Digital Slowmad newsletter
15 April 2022
Crypto portfolio update
Invested in: USDC, ETH, AVAX, NEAR, JEWEL
Net return: 658.9%
Comments: Over the past two weeks my net return has increased, as I:
- Sold some DFK heroes
- Sold my CRYSTAL airdrops
- Took profits on my NEAR position (and re-entered at a better price)
If you've been following me on Twitter you'd have picked up on my changing stance regarding the crypto market.
Previously, I was more optimistic.
Now, I'm more pessimistic.
Dark clouds have returned as the stock indices struggle to rally and Bitcoin prints a false breakout amid a backdrop of rising interest rates.
Everything considered, I'm not expecting the broad crypto market to rally any time soon.
In fact, I think it's more likely to go down in the coming weeks.
Things could get ugly
My current forecast calls for weak market conditions in the short-to-medium term.
Not every cryptocurrency will fall (there are always exceptions), but in the absence of a surprise event I'm expecting to see sell-offs across the board.
This being said,
- I could be wrong
- Even if I'm right, there's no telling how large the dip will get, or how long it will last
In my view, therefore, the best thing to do is to hold a generally defensive portfolio with a small risk-on component.
Right now, most of my liquid capital is in stablecoins which I'll be using to DCA into dips.
Ultimately, I'm looking to to allocate
- Most of my liquid capital into blue chips (currently ETH)
- A small portion into established coins with upside potential (currently AVAX)
- A small portion into speculative coins/projects that might outperform the broad crypto market (currently NEAR)
Every portfolio configuration has trade-offs, and this is the one I'm most comfortable with right now.
Users (30 days): 185.8k (+31%)
Transaction volume (30 days): $781.4m (+15%)
Discord members: 93.4k (+2%)
Game activity has mostly resumed to pre-Crystalvale levels, which reinforces an assertion I made on Twitter two weeks ago.
On April 1 I unironically published a tweet thread that triggered a bunch of people (click to read):
It kind of blew up, attracting even the attention of Avalanche's head of DeFi, Luigi D'Onorio:
A lot of people wanted Crystalvale to be a success, me included. I had bet a non-trivial portion of my capital that its launch would draw in a large number of new players from the AVAX chain.
At the time of the launch, JEWEL was trading at $11 but it quickly became clear that the number of new players joining the game was not nearly as high as I'd expected.
Many existing players overlooked this small (but critical) factor, as they got excited by the high APRs in the Ice Gardens.
In my mind however, alarm bells were ringing. I strongly doubted the sustainability of JEWEL prices and sold my stack for a -10% loss (click to read).
This was a difficult call to make in public, especially after being treated quite unkindly for my recent contrarian views.
But, as it turns out, my intuition was right. The price of JEWEL collapsed >50% from the Crystalvale high.
And with this, I consider the matter settled. The market has decided the winners and losers of this event.
So what's the next with regards to DFK? What's the next play?
To be blunt, I'm not seeing one.
Most of the previously-hidden cards on the table have now been revealed, and I don't see anything else worth speculating on at this time.
But for discussion sake, if I *absolutely had* to make a play today, I'd look to buy quality heroes and eggs for cheap. The recent JEWEL price collapse has spooked a lot of players who are now selling their assets at heavy discounts.
Aside from this, I don't see any other "alpha plays" worth considering right now. As far as I'm concerned, this is the time to stay low and to keep questing.
Time it takes to crack your password
This is how long it takes to brute force (i.e. crack) your password. Keep your coins safu, guys!
Quote of the week
What appears to be luck is often preparation and patience.
Mastering your circumstances starts with being advantageously positioned.
- Shane Parrish
Thanks for reading, and have a great weekend.
P.S. If you have any questions or feedback, let me know at: chris[at]digitalslowmad[dot]com
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