Post
Topic
Board Altcoin Discussion
Re: rpietila Altcoin Observer
by
smooth
on 11/07/2014, 05:57:43 UTC

   bitcoin market cap         = $8.033 billion
   total crypto market cap  =  $8.571 billion

Bitcoin represents 94% of the crypto market cap.  So, if you think bitcoin will appreciate at a faster rate on average than alt-coins in aggregate, then you should allocate less than 6% of your crypto portfolio to the alts.  If you think alt-coins will eat into bitcoin's % market share, then you should allocate more than 6%.  If you think you can pick a winning coin, then of the % you have decided to allocate to alts, you should invest more heavily in those you think will be "winners."

By this logic a "neutral" allocation would be 99.9% in fiat (denominated assets). By choosing bitcoin at much more than 0.1% of your assets you are already actively managing. A lot.

Also, I'm not sure whether the better measure is the eventual supply or the current circulation. That doesn't change the picture for bitcoin much (somewhat over 50% of eventual supply is already released), but definitely changes the relative position of many alts (in both directions).