockchain stocks.
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To Crypto Stake or Not to Stake: The Hodler’s Essential Question
How would you like to earn a 67 percent return just for letting your altcoin sit for a year? Sound too risky? Okay, how about 25.9 percent? So what’s the catch? Is staking a no-brainer investment vehicle for the average hodler? On the surface, the answers are complicated, but a basic understanding of altcoin staking makes the decision simpler. Learn more about altcoin staking in this guide from BMJ author Adam Carpenter. |
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| | Blockchain Hot Topics from the Web
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According to a popular cryptocurrency analyst, the price of bitcoin is set to explode when it finally passes the $14,000 mark again. On June 26, bitcoin reached a few hundred dollars short of $14,000, and the price has been bouncing between lower highs and support in the mid-$9,000s since. Many popular traders, therefore, identify $14,000 as the last major point of resistance before the December 2017 all-time high.
Binance is breaking into the futures market following the acquisition of a little-known derivatives platform. The world’s largest cryptocurrency exchange announced on Monday that it has acquired JEX, an exchange based in Seychelles. As part of the deal, JEX will be rebranded as Binance JEX and will offer derivatives products, including futures, options, and perpetual contracts, according to a press release. |
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