Black Sheep Crypto Fund: Portfolio & Strategy for 2020–2021/22 Bull Run
This is the Black Sheep Crypto full investment fund layout and strategy for the 2020–2021/22 cryptocurrency bull run. If you are looking for day trading advice, this is not it. This strategy is a long-term plan, essentially a “buy and hodl” guide, with certain price targets for selling portions of the stack. However, the aim of this strategy is to make money (both in fiat and BTC), mainly by riding the Bitcoin/altcoin price cycles.
Let’s start by naming some of the reasons why we’re certain the new bull run has already started.
- Macroeconomic situation (mainly quantitative easing, near-zero or negative interest rates)
- 3rd BTC halving in May 2020
- BTC’s quick recovery and subsequent rise after “Black Thursday” in March 2020
- Companies starting to buy and hold Bitcoin
- Different price models prognosing a bullrun, such as the S2FX model by PlanB or the Rainbow chart
- Number of BTC addresses with a non-zero balance making new all time highs
- Amount of Bitcoin stored on exchanges has dropped significantly for months — indicating a strong HODL sentiment
We expect for the top of the bullrun to arrive some time either in the 2nd half of 2021 or 1st half of 2022. For how we intend to determine the actual top of the market, stay tuned for next articles in this series. In the best case scenario, we will have liquidated approx. 80–90% of our portfolio by the top, with the intention of also buying back after the market corrects. How we will approach the buying back part is yet to be decided.
Please do note that this article contains referral links. Using these referral links will not cost you anything, but makes it more worthwhile for us to share our strategies and ideas with the world. In some cases, the referral links also entitle you to bonuses if you fulfill certain requirements (more info on the websites of each of these services). Always remember to DYOR (Do Your Own Research) when trusting any company or any platform with your money.
We at Black Sheep Crypto chose to collectively invest a lump sum of $10,000 USD. We made the lump purchases for the chosen coins on 15 September 2020. However, a strategy of DCA’ing (Dollar Cost Averaging) would also be feasible to re-enact our allocation. If you are making $1000 USD per week and manage to DCA $250 into cryptocurrencies every week, you would have invested $10k within about 10 months.
The Portfolio and Price Targets
Our Full Portfolio ($10,000) consists of 4 sub-portfolios — the Main Portfolio, the Alt Portfolio, Moonshot Portfolio #1 and Moonshot Portfolio #2.
Main Portfolio — 80% of Full Portfolio ($8000)
The main reason we left BTC allocation relatively low is because during bull markets altcoins appreciate faster and during bear markets they also depreciate faster. Since we are in the beginning of a bull market, BTC is still relatively expensive compared to alts and conversely, alts relatively cheap. At the same time, we still want to be mostly in Bitcoin, as it truly is the king of cryptocurrencies with the longest chain, largest network effect, most decentralized network, is the most widely accepted cryptocurrency, etc. We believe that when so-called Phase 5 truly begins, then nation states will start buying Bitcoin (probably mostly as a reserve asset) and that it will be BTC and only BTC that the governments start hoarding, possibly punching BTC dominance to new all time highs, at least for a while. Thus, we keep BTC as our main asset with the largest allocation, but we won’t be using a BTC-only approach.
Litecoin is the OG altcoin that the altcoiner noobs love to hate. Being very similar to BTC, it shares most of it’s advantages as well as disadvantages. Why did we allocate such a large percentage to it? We find its utility in being a payments coin for small to medium transactions, as well as one of the cheapest methods to move coins from one exchange to another. Unlike Bitcoin’s hard forks, which have taken an aggressive stance towards the original chain, Litecoin intends to be a companion to BTC, rather than a competitor. Since it has a different algorithm than Bitcoin, it is a relatively safe network to store value on. Also the MimbleWimble update that is in the works promises to further enhance LTC’s value proposition. LTC has been hovering at historically low BTC ratios since the halving pump of 2019 (read: there is a lot of potential upside), thus we decided to move a larger amount of money in here compared to Ethereum or Monero.
The world computer. The engine for tons of different DeFi and DEX projects. Of course we are bullish on ETH.
XMR — 10% ($800) — buy at Kraken
As the primary choice of privacy-minded cryptocurrency enthusiasts, we expect XMR to perform well in the long run.
Then we have the “Alt Portfolio” which consists of 3 established TOP 100 coins by marketcap, as well as 2 different “moonshot” portfolios for small marketcap altcoins which could potentially yield large returns while also obviously being a lot riskier bets.
Alt Portfolio — 8% of Full Portfolio ($800)
Moonshot Portfolio #1–7% of Full Portfolio ($840)
STA — 50% ($350)-buy at Uniswap
LBA — 15% ($105)- update November 2020: can be considered a loss and a failed project due to the bankruptcy of the coin’s creators, crypto lending firm Cred: https://www.coindesk.com/bad-loans-bad-bets-bad-blood-how-crypto-lender-cred-really-went-bankrupt
Moonshot Portfolio #2–5% of Full Portfolio ($500)
COM — 25% ($125)-buy at Uniswap
RNDR — 25% ($125)-buy at Uniswap
VIDT — 25% ($125)-buy at Uniswap
For selling we have set different price targets for each coin and allocated a percentage to sell at each price. With the main portfolio, when any of the target prices is reached, we stay on the lookout for a sharp price pullback within 7 days of selling and will purchase back with the whole payout from the sale if the price of the coin tumbles 10% or more within that week. Also, we will never sell more than 90% of our holdings from the Main Portfolio, since these 4 coins are what we intend to stack and hodl forever. With the other portfolios, we do not buy back coins after price pullbacks and we are ready to sell 100% of the coins when appropriate price levels have been reached. Of course, this does not mean we will not consider buying them back during the following bear market.
We will not be selling any of the coins if USD or EUR is experiencing 10% or more monthly inflation while we hit the price targets as this would most likely mean that the complete meltdown of the legacy financial system has already begun and Bitcoin will have won.
You may look at these price targets and label them unreasonably bullish. Yes, we are megabullish as we truly do believe in Bitcoin’s superiority to any other currency or financial asset out there. But also, we don’t fully expect for all the coins to hit all the targets. Our selling points have been set for what we believe could potentially be the approximate range for the next all-time high for these coins. For our larger allocations we approached setting the selling points more conservatively (for example, we don’t really expect the next BTC all time high to be in the 25–50k range, but rather 100k-500k range), while with the smaller positions we will be waiting for higher % yields before selling. Even if we just hit the 1st price target for each coin, we will have made $8964 of our initial $10k investment back and still be holding the vast majority of the coins we bought. If we hit about 50% of our price targets, we will have sold over $54,000 worth of coins and still be sitting on some. If, by some chance, we hit all our price targets then we will have made over $359,000 and still be hodling small amounts of BTC, LTC, ETH as well as XMR.
Stay tuned for updates about this fund as well as our other trades and guides for cryptocurrency newbies and veterans alike.
November 2020: Crypto lender Cred files for bankruptcy. The LBA token in our Moonshots #1 can now be considered worthless as it is effectively Cred’s token. Moreover, since the LBA tokens in our fund were held in the Cred program by one of our team members (who also lost considerable amounts of BTC and LTC by Cred’s demise), we are unable to access them to sell them for another coin and we don’t know if we will actually ever get anything back from the program. From our perspective, the coins can be considered fully lost. The old “not your keys not your coins” lesson in action. However, it was a risk that we knowingly took (hence the “moonshot” name in the portfolio) and as it represented just 1.05% of our whole fund, not really a considerable loss. If you are willing to take the risk of trusting some of your coins with a 3rd party for interest payments, we believe the best platform to do it as of now is BlockFi.
3 January 2021: The total value of our portfolio exceeds 20k USD for the first time. Add in the $1185 that we already cashed out when BTC hit $25k and we are looking at a ROI of 111.85% in about 3.5 months.
3 February 2021: ETH 1st sell target ($1500) reached, liquidated 0.652 ETH (20% of holdings) @ $1536/ETH for $1001.
19 February 2021: BTC 2nd sell target ($50k) reached, liquidated 0.0444 BTC (12% of holdings) @ $52,769/BTC for $2342.
23 February 2021: BTC dips, bought back 0.0506 BTC for the $2342 from the last sell order @ $46,225/BTC.
27 February 2021: SWAP 1st sell target ($4) reached, liquidated 41.5 SWAP (25% of holdings) at $4.23/SWAP for $175.
10 March 2021: CHR 1st sell target ($0.2) reached, liquidated 750 CHR (30% of holdings) at $0.22/CHR for $165.
11 March 2021: BTC 2nd target ($50k) reached again, liquidated 0.0444 BTC at $56,246/BTC for $2497.
25 March 2021: RNDR 1st target ($1) reached, liquidated 166 RNDR at $1.76/RNDR for $292.
18 April 2021: Missed the opportunity to sell 1st LTC and XMR targets due to our coins being in cold storage.
20 April 2021: XMR 1st target reached again, liquidated 1.788 XMR at $370/XMR for $661.
23 April 2021: XMR dipped more than 10% from our selling price a few days ago, re-bought 2.03 XMR @ $325/XMR for $661.
24 April 2021: XMR 1st target reached again, liquidated the original 1.788 XMR @ $365/XMR for $652.
4 May 2021: LTC 1st target reached, liquidated 4.8888 LTC @ $318.3/LTC for $1556.
Current Results (last updated 17/06/2021):
Initial investment: $10,000
Total cashed out: $7,521
Current value of remaining portfolio: $28,618
Portfolio + cash: $36,139
Stay tuned for more.
Buy us a pizza: