et’s face it: 2021 was a rough year, possibly even rougher than 2020. The pandemic continued, stock markets were choppy, businesses faced multiple closures, employees had multiple lockdowns, family members were quarantined and separated. We all missed loved ones and missed out on many special occasions.
For the year that was 2020, worldwide COVID cases were an unprecedented 83 million. For 2021, the cases rose to a staggering 274 million.
The 2021 year started in the first week of January with civil-war-like riots in the USA, between people who respected the electoral process and those who believed the election was stolen, and it did not get much better from there. (Those same rioting people also believed that Oprah was a hologram and JFK was coming back from the dead at a Rolling Stones concert, so judge them as harshly as you wish.)
The S&P500 US stock market index was up around 29% for the year, with Australia trailing behind at around 14%. This may sound good, until you adjust for “true inflation” (not the government “official figures”) and the incredible amount of stimulus cheques and fiat cash printing.
On average, the US Fed has printed $4 Trillion per year since 1969. This increased after the 2008 GFC to around $10 Trillion, and in 2021, to over $21 Trillion. The USA’s M2 fiat cash supply increased by over 37.5% in two years since the start of the pandemic in 2020, with many other countries following similar lines.
It is hardly surprising to see a corresponding 30-40% rise in the prices of property, stocks and other assets, when there is around 40% more cash sloshing around in the system. If we adjusted for cash printing and inflation, stock markets are close to negative for 2020 and 2021, with property prices basically stagnant. But luckily, we have crypto…
Has it all been rosy in Cryptopia?
Cryptocurrency is a small sub-section of the world economy, and just like any other section of the market, crypto can be affected by global macroeconomic events as well as market sentiment. Fear, greed, FOMO, panic and other emotions can make massive spikes and troughs in any asset class, and crypto is no exception.
At the start of the pandemic in 2020, practically all markets panicked, and Bitcoin dropped 60%. (Due to its diversification, Bostoncoin rose 50%). When central bankers started their familiar trick of printing cash, this lead to fears of hyperinflation, and BTC rose around 400% from its lows.
More financial institutions started to jump onto the crypto bandwagon in 2021, and popular crypto exchange Coinbase listed its IPO. By mid-2021, Bitcoin was adopted as the national currency of El Salvador, and had reached a price almost 850% higher than where it had been at the start of 2020.
After such a huge climb, there were bound to be some pullbacks, and prices dropped again by around 50% at the start of the third quarter, before slowly climbing back up again.
Yet even this rise was temporary, as prices dropped again upon the emergence of a new disease variant. The old stock market adage holds true: “elevator down, stairs up.” Sometimes the drops can be very rapid, and markets take a while to recover.
It is important not to panic when the world seems to be losing their minds. The patient and prudent are usually rewarded. You just have to keep your faith in fundamentals. No matter how many outbreaks, lockdowns, furloughs or closures occur, no matter how much cash is printed by central banks, one thing remains constant: there will only ever be a maximum of 21 million Bitcoin.
The US Fed can print another $20 Trillion, or $50 Trillion or $100 Trillion, as can any other central bank in the world. Prices of goods and services (as measured in dollar terms) will generally increase by around the same amount. We are not the first generation to see hyperinflation, and, so long as fiat cash is unbacked by scarce commodities, we will not be the last.
Volatility in crypto is always going to be there, just as it is in stock markets and other markets. It is important to zoom out on the charts, and focus on long-term trends, rather than seeing short-term movements and daily news.
The price of Bitcoin did indeed fall 50% in July 2021, but by the end of 2021, the price was still around 700% higher than the start of 2020. Stay strong and HODL.
How are we doing?
Whilst crypto prices seemed turbulent, there seemed to be a lot more ups than downs, if you knew where to look.
Our early investment in Crypto.com (CRO token) paid off to the tune of over 700%. We made over 1 000% with LivePeer, and we are up over 9 000% on Celsius. Our investment into XYO is outperforming almost everything, with over 13 000% gains for the year.
Obviously, not everything can have five-figure gains; that is the whole point of diversification. Something that is up 10 000% today can easily drop 50-90% tomorrow, because, as we all know, crypto is volatile.
The Bostoncoin team balance the portfolio, and know that today’s winner could face a significant loss tomorrow. We also know that a coin that has trailed behind for a while can easily emerge as a winner when others fall.
This was almost certainly the case with Solana, which sat flat for almost two years after we first bought it. Then, with downturns in market favourites Ethereum and XRP, Solana suddenly surged up over 1200%.
Many old-school investors will suggest that gold is an important part of a stock portfolio, as the ancient asset performs well when everything else turns to glop. We at Bostoncoin aim to always hold defensive positions. These conservative plays will sometimes drag the average down when markets are at maximum greed, but when the market hits maximum fear, we are still safe.
OK, so what’s with all the “300” pictures?
Those who have been readers and investors for a while, will know that we generally feature half a dozen puppy pictures, and an overall upbeat theme for the monthly updates.
We have done a “Star Wars” theme to honour the rebellious nature of crypto versus the empire of central banks, we covered “The Avengers” and the importance of having a supportive team. We did a “spooky” theme for Halloween, a superhero theme for superannuation news, and even a “cowboy” theme showing that crypto was an unregulated “wild west”.
(If you missed any of these newsletters, they are still worth a read. Check them out on the blog section of the website, and share them with a friend who needs to know more about crypto. The performance reports will obviously have changed as the months moved on, but the knowledge, education and general advice is timeless. We still give away great rewards and swag for those who bring in a new subscriber or investor.)
This month we chose to go with a slightly more controversial theme, and focus on “300”. Yes, the 2007 action movie was quite bloody and gory (as we guess life must have been for the ancient Spartans), but there is so much more to the movie than meets the eye.
The plot is about a small group of 300 determined warriors facing off against over 300 000 foes, in an epic struggle. What most people do not know, is that art imitates life, in Hollywood as well as in Sparta.
The movie was actually a very low-budget affair, by Hollywood standards. Whilst some heroic action movies cost over $400 million to make, “300” was shot for around $60 million, using a small cast and a lot of green-screen rather than location shoots.
If you care to go back and watch the movie again, you may notice that a lot of the enemy fighters wore some kind of mask; this is because the ‘enemy’ in the next scene was usually the same actor who played a Spartan warrior in the previous scene. By ‘recycling’ the same actors into many different roles, the producers saved a fortune in costs.
In an era where a $100 million-dollar movie can easily lose a fortune at the box office, “300” turned its $60 million investment into around $460 million in worldwide takings. This represents a return on investment of over 750%, versus something like the final “Avengers” movie (one of the most expensive films ever made), which only saw a return of around 600%, for much greater risk.
Obviously, our mascot is a puppy, so we love a good story about an underdog; Spartan or otherwise. We also wanted to draw attention to the performance that Bostoncoin investors gained during a quite tumultuous year: a little over 300%.
The Bostoncoin portfolio has also averaged 366% per year for the four years since 2018, which is a remarkable achievement; one that is unmatched by any other crypto fund in the world.
(For a broader comparison, the Aussie ASX200 only averaged 43%pa for the last three years, and the USA’s SP500 averaged 56%pa since 2018.)
Tell your friends three important things:
- your Bostoncoin fund is a quiet and consistent achiever, with an unmatched and world-beating track record
- the “300” movie is worth another watch, now that you know its secrets, and
- we look forward to more great returns for the next few years
As we venture into 2022, and hopefully put the pandemic behind us, Bostoncoin will be launching new funds, new products, and new ways to make it easier for you and your friends to invest your retirement money. In addition to giving world-beating returns for individual investors, Bostoncoin will be coming soon to SMSF’s, as well as 401K’s, Roth IRA’s, SDRA’s and more. Imagine how much greater your retirement years will be, if you can average 100-300% per year, rather than 40-50%. Something to think about…
Until next month, stay strong, stay healthy: body and mind. Sometimes, with pandemics, choppy markets and global chaos, it may seem like you are facing the entire Persian army, but know that this little puppy has your back
JB
As at 31/12/2021
BOS NAV 240.206402
BOS Price 264.227042
MOM (-)24.10%
YOY up 314.50%
