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Happy New Year!
2020 was... well 2020, but amidst the steaming pile of hot trash that was last year, crypto was a bright spot, and today that’s what I’ll talk about. We’re leaving the garbage behind.
2020 was the year of validation for Bitcoin. 2017 was retail fueled hype and left crypto burnt out and smoldering for the better part of 3 years. To those that have hodl’d through, congratulations. To those that have just joined us, welcome. 2020 marked the emergence of the institutional narrative for Bitcoin. All of the work done on infrastructure during the last 3 years enabled big buyers to begin entering the crypto market and enter they did. 2021 will see this narrative get supercharged and likely (hopefully?) spill over into altcoins as institutional investors work down the crypto stack.
To celebrate 2020 and send it off for good, I wanted to reflect on the portfolio and how it changed over the course of such a dynamic year. Below is compilation of my notes, thoughts, and actions from January to today:
1/26 – carrying over from 2018, portfolio is split between emerging markets (EM), gold, and crypto. +18%.
2/9 – tremors from COVID are beginning to be felt across Asia, this thing is real and presents a significant threat to the EM segment which was targeted at Southeast Asia (China excluded intentionally). To mitigate losses EM is liquidated and re-allocated to gold and crypto. +40%.
3/27 – COVID begins in the US, equities markets get gutted, I start buying SPY puts as a quick hedge and they help slightly with losses. +3%.
4/17 – more IWM and SPY puts added. This will come back to haunt me. -1%.
7/15 – I start buying silver as a complement to the Gold allocation. IWM and SPY puts down 90%.
8/31 – Kleros (PNK) added to the crypto portfolio, smart contract arbitration is something I believe will be big as a corollary to Ethereum’s growth. +68%.
11/13 – IWM & SPY puts down 99% will likely expire worthless. Cardano position expanded. The Bitcoin wave appears to be building on a strong institutional narrative…
11/29 – gold & silver liquidated and reallocated to Crypto. This is a result of growing evidence Bitcoin will be the “faster horse” in the global macro picture against precious metals. +127%.
12/15 – IWM & SPY puts expire worthless. +130%.
12/31 – 97% allocated to Crypto with 3% Cash. Bitcoin pursuing $30k. +204%.
In 2020 I made two important calls. One was to liquidate the EM segment before COVID exploded. The second was to allocate heavily to crypto as it started to heat up in the back half of the year. I also made mistakes. The most clear of which was chasing the equities market down, I didn’t see the turn coming and got burnt on the rally.
In 2021 I’ll be looking for expansion on Bitcoin’s institutional narrative to drive growth. I expect this to carry over into altcoins as well. In the background, deteriorating macro conditions, especially for fiat currencies, will drive capital flight to hard assets like Bitcoin. USD is already weak, and with no end in sight to monetary base expansion, this problem will only grow.
For the newsletter, 2021 will bring more in-depth research, analysis, and of course portfolio reporting. I’m excited to share a new portfolio segment early next year and the associated research, as well as launching several community based features for readers.
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Thank you everyone for reading and supporting the newsletter in 2020, I can’t wait to show you all what is coming next year… stay tuned.
Happy New Year!
The Portfolio Rundown
Nothing in this email is intended to serve as financial advice. Do your own research.