Love this thread. Way more thought here than most.
Within the context of a pure-crypto portfolio (safer assets being outside this scope), how do you feel about utilizing a small allocation (10% or less) of BTC similar to bonds in an aggressive stock portfolio?
Bitcoin doesn't have the same inverse relationship with alts that bonds have with stocks (i.e. if BTC drops, alts tend to tank too), but when alts drop on their own, one might reasonably expect BTC to perform better as a safer haven.
Perform the usual rebalancing during ups/downs, etc.
In your portfolio, LTC seems to be playing a middle ground (I like your heavy allocation). Likely to be the most stable coin, but also with adequate growth potential (the irony of all this being that 2-25x is considered "adequate"). Is it fair to say this is your "bond" allocation? Is that even a valid concept worth pursuing within this space?
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Additionally, what are your thoughts on Ripple (XRP) as both a potential blue chip and as serving in a bond-like, stabilizer role?
I don't know that it hits your growth targets. 250x growth would give it a long-term market cap of 6.25T (there's like a 2000:1 ratio of XRP:LTC supply right now). Now, an apologist would point out that it's got serious devs and is aimed at the ~37T inter-banking market. Fair, but that relies on enterprise adoption vs consumer fomo. Serious influx of capital if it happens, but you have to convince BofA vs Joe Investor. May be a long-term play, but probably not for your 1-year term?
On the flip side, it's largely ignored the recent alt decline and more-or-less tracks BTC (or just moves sideways). Devs hold like 60% of the supply, which sounds like it's meant to hedge against the volatility that would scare corporate customers away from normal crypto (but again, potentially fails your requirements).
Is it weird (stupid?) to consider an alt (or BTC) as a base for storing/hedging value (possibly over growth)? Is the marginal chance of return worth leveraging over fiat?
Glad you like the thread!
BTC certainly ends up acting like a bank, especially if youre trading more actively with that youve [almost] always got something in BTC. Its the most conservative of all crypto to be sure, but instead of comparing it to bonds, Id compare it more with the likes of what IBM is to stocks.
LTC is a good middle ground crypto as you say. Good appreciation potential, and the same security, if not even better. Theres no reason why LTC shouldnt trade at its 4:1 ratio with BTC . . . which would be $633 at todays BTC price. And soon LTC will not only be just as solid on the safe storage side of things, but it will also be much more useful in a real world setting.
To be honest, I dont understand Ripple. Its so outside of what is decentralized and widely distributed that it has me scratching my head. Seriously, its a different beast that I havent studied, and I dont like getting involved in things I dont understand. I think valuation will be a more a function of business success though, as an intermediary, than as a cryptocurrency.
With respect to your last question, as BTC relates to fiat, it is DEFINITELY a GREAT hedge long term! That is what the basic crypto ethos is all about: hedging against fiat debasement (which we know is guaranteed for the foreseeable future). I would have just as much crypto in my traditional portfolio as gold, if I had gold (my gold is real estate and productive assets), but seriously, in terms of what your liquid portfolio looks like, crypto is a perfect fit - with its current phenomenal appreciation potential, even better than gold - for that fiat hedge.
Theres a nice info-graphic putting current crypto to total world money supply into perspective here:
https://steemit.com/crypto/@cryptographic/crypto-boom-part-1-keeping-perspective Its a proven product that works that has gained wide scale acceptance and that is still in its infancy, a hedge that also serves as one of the best long term speculative investments weve ever seen, thats what crypto is IMHO.