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Gm. Finally got the time to do some blog updates. The start of 2023 has been hectic, as I was juggling between school and work. School wise, I am finally in my last semester, and work wise, I have been adapting to my new role as NFT Research Analyst, which has been extremely fruitful so far.
2023 has been pretty kind to crypto as a sector, as we've seen TradFi bank collapses and the Fed coming up with new tricks (Bank Term Funding Program) to not induce new money supply directly into the monetary system to save troubled banks. In my own view, the Fed hike cycle is likely at 70% completion and we likely will see short-mid term inflation stabilise around 4%. While I have no crystal ball, it is tough to see 2% inflation by this year or even next year, and any more aggressive hikes and likely more businesses will suffer and destroy any efforts the Fed made to tighten liquidity and counter inflation.
Credit cycle wise, we are likely near 80% completion at this point and likely see it flip to credit loosening soon to spur back activity. While I am no macro expert, friends and acquaintances in related sectors are going through all sorts of pain. Enough of macro, now let's dive in to what changes I've made to my portfolio.
April 2023 Portfolio
As of 30 April 2023
High Conviction Bets
I have pretty much consolidated my entire position into ETH alone, as I figured a full blown alt season is probably unlikely right now given how macro is and the genuine lack of new participants within crypto.
It really is a PVP market among existing market participants spinning up new narratives to their own self interest and agendas (think ZK narrative, memecoins like PEPE). It's not meant for everyone, but of course if you have an edge, you can certainly still make money from it.
As such, I have shifted to a more defensive strategy of simply stacking ETH through LSDFi primitives such as unshETH, which aggregates the yield from different LSD tokens like frxETH, cbETH, stETH, and rETH into a single token called unshETH. unshETH also distributes USH (the project's governance token) as rewards for unshETH stakers. It is still relatively low-key and not many people are capitalising on it.
Aside from that, my other ETH allocation is paired with USDC/USDT to earn yield from ETH-USDC/ETH-USDT farms across multiple chains, including ZK Sync Era mainnet to farm for the upcoming ZKS token airdrop that will likely drop in a year's time.
I also added a mini position in ARB due to the upcoming ARB token incentive season within the Arbitrum ecosystem, which was a similar playbook we saw in 2021/22 with ecosystems such as Polygon (MATIC), Fantom (FTM), and Avalanche (AVAX) all doing multiples as they launched their incentives program within their ecosystem. I expect a similar upside for ARB and as I mentioned multiple times on the Investing Beanstock DAO telegram group, ARB's fair value is within $1-$2 range ($1-$2B FDV).
While my current strategy is comfortably allocating to ETH, I do have some tokens that I am looking to accumulate as well.
Watchlist
To get straight to the point, here are projects I am keeping a close eye on and might potentially allocate if valuations get more attractive.
L1/L2
L1: Ethereum (Network effect + ultrasound money = inevitable $10K/ETH)
L2: Giga Bullish Arbitrum Ecosystem (DeFi innovation/Legoblocks)
Cross-Chain
Layer Zero Tech: Although STG token don't look that attractive right now, but I am very keen on their eventual token launch.
GameFi, P&E:
Embersword: F2P MMORPG that has been developing for years. I have $EMBER token allocation so just putting it out there for transparency.
Derivatives:
Renewed bullishness on GMX (DEX > CEX, new token listings, more products on the pipeline)
NFTs:
BLUR (new generation marketplace), NFTPerp/Tribe3 (derivatives primitive for NFTs)
While these tokens have promising narratives that may or may not play out in the future, and if they do, I am optimising for risk management right now rather than opportunity cost.
I am comfortable missing out on the first leg of alt season (should it come) as I am heavily allocated into the market anyways with ETH. The end goal from an imminent alt season/bull market is to outperform ETH and then taking profit to stack even more ETH. I have no plans on holding any other tokens long term aside from ETH.
Final Thoughts
Are we near the end of the hiking cycle? Not that it matters. Much of investing in markets is all about investor psychology rather than the underlying fundamentals, at least in the short term.
Macro indicators are past data and not optimal to forecast for future events. No one became rich from forecasting anyway, at least over the long run. The key is to grasp where we are in the markets and understanding the underlying sentiments and psychology of market participants. And from the broader point of view, most are still sitting on the sidelines in cash with much uncertainty worldwide.
Bank collapses in the US, regional conflicts like Russian/Ukraine and China/Taiwan, Cold War rivalry between USA and China, and many more global dynamics are at play all at once. The risk of World War 3 is also very real and the probability is non-zero. But that is also a silver lining in the world of investing.
When investors feel uncertain, that is where value can be found. Uncertainty is when it is the best time to allocate aggressively while others are cautious. And to me, that aggressiveness come in the form of investing in ETH. As the largest smart contract Layer-1 with the most activity and total value locked, and further improvements such as Danksharding down the pipeline, I am confident that this technology will be here to change the world. Once the infrastructures are mature enough, mass adoption will become second nature.
This is just a short update of where I think things are at right now, if you have more feedbacks or thoughts, feel free to leave or comment, or join my telegram channel to discuss further. Goodluck anon!
For those who wish to learn more about Crypto
What is Bitcoin? Answers here
Do your due diligence on Bitcoin in my post here where I debunk some of the myths regarding Bitcoin.
What is Ethereum? Simple Guide Here
I did a bite-sized article on Ethereum for you to get a crash-course on what the buzz word is all about here.
What is Decentralised Finance (DeFi)?
Or do you want to learn more about DeFi in a simple to understand manner? Click here to learn more
How to Value Crypto Assets?
Learn more about how you can put a "fair value" on crypto such as Bitcoin, Ethereum and more here
Disclaimer:
The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. In fact, the content is not directed to any investor or potential investor and may not be used to evaluate or make any investment.
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