![\"\"](\"https://sanzprophet.netlify.app/media/posts/119/BTCUSD_2022-06-19_12-51-14-1024x632.png\")
This post was written to help me clarify my own personal experience trading crypto and does not constitute financial advice.
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\n\nBack in 2015, as Greece was sinking deeper into an economic crisis, the IMF and the European Central Bank (ECB) proposed a draconian austerity plan in return for further monetary support. In a rare instance of pure democratic enlightentment, the Greek government called on the people to decide. The national referendum was set for July 5th 2015.
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\n\n61% of Greeks voted 'no', mainly out of national pride. It meant that Greece, a full EU member, would refuse the IMF/ECB loan, default on it's debt and return to it's national currency, the Darchma.
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\n\nIn less than a week, the ECB forced capital controls and a bank holiday across the nation. All banks closed. This forced the Greek government into overturning the referendum decision as people lost access to their savings and their pensions. Eventually the terms of the bailout were accepted.
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\n\nAt that time I realized I did not really 'own' my own money and 'my' bank was another a tool in the hands of some distant central bank.
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\n\nTwo years later I discovered Bitcoin. I started investing small amounts in the summer of 2017.
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\n\nI saw Bitcoin rise from $3,000 all the way up to $20,000. That was a 600+% return in less than 6 months, something unprecedented in regular markets. I was riding the wave in awe, waking up every morning, checking my account, showing my wife in disbelief.
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\n\nThen came the first series of corrections and the crash down to $6,000. If that was not enough, I had to endure more than a year of BTC slowly bleeding another 50% of it's value down to $3000.
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/119/BTCUSD_2022-06-19_12-54-07-1024x632.png\")
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\n\nNeedless to say my experience with alt-coins such as ETH (an alt-coin back then) and XRP was even worse. ETH was around $200 at the summer of 2017. It reached $1400 before crashing to $300 and eventually $89. By the end of 2018, most altcoins in my account had almost zero value.
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\n\nMy conclusion from the 2017 market where:
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\n\nBelieving in the fundamentals of Bitcoin, I held and added through the 2018-2019 bear market. I lost a lot of what I made but came out with a small profit and a bigger investment into 2019.
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\n\nSince I had 10+ years experiencing developing and trading quantitative strategies, I understood that the only way for me to trade the crypto market was rules-based Investing. I researched, backtested and created my own quantitative strategies that would get me in and out of crypto better that I could.
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\n\nAt that time, TokenSets already created a decentralized, rules-based fund that invested based on a long term moving average. It was a step in the right direction. When they allowed 'social traders' (ie, managers) to join, I created two funds. The BullBear Bitcoin (BBB) fund and later the BullBear Ethereum (BBE) fund.
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\n\nAt the time I wrote this as to what is the advantage of following the strategy:
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\n\n\n\nThe main advantage is controlling downside risk. Compared to holding Bitcoin the strategy has cut risk to less than half, in backtests. You also get rules-based entries and exits so that will remove your emotional decision process on when to enter or exit your bitcoin position
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/119/BTCUSD_2022-06-19_14-09-19-1024x591.png\")
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\n\nThe BBB strategy was launched in January 16 2020 with Bitcoin at $8,710.
The BBE strategy was launched February 1st 2020, with ETH at $183.
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\n\nBoth strategies skipped the March 2020 crash and went to cash. They went on to perform as intended, riding the bull market while going to cash when there was trouble.
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\n\nAs the bull market took off, it became evident that running a 'conservative' strategy was a problem. So while BBE was posting 300% gains, other long-only strategies posted 400%-500%+ since they never exited the market and used more volatile coins, namely LINK , to ride the bull run.
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\n\nThe lesson here became that if you wanted to attract money to your fund, you had to outperform ETH. If you underperformed, investors would leave and go to the 'winner' funds. In a straight bull market, the most reckless risk-taker wins. Anyone using a strategy that protected on the downside was underperforming and people had no incentive to invest.
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\n\nAs ETH shot from $300 to $3000 and DEFI protocols became popular, no-one was paying attention to momentum or trend-following. it all became about farming, staking and leverage and meme coins. The 'degen ape' became a thing and everyone was posting ways to earn 100%+ APY's providing liquidity on new protocols. Dogcoin, foodcoins and other alts were posting 3 figure returns... Everyone was making so much money and somehow everyone was a winner. Then came the NFT's and that pretty much signaled the excess as millions were spent on jpgs. And still the market kept going....
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\n\nIt would be unfair to say that one could time the top. The signs were there but the they lasted for a long time while the market kept rising. Some of the signs were:
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\n\nAlthough I had to stop running my public funds due to reduced AUM and high rebalancing ETH fees, I continued running my strategies in private.
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\n\nI became used to the bull market and decided to 'diversify' my profits into other strategies. One was a simple 'Buy and Hold'. I set aside some money that was very secure and not to be traded, as emergency money. The second was delta-neutral leveraged farming. The third was earning some % on various protocols (including Celcius). I also experimented with the Terra ecosystem way before it became popular, using the Mirror protocol to buy and 'farm' stock.
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/119/BTCUSD_2022-06-19_14-08-37-1024x632.png\")
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\n\nSo what happened?
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\n\nBelow is the equity curve from the backtest of the BBB strategy at 1x leverage. The strategy did ok and protected capital (460% vs 152% buy-and-Hold).
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/119/BTC-Short-Term-1x-Leverage-1024x866.png\")
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\n\nAnd here is is the equity curve for the BBE (Ethereum) strategy at 1x leverage. This fared better.
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/119/ETH-Medium-Term-1x-Leverage-1024x890.png\")
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\n\nMore strategy details on another post.
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\n", "image": "https://sanzprophet.netlify.app/media/posts/119/BTCUSD_2022-06-19_14-08-37.png", "author": { "name": "SanzProphet" }, "tags": [ ], "date_published": "2022-06-20T10:01:41+03:00", "date_modified": "2023-08-06T20:38:40+03:00" }, { "id": "https://sanzprophet.netlify.app/revisiting-bitcoin-plus-harry-browns-permanent-portfolio-2-years-later-40-profit.html", "url": "https://sanzprophet.netlify.app/revisiting-bitcoin-plus-harry-browns-permanent-portfolio-2-years-later-40-profit.html", "title": "Revisiting Bitcoin plus Harry Brown’s Permanent Portfolio – 2 Years later @ 40% profit", "summary": "On January 2020 I posted a proposal for combining the Permanent Portfolio…", "content_html": "\nOn January 2020 I posted a proposal for combining the Permanent Portfolio with a small 5% allocation to Bitcoin. The main argument was that by risking 5% of the portfolio we could almost double returns.
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\n\nTwo years later I am revisiting the portfolio to see how it did. The rules were very simple and easy for anyone to reproduce. The so called BPP (Bitcoin Permanent Portfolio) allocated:
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\n\nThe BPP returns from January 1 2020 until January 1 2022 are
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\n\nProfit : 40.5%
Maximum Drawdown: 13.28%
Sharpe: 1.40
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/118/13-02-2022-07-43-26-1024x148.png\")
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\n\nEquity assuming $100,000 starting capital
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/118/1.-Portfolio-Equity.png\")
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/118/2.-Underwater-Equity.png\")
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\n\nProfit : 19.35%
Maximum Drawdown: 10.13%
Sharpe: 0.85
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/118/13-02-2022-07-59-10-1024x152.png\")
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/118/1.-Portfolio-Equity-1.png\")
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/118/2.-Underwater-Equity-1.png\")
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\n\nIf you allocated just 5% of your Permanent Portfolio tp Bitcoin you would indeed double your returns while keeping a similar risk profile.
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\n", "image": "https://sanzprophet.netlify.app/media/posts/118/test-pp.png", "author": { "name": "SanzProphet" }, "tags": [ ], "date_published": "2022-02-13T20:04:28+02:00", "date_modified": "2023-08-06T20:38:40+03:00" }, { "id": "https://sanzprophet.netlify.app/the-bull-bear-bitcoin-set-and-bull-bear-ethereum-set-the-real-world-crash-test.html", "url": "https://sanzprophet.netlify.app/the-bull-bear-bitcoin-set-and-bull-bear-ethereum-set-the-real-world-crash-test.html", "title": "The Bull Bear Bitcoin Set and Bull Bear Ethereum Set - The real world CRASH test", "summary": "The Bull Bear Bitcoin Strategy and Bull Bear Ethereum strategy were build…", "content_html": "\n\n
\n\nThe Bull Bear Bitcoin Strategy and Bull Bear Ethereum strategy were build mainly to protect against crypto's Buy-and-Hold losses. So how it they do in a real world 'disaster' scenario:
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\n\nIn March 12 2020 there a -35+% flash crash in ETH brought the price from nearly $200 to a low of $85. Bitcoin experienced a similar pullback as some $700 million were liquidated via margin calls in Bitmex.
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/112/eth-crash-1024x717.png\")
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\n\nWith the markets going through this unprecedented crash, both strategies did what they are supposed to: Protect capital. The BBE strategy actually managed to hold on to some of Ethereum's bull run from February 2020.
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/112/Screenshot-2020-03-14-at-11.30.43-AM.png\")
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\n\nThis is not necessarily a given. The crash was fuelled by liquidity shortages from traditional markets. It was difficult to predict, especially for a non-mechanical system. Many systems, including Buy and hold ended up in the red.
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/112/Explore-_-TokenSets-After-the-crash.png\")
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\n\nPart of the design of the Bull Bear strategies, especially BBB, is to be out of the market most of the time in order to avoid such unexpected events. BBB was in cash almost a week in advance.
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\n\nI do hope crypto recovers and people don't loose faith. BBB and BBE are active and will enter on any new bullish move.
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\n", "author": { "name": "SanzProphet" }, "tags": [ ], "date_published": "2020-03-14T09:18:43+02:00", "date_modified": "2023-08-06T20:38:40+03:00" }, { "id": "https://sanzprophet.netlify.app/crypto-could-bring-fund-management-transparency.html", "url": "https://sanzprophet.netlify.app/crypto-could-bring-fund-management-transparency.html", "title": "Crypto could bring Fund Management transparency", "summary": "There are certain advantages to running a 'digital-only' fund at tokensets.com. One…", "content_html": "\nThere are certain advantages to running a 'digital-only' fund at tokensets.com. One is transparency.
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\n\n![\"TokenSets](\"https://sanzprophet.netlify.app/media/posts/109/Screenshot-2020-01-29-at-1.05.28-PM-1.png\")
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\n\nWhen you buy a Set, like the BBB Set, the transaction is logged into the Ethereum blockchain, which is a public ledger . This results in easy access to the latest fund AUM, distribution of holders and various other statistics, identified only by account numbers.
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\n\nThis is all public information and can be found at the BBB Token Address.
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\n\nYou can see the BBB Set description and live performance at: https://www.tokensets.com/set/bbb
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\n", "image": "https://sanzprophet.netlify.app/media/posts/109/Screenshot-2020-01-29-at-1.05.28-PM-1.png", "author": { "name": "SanzProphet" }, "tags": [ ], "date_published": "2020-01-29T20:25:45+02:00", "date_modified": "2023-08-06T20:38:40+03:00" }, { "id": "https://sanzprophet.netlify.app/the-bull-bear-bitcoin-strategy-at-tokensetscom.html", "url": "https://sanzprophet.netlify.app/the-bull-bear-bitcoin-strategy-at-tokensetscom.html", "title": "The Bull Bear Bitcoin Strategy at TokenSets.com", "summary": "+ I will be managing the Bull Bear Bitcoin Set (symbol: BBB)…", "content_html": "\n![\"Sets-Logo\"](\"https://sanzprophet.netlify.app/media/posts/108/Sets-Logo.png\"){kind=logo}
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\n\n+
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\n\n\nI will be managing the Bull Bear Bitcoin Set (symbol: BBB) . Much like an actively managed ETF, it switches between Bitcoin and Cash. There are currently zero (0%) fees*. It is 'non-custodial', so you own the actual underlying assets .
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\n\nVisit the Bull Bear Bitcoin Set at TokenSets.com .
1) Login with your phone number, an email or MetaMask to connect to TokenSets.
2) Select the Set and amount to buy (you will need ETH, USDC or DAI).
3) Confirm and track the Set in the account page.
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/108/The-Bull-Bear-Bitcoin-strategy-by-sanzprophet.png\")
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\n\nThe main advantage is controlling downside risk. Compared to holding Bitcoin the strategy has cut risk to less than half, in backtests. You also get rules-based entries and exits so that will remove your emotional decision process on when to enter or exit your bitcoin position. When in cash, the cash will earn interest via the Compound protocol (coming soon).
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\n\nThe strategy is meant to catch bullish moves of Bitcoin while controlling the downside risk. If Bitcoin never enters another bullish leg, neither will the strategy. If Bitcoin keeps going sideways and down, the strategy will accumulate small losses from entering and exiting.
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\n\nThis may be a good strategy for you if you plan to hold Bitcoin anyways but you are afraid of entering and exiting at the wrong time or you are not willing to sit by a 70%+ loss of capital.
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\n\nThe SET is much like an ETF or mutual fund but for digital assets. Like an ETF (or fund) it can hold other digital assets (for example 50% Bitcoin and 50% Ethereum) but it can also be actively managed. The manager can be a person or a set of rules (for example Buy Bitcoin when price > it’s 20 Day moving average), You can learn more about Sets here.
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\n\nAdvantages compared to parking assets on a centralised exchange ( Coinbase , Gemini, Binance, etc) and trading the strategy yourself :
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\n\n**If you hold an ETF like GLD, you are not really holding gold bars. You rely and trust the issuer to redeem your ETF for what it is worth. When you hold a Set, you are the owner of smart contracts that own the underlying assets, something that is 'set-in-stone' in the Ethereum blockchain. If the ‘issuer’, TokenSets, were to go under and disappear you could retrieve your assets using your own wallet.
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\n\nThere are the standard financial risks: Loss of capital,\npast results do not guarantee future results, etc. There is also the risk of\ncrypto-currencies losing all their value and going to zero.
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\n\nNow, compared to the more secure scenario of holding Bitcoin\nin cold-storage (offline) there are additional risks in:
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\n\nI think having easily accessible, rules-based strategies that we can just buy and sell is great. Being able to own it and keep them in my own wallet is a dream!
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\n\nDisclaimer: Please only invest money you can afford to loose. Past performance does not guarantee future performance. None of this constitutes financial advice that is related your own personal circumstances.
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\n", "image": "https://sanzprophet.netlify.app/media/posts/108/BullBearBitcoin-Set-Logo.png", "author": { "name": "SanzProphet" }, "tags": [ ], "date_published": "2020-01-21T22:44:14+02:00", "date_modified": "2023-08-06T20:38:40+03:00" }, { "id": "https://sanzprophet.netlify.app/bitcoin-plus-harry-browns-permanent-portfolio-a-mix-in-heaven.html", "url": "https://sanzprophet.netlify.app/bitcoin-plus-harry-browns-permanent-portfolio-a-mix-in-heaven.html", "title": "Bitcoin plus Harry Brown’s Permanent Portfolio – A mix in heaven?", "summary": "I have been somewhat obsessed with the simplicity and fundamental thinking behind…", "content_html": "\n\n
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\n\nI have been somewhat obsessed with the simplicity and fundamental thinking behind the permanent portfolio. I have written and analyzed it various times (here and here ) a well as created variations from it that are still running live, like the BUG and the Enhanced Permanent Portfolio. You can find these at Logical-Invest.com
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\n\nAdding Bitcoin to the Permanent Portfolio sounds very\nnatural to me:
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\n\nMr. Brown’s original allocations. We will call this portfolio the “PP”.
25% Gold, 25% Bonds, 25% Equity and 25% Cash
$5 /trade fee and yearly rebalance, no interest on cash.
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/107/image002-1.png\")
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\n\n| \n Initial capital\n | \n\n 100000.00\n | \n
| \n Ending capital\n | \n\n 119860.77\n | \n
| \n Net Profit\n | \n\n 19860.77\n | \n
| \n Net Profit %\n | \n\n 19.86%\n \n | \n
| \n Exposure %\n | \n\n 73.92% \n | \n
| \n Net Risk Adjusted Return %\n | \n\n 26.87%\n \n | \n
| \n Annual Return %\n | \n\n 3.69% \n | \n
| \n Risk Adjusted Return %\n | \n\n 4.99%\n \n | \n
| \n Transaction costs\n | \n\n 150.00\n | \n
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\n\nWe call this allocation the “BPP”.
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\n\nTHE BPP:
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\n\nAllocation Rules:
5% in Bitcoin, 25% in SPY, 25% in TLT and 25% in GLD.
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\n\nIn other words for a $100,000 investment you are ‘risking’ $5,000 in case Bitcoin goes to zero. This $5,000 theoretical risk would have tripled your (alas, theoretical/backtested) returns!
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/107/image004.png\")
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\n\n| \n Initial capital\n | \n\n 100000.00\n | \n
| \n Ending capital\n | \n\n 203444.61\n | \n
| \n Net Profit\n | \n\n 103444.61\n | \n
| \n Net Profit %\n | \n\n 103.44%\n \n | \n
| \n Exposure %\n | \n\n 80.53% \n | \n
| \n Net Risk Adjusted Return %\n | \n\n 128.45%\n \n | \n
| \n Annual Return %\n | \n\n 15.25% \n | \n
| \n Risk Adjusted Return %\n | \n\n 18.94%\n \n | \n
| \n Transaction costs\n | \n\n 200.00\n | \n
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\n\nThe comparison of course, is unfair. 2015-2017 were the great years of Bitcoin! – What about the 2018-2019, Bitcoin's bear market years?
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\n\nThe PP - 2018-2019 :
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/107/image006.png\")
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\n\n| \n Initial capital\n | \n\n 100000.00\n | \n
| \n Ending capital\n | \n\n 110415.37\n | \n
| \n Net Profit\n | \n\n 10415.37\n | \n
| \n Net Profit %\n | \n\n 10.42%\n \n | \n
| \n Exposure %\n | \n\n 73.92% \n | \n
| \n Net Risk Adjusted Return %\n | \n\n 14.09%\n \n | \n
| Annual Return % | \n5.09% | \n
| \n Risk Adjusted Return %\n | \n\n 6.89%\n \n | \n
| \n Transaction costs\n | \n\n 60.00\n | \n
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\n\nThe Bitcoin PP (BPP) - 2018-2019
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\n\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/107/image008.png\")
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\n\n| \n Initial capital\n | \n\n 100000.00\n | \n
| \n Ending capital\n | \n\n 110172.26\n | \n
| \n Net Profit\n | \n\n 10172.26\n | \n
| \n Net Profit %\n | \n\n 10.17%\n \n | \n
| \n Exposure %\n | \n\n 80.27% \n | \n
| \n Net Risk Adjusted Return %\n | \n\n 12.67%\n \n | \n
| \n Annual Return %\n | \n\n 4.96% \n | \n
| \n Risk Adjusted Return %\n | \n\n 6.18%\n \n | \n
| \n Transaction costs\n | \n\n 80.00\n | \n
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\n\nNot bad for 2018 being the worst year for Bitcoin.
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\n\nAllocating just 5% of your Permanent Portfolio to Bitcoin can boost yearly returns by more than twice. For every $100K invested, the risk that comes from Bitcoin going to zero is $5k. The benefits, in case of a new bull market, may be much greater.
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\n\nNotes: Both portfolios leave a lot of money in cash, 25% for the PP and 20% for the BPP. There are additional ways to enhance returns by utilizing this cash. Some we have shown in our Enhance Permanent Portfolio and BUG implementation. Another solution is to use interest-bearing digital cash like DAI or USDC via DeFi solutions like Compound, Nexo, Celsius, Nuo, BlockFi, etc. Other solutions are emerging including investing into actively managed strategies as a coin: More on tokensets.com.
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\n\n*The 2nd largest central bank (ECB) forced Cypriot and Greek banks into closing and later placed withdrawal limits into normal people’s accounts.
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\n", "image": "https://sanzprophet.netlify.app/media/posts/107/test-pp.png", "author": { "name": "SanzProphet" }, "tags": [ ], "date_published": "2020-01-13T17:19:26+02:00", "date_modified": "2023-08-06T20:38:40+03:00" }, { "id": "https://sanzprophet.netlify.app/enhancing-harry-brownes-permanent-portfolio-strategy.html", "url": "https://sanzprophet.netlify.app/enhancing-harry-brownes-permanent-portfolio-strategy.html", "title": "Enhancing Harry Browne’s Permanent Portfolio strategy", "summary": "First published at Logical-Invest.com Harry Browne’s intention was to find a solution…", "content_html": "First published at Logical-Invest.com
\nHarry Browne’s intention was to find a solution for the money “you need to take care of you for the rest of your life”. He called it the Permanent Portfolio because he believed that once an investor sets it up, they never have to re-arrange the allocations even if the outlook of the markets change.
\nHe argued that this mix of assets should assure “your wealth will survive any event, including an event that would be devastating to any individual element within the portfolio”.
\nThe portfolio consists of 25% Gold, 25% in the S&P500, 25% in Treasuries and 25% in Cash.
\nAccording to Harry Browne:
\nAs simple as this may sound, it is excellent advice. The Permanent Portfolio is one of the first and simplest type of Tactical Asset Allocation (TAA) portfolios. The strength of TAA’s come from combining uncorrelated asset classes that do well in different economic environments. The aim is to protect wealth and compound returns over the years. The purpose of this portfolio is not to outperform the market.
\nWe will look at three versions, including our proprietary one that aims for higher returns.
\nNo rebalance. Just buy 1/4 the S&P 500, 1/4 Gold and 1/4 long term Treasuries.
A 10 year backtest with fixed allocations (no rebalancing at all) shows a 6% average yearly return. The most important aspect is very low volatility and maximum drawdown of -9%.
![\"Statistics](\"https://sanzprophet.netlify.app/media/posts/106/06-02-2019-10-32-33-860x154.png\")
Going further back to 2005 we see that during the 2008 crisis the strategy suffered a bigger drawdown at -17 %. The compound average annual growth rate (CAGR) is 5.76%.
\n![\"Extended](\"https://logical-invest.com/wp-content/uploads/2019/02/06-02-2019-04-59-04-e1549556858761.png\")
The above graph includes the 2008 crash, the S&P 500 bull market (2009 -2019), the Gold Bear market (2012-2016) and the start of rising interest rates (2016-2019).
\nIn this version we re-balance the portfolio every year and bring it back to the original allocations. If the value of Gold has risen and Treasury prices fell we could end up with a 35% GLD, 25% SPY and 15% TLT portfolio. At the turn of each year we rebalance back to 25% each.
\n![\"Permanent](\"https://sanzprophet.netlify.app/media/posts/106/06-02-2019-05-20-37-860x743.png\")
The 2005-2019 backtest is slightly better with CAGR of 6.21% and a maximum drawdown of 14.4%. A viable strategy even for a taxable account.
\nWe changed 2 things:
\nThe algorithm considers the last 3 months. It runs all possible portfolios that consist of combinations of the three assets (i.e., 10% GLD, 0% TLT, 90% SPY) and records each portfolio's performance and risk. It then picks the combination that maximizes our modified Sharpe Ratio.
\n![\"\"](\"https://sanzprophet.netlify.app/media/posts/106/6522331-1552053214857674.png\")
The volatility attenuator allows us to give a weight to the volatility or risk of an asset. If the volatility attenuator is 1, then we have a normal Sharpe formula with performance divided by volatility. If the attenuator is 0, then we rank only by performance without consideration to volatility or risk. A volatility attenuator higher than 1 means that we rather want low volatility assets, but still prefer a good return.
\nFor this strategy we place more importance on minimizing risk. We use a volatility attenuator of 10, which means that we prefer low volatility portfolios. In practice this is very close to a minimum volatility algorithm.
\n![\"The](\"https://logical-invest.com/wp-content/uploads/2019/02/06-02-2019-09-01-25.png\")
On the bottom pane you can see the variable allocations across SPY, GLD and TLT.
\nThe EPP backtest from 2005 to 2019 gives a CAGR of 9.6 and a drawdown of -13%. The enhancement comes with a cost to simplicity. The strategy rebalances monthly and is best suited for investors that self-direct 401k and IRA accounts.
\nYou can find the Enhanced Permanent Portfolio and the above updated graph on the Logical-Invest site. We provide free monthly strategy signals for the EPP as well as the U.S. Sector Rotation Strategy.
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\n", "image": "https://sanzprophet.netlify.app/media/posts/106/07-02-2019-06-44-12.png", "author": { "name": "SanzProphet" }, "tags": [ ], "date_published": "2019-03-15T16:01:09+02:00", "date_modified": "2023-08-06T20:38:40+03:00" }, { "id": "https://sanzprophet.netlify.app/bitcoin-ethereum-and-altcoins-how-to-get-free-daily-and-intraday-bitcoin-historical-prices.html", "url": "https://sanzprophet.netlify.app/bitcoin-ethereum-and-altcoins-how-to-get-free-daily-and-intraday-bitcoin-historical-prices.html", "title": "Bitcoin, Ethereum and Altcoins: How to get free daily and intraday Bitcoin historical prices", "summary": "In order to analyze and build 'crypto' based trading strategies we need…", "content_html": "In order to analyze and build 'crypto' based trading strategies we need to get historical data for Bitcoin and other 'large-cap' coins such as Ether, Ripple, Dash, Monero, etc. But also for up and coming coins such as Neo, Stratis, IOTA and many more. In this post I will point you to two solutions:\n1. Using simple Python scripts originally posted by QuantAtRisk.com\n2. Using QuantShare software and a ready-made downloader.
\n\nI actually use QuantShare for analysis and backtesting and wrote a Cryptocompare downloader for it. If you have QS the downloader is free from QS's online trading objects library.
\n![\"QuantShare](\"http://sanzprophet.com/wp-content/uploads/2017/08/636383472223364824.png\")
![\"buying-bitcoins\"](\"http://sanzprophet.com/wp-content/uploads/2017/05/buying-bitcoins.png\")
\nThe easiest and most obvious choice is to open an account at Coinbase. You will have to verify your identity by uploading a few documents. Once you are verified you can transfer money via bank transfer. If you have a European passport you can do a SEPA transfer for zero fee but you can only transfer Euros (as of this writing). If you are U.S. based you should be able to use Dollars. Once your money arrives you can immediately buy Bitcoin, Ether or Litecoin. There is one minor catch. There is a small fee charged on top of the spread. Not a big deal but for a trader it is a no-go.
\n\nSo if you are a trader you move on to Coinbase's actual exchange, coinbase pro. You can login with your Coinbase credentials and voila you get access to normal bid/ask order book. You may need to further verify your account to trade on the exchange.
\nOne problem I have with Coinbase is that it does not allow E.U. based clients to deposit U.S. dollars.
\nSo moving on I tried Bitfinex. The interesting thing with Bitfinex is that it allows margin trading as well as margin lending. In other words you could not only trade on a reasonable margin but you can lend out money and get interest, much higher than you would in any bank. Bitfinex also trades multiple altcoins, so it seemed like a reasonable choice, at the time, for a smaller diversified account. After going through an extremely detailed verification process I was approved very quickly. No wonder... The next day Bitfinex announced it will not allow customers to withdraw funds in currencies via Bank transfer. This story is still unfolding as of today (17/5/2017)
\nThere are a lot of other exchanges one can use. I was interested in ones that are regulated in the U.S., so Gemini and itBit seemed interesting. Both exchanges look like they are setting up for institutional level, over-the-counter trading where one side could eventually be a regulated investment fund or in Gemini's case the ETF the Winklevoss twins are trying to set up. Gemini claims a 25 BTC minimum trade, so itBit seemed better for someone starting out. Moreover at ItBit, a \"maker\" pays 0% fee. A maker is someone who places a limit order and waits for the market to come to him, thus providing liquidity. This sounded good to me. The process of opening the account and verifying was easy. The wire transfer had to go through 2 U.S. intermediary banks and get to the Singapore based headquarters (for non U.S. customers) and was a bit complicated. Surprisingly, it did go through in less than a day and the fee was a reasonable $10 flat. Itbit does not have a fancy UI in terms of trading charts and other goodies and only supports Bitcoin trading in U.S. dollars, but it seems safe. One thing I am starting to see is that one never really know who is safe, so as always, it is best to diversify.
\nAnother exchange that has large U.S. dollar volumes is Bitstamp. It usually carries a better price on BTC/USD than other exchanges and is also one of the few exchanges that you can buy Ripple with USD.
\n\nComing from a traditional investing environment, there are some glaring realizations as one starts the investment process in digital assets.
\n\nThen the adventure starts.
\n", "author": { "name": "SanzProphet" }, "tags": [ ], "date_published": "2017-05-17T21:18:31+03:00", "date_modified": "2023-08-06T20:38:40+03:00" }, { "id": "https://sanzprophet.netlify.app/bitcoin-investing-ethereum-and-alt-coins-entering-the-world-of-cryptocurrecies.html", "url": "https://sanzprophet.netlify.app/bitcoin-investing-ethereum-and-alt-coins-entering-the-world-of-cryptocurrecies.html", "title": "Bitcoin Investing, Ethereum & Alt Coins: Entering the world of Cryptocurrecies", "summary": "Bitcoin investing and crypto portfolios For some time now, I have been…", "content_html": "\nFor some time now, I have been following news on various \"crypto-coins\" including Bitcoin, Ethereum, Dash, XPR and others. I have watched in awe at the booming world of Initial Coin Offerings (ICO) and the millions willingly thrown at dubious new ideas (just look at MatchPool a \"dating\" service that raised $6 million in 2 days) as well as the ease that new market indexes are built and get to dominate the crypto markets in days not years (see Iconomi buying 9% of Byteball without spending a dime).
\nAs I am building a new portfolio based on these new assets, I wanted to put down some of my thoughts and processes as I try to apply traditional investing principles to the brave new world of blockchain-based investing.
\nI am by no means an expert in Bitcoin or the blockchain. There are some very interesting aspects that are pulling me into this exciting world:
\n\nThere is a growing distrust of governments, fiat money and banking institutions. This has been true since the 2008 crisis but it has developed into a political mistrust of powers-to-be. Just look at recent elections in the U.K, the U.S. , France, Italy, to name a few. In less developed countries where capital markets are restricted this mistrust is a given as people are threatened by devaluations, seizure of property and political risk. There is a growing war on cash as well as privacy as governments have agreed on increased exchange of financial information (list of countries). Even traditional safe heavens like Gold, require a third party (a bank/ a vault) to either store it or verify it's value. Bitcoin, on the other hand, is border-less, portable, cannot (easily) be confiscated and can be easily set up for family wealth and inheritance purposes.
\n\nA portfolio manager's main problem when constructing a portfolio is to find a negatively correlated asset to the equity market that has a positive bias. In other words an asset that goes up when the SP500 goes down and that gains in value as time passes. In the past, two such assets existed: Treasuries and Gold. Now there is a third: Bitcoin. No wonder, recent deveopments point to the fact that institutional as well as retail money may be slowly coming in. Regulation and KYC rules are becoming mandatory. Once they are in place, the path for mainstream funds to enter the cryptomarkets will open. There are U.S. based exchanges (Gemini, itBit) that seem to be set up mainly for institutional level trading. If and when a 'trusted' ETF is set up, the sheer volume of new funds could further raise prices.
\n\nThere are many problems in Bitcoin land: Disagreements between developers, so-called hard forks, miner's oligopolies, large Chinese influence to quote a few. One that strikes me as important, is the electricity consumption needed to keep the Bitcoin blockchain safe. This does not mean that the underlying technology, the blockchain, will cease to be of use. The technology behind is useful and increasingly relevant in a changing de-centralized world.
\nWe are moving into a 'virtual' economy where workers are spread across the world living in different countries, their paychecks and expenses traveling across currencies and tax regimes. This will be a challenging environment for the governments to collect taxes. They may eventually be forced into embracing the technology as a means to retain their status quo and ability to collect taxes. If that happens then crypto world will go mainstream and some of these companies (and coins) will gain dramatically in value. Diversifying across coins and companies may be a good way to participate in a growing economy even if Bitcoin is not its main product.
\n\nUnlike regular investments, setting up for crypto-currency trading/investing is a fairly tedious process with a lot of unknowns. I will try to document some of these in the next articles.
\n", "author": { "name": "SanzProphet" }, "tags": [ ], "date_published": "2017-05-07T09:12:20+03:00", "date_modified": "2023-08-06T20:38:40+03:00" } ] }