Developing your own Active Crypto Portfolio Index
When I first heard about Iconomi's idea to create a portfolio, ICNX -an ETF tracking a basket of cryptos, I was excited.This was it! A great way to get diverse exposure to crypto as a whole. They would balance it and I could sit back and for a relatively small fee.. have a fully diversified portfolio.However as a trader and investor, I thought I could do better, so recently I've taken the steps to develop my own portfolio based on the top 30 crypto's and the ICNX ETF.
What if I could combine a little technical analysis to time the entries better?
What if I could throw in some fundamental analysis to hold onto winners longer instead of 'rebalancing' them based on arbitrary % criteria?
What if I could throw in a little Warren Buffet style value analysis?
So I began my journey...
This is largely an exercise in filtering. I have a basket of coins to look at with a few rules to seperate the wheat from the chaff. Let's take it from the top, I'm looking at the top 30 market cap crypto's and the ICNX selection.Out of these I need to filter down, I'm looking for trends and coins that are 'relatively' undervalued. The first thing I'll look at is the context of the market, browsing through each chart. Is it trending, ranging or reversing?
The initial browse begins...
I had a look at the charts of my potential basket of coins. I picked the ones that had the context of a trending market and discarded the rest. I decided to limit the investments to 10.
Here's what I came up with...
This was a very quick, largely technical analysis. I threw a couple other coins in there as I had been looking at them for a while but it was mainly just the story the charts told.I put in a hypothetical 1 BTC into 10 coins back on the 23rd April. The website I'm using is Crypto Compare.A very useful feature in Crypto Compare is the ability to create multiple, real-time updated portfolios, along with a whole raft of simple analytical tools.
Performance in BTC
We're looking at one of the most insane rallies in crypto in this time period. So it should be taken with a pinch of salt. It's all about your initial basket of crypto you look at and how you filter them down. Also this is a relatively crude method to develop a crypto-folio. Does anyone use a similar approach?There are many approaches to filtering, you can have a good grasp of the fundamentals of the coin, you can trade the relative Net Asset Value of a basket of coins that hold ETH and may lag the recent bullish ETH moves.
Conclusion
This is a basic example of a first step anyone can take to develop their own portfolios and keep on top of things, in the future I'll go into more detail with other filtering techniques and methods that I use to actively manage my risk and exposure to the crypto markets.
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Images from Pixabay and Cryptocompare