Bostoncoin update April-May 2022
It is a mixed news month. Russia is still unwelcome in Ukraine, US sanctions are increasing, higher interest rates are threatening to stifle the economy and everybody’s least favourite spaceman, Elon Musk, is taking over Twitter.
Markets seem to be plunging as investors fear that higher interest rates will collapse stock prices and hobble an economy that is still trying to get back on track after two years of lockdown.
When everyone seems to be panicking, this is the most opportune time to look around and see what is really going on. It is also often a time to do the opposite of what everyone else is doing.
Tech stocks in the USA have already dropped 15-20%, and some commentators claim they are poised to drop another 30-50% in coming months. If we zoom out on the charts, you will be able to see that “Mister Market” is a bipolar critter: either irrationally pessimistic or irrationally exuberant.
It seems like a lifetime, but it was only two years ago when COVID19 fears saw some investors sell off their Nasdaq stocks at a 40% loss. Those who bought the dip, or held on, saw a 230% gain as we slowly realised that masks and lockdowns were not the end of the world.
In early 2020, when the Nasdaq dropped 40% on fears (“the sky is falling”), Bitcoin prices similarly dropped around 44%, only to later go on to rise over 1047% as the pandemic wore on.
With the benefit of hindsight, we all know that we should have been buying when everyone else was panicking; and buying more crypto, as it clearly outperformed stocks by 4:1.
As markets again enter the “fear” and “panic” cycle, you already know what you have to do. It may seem counterintuitive, but history has proven that doing the opposite to the general public has worked out far better than following the herd.
The Boston Trading team have a few grey hairs and most of us have 20-40 years’ experience in financial markets. We have 7+ years in crypto markets, at the coalface, doing the math. We are going to go out on a limb (because that is where the fruit is!) and make a very bold claim:
If you have your toe in the water, it is time to dive in deep. If your friends are circling around the edges, it is time to encourage them, entice them, coerce them and do everything you can (just don’t push them!)
Markets are down, yes, but they will recover as they always do. Wars will end, as they always have. Loose monetary policy will be tightened and life will go on. The stock prices will recover and stocks, as well as crypto, will reach new highs.
Right now, there is one major difference that has not occurred before, and this makes us feel bolder than we ever have in the past seven years of crypto. The vast majority of countries are drafting new crypto legislation.
Whether it be the countries who recognise Bitcoin as legal tender, the countries launching their own stablecoins or digital dollars, or countries issuing new laws to regulate crypto and crypto advice like the stock market, crypto is coming to every city and every town.
When we first started investing in crypto in 2015, it was seen as a fringe asset, traded by a few nerds. In the past year or two, we have seen crypto accelerate into the mainstream, and become adopted by many major banks and financial institutions. What you may not realise is that it is still early days for the crypto-curious!
Despite dozens of banks and fund managers now pouring billions into crypto markets, around 80% of their Wall Street peers are still not diving in. The reluctant fund managers would never admit the thing holding them back is fear; they claim the more socially-acceptable excuse: “lack of regulation”.
There was zero crypto regulation in 2009, nor in 2012, 2015, nor 2017 and very little in 2020, but in these years, brave souls still made fortunes both small and large.
We predict that the moment crypto legislation is signed, the tsunami of funds flowing into crypto will dwarf everything that has come before it.
It may seem crazy to forecast $100 000 per Bitcoin when we have seen it twice drop from $60k down to mid-$30 000 levels, so please save this email, bookmark this page and come back in two years. If Bitcoin does not exceed $100 000 by 30 June 2024, we will buy you a Coke, and you can call us crazy.
Yes, there will be volatility along the way. Tesla stock did not hit over $1000 without a few falls of 30-40% along the way. Apple stock broke clear of $100 during the pandemic, but Apple stock also dropped by 50% the year after they released the iPhone 3.
Quick dips are like potholes: if you focus on the dips instead of the destination, you will crash. Keep your head up, keep your goals clear, and remember to tell your friends: get in before regulations come. Big players such as ANZ bank, Commbank, Goldman Sachs, JP Morgan, Blackrock, Fidelity and others are already in. Once the road is paved clear for the rest of Wall Street, it may be too late for you and your friends to buy crypto at the old prices.
What are we up to?
Aside from positioning ourselves for the incoming waves of cash from Wall Street, we are still aiming to “take the bite out of Bitcoin” with our diversification strategies.
With Bitcoin dropping around 10% for the month and behind 25% for the past year, most altcoins have been dragged down as well.
The Bostoncoin portfolio (BOS) is down 8.88% for the month and DARTcoin is down 5.91%. (POLLYcoin is always static at $1, paying 5% yield with no volatility). We have made a few small strategic changes to BOS and DART but nothing major, as our long-term outlook is aligned for value.
Despite drops in a few assets, we see strong signs of support at current prices. Lower limits have been tested a few times and always met with strong buying inflow, so we see no reason to exit positions where we are already in profit and poised for more gains.
Despite recent dips we are still up on many coins for the year, including,
in the Bostoncoin portfolio:
CRO up 226%
AXI up 411%
SAND up 484%
LUNA up 598%
GALA up 975%
At April 29 2022
BOS NAV 152.31374
BOS Price 167.545114
MOM (-) 8.88%
YOY (-) 29.19%
2yr return: 567.91% (283.96% pa avg)
3yr return: 540.87% (180.29% pa avg)
For the new DARTcoin:
RUNE up 157%
MATIC up 344%
At April 29 2022
DART NAV 275.708636
DART price 303.279499
MOM (-) 5.91%
YOY up 322.34%
Nobody can predict when the draft crypto legislation will be finalised, as governments tend to move more slowly than standard businesses. We anticipate crypto regulation may be as soon as the next six months in some developed countries, but even if this is delayed, do not delay yourself, and advise your friends that there has never been a better time than right now. Like stocks, the best time to get into crypto, is before the governments and billionaire hedge funds pile in.
and now it’s time for a catchy tune, to remind you to get your friends in:
PS – stay tuned for some very exciting news that our lawyers say we are not allowed to tell you just yet. We promise it will be a game-changer for the world of crypto and managed funds/mutual funds. We hope to be able to tell you in the next 10 days, or by month-end at latest. See you soon.
PPS — got a moment? Please rate us on TrustPilot to say how happy you are, tell your friends and keep the fledgling crypto community safe.