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CryptoSpreadsheet (CB)

Bitcoin is the front-runner in the fastest growing asset class in the world. To read an article about why I think that is, click here. The chart below confirms my analysis. It also shows a huge shift last year into alt-coins. In 2016, Bitcoin represented 88% of the total crypto market. In 2017, Bitcoin represented 39% of the market. Bitcoin is a conduit into the crypto world.


What other coins should you invest in? There are over 1300 coins and traditional valuation techniques don't apply here. What to do?

I've been researching this question. In particular, I wanted to know which alt-coins performed the best over the last 6 months. More importantly, what did they all have in common 6, 12, or 18 months ago that I can profile today. This spreadsheet is a product of that research.


Strategy #1 - The Bitcoin HODL Churn

Before getting into my alt-coin strategy, let's discuss my Bitcoin allocation. I allocate 50% of my portfolio to Bitcoin. 

My Bitcoin strategy is simple -- follow Bitcoin P/E. I use Willy Woo's network value to transactions (NVT), also referred to as "Bitcoin P/E", to tell me when to buy and sell.

First devised by Woo, the calculation uses the money flowing through the network as a proxy for earnings. A historic chart of Bitcoin’s NVT ratio is below.

A live and interactive chart is available on his website Woobull.com along with an in depth explanation of the ratio.

What about the rest of the crypto universe?

Strategy #2 The Mall

Alt-coins represent the other 50% of my portfolio. There are over 1,300 alt-coins available. Which ones do you invest in? I invest 35% in coins from The Mall (strategy #2), and 15% in coins from The Incubator (strategy #3).

There are many reasons why people buy crypto. Utility is by far the most important reason, but in my research I've found other reasons to be just as important. These are visibility and access. Access refers to the ease of obtaining the coin. Visibility refers to general attention. The most highly visible coins are the ones with the most access.

What data do I use for Strategy #2? I've created a spreadsheet highlighting the most visible and accessible coins in the crypto world. I refer to the spreadsheet as "The Mall". It includes the top 50 coins by market cap. Of the top 50 coins by market cap, only 8 can be considered Bitcoin or Ethereum clones (I provide a short description of each coin in the spreadsheet). The spreadsheet also includes:
  • prices from Jan. 7, 2018
  • prices from June 25, 2017
  • 6 month price comparison
  • market value (network value)
  • total coins outstanding
  • volume
  • transactions
  • circulated multiple
Within this list, I also highlight McAfee's favorites, my favorites, platform currencies, exchange currencies, top 50 "newbies", and a few honorable mentions that didn't quite make it to the top 50 list this week. Not all coins that make it to The Mall are good, but they all have considerable backing (users, miners, consortiums, stakers, marketing, developers, etc).

Which coins are on The Mall today? One coin grew over 57,000% in the past 6 months and is still trading at less than a penny. Another privacy focused coin grew over 4,000% (in part due to John McAfee's tweets). One of my favorite coins on the list gives everyone their own blockchain -- it grew over 29,000% in the last six months. Another coin specializing in digital IOUs is up 1,700% over the same time period. The worst performing coin is down less than 5%. Of the 50 coins on this spreadsheet six months ago, 30 are on the list today. What's more, those at the top of the list 6 months ago, have a greater probability of being on the list today.

Strategy #3 The Incubator

The final strategy looks for baby cryptos priced for less than $.01 that have the potential to grow exponentially. This includes ICOs (for a quick tutorial on how to research ICO's click here). I like to look for coins that have a high price to transactions ratio (T/P). The coins with the highest ratio are the ones I research further.

What data do I use for Strategy #3? I use a spreadsheet showing me the T/P for all 1,300+ cryptos sorted from highest to lowest. I refer to it as The Incubator. To be clear, T/P is not a magical indicator, but I use it as a way to focus my research.

In addition to providing a list of 1,300+ cryptos, The Incubator includes the market cap, price, circulating supply, 24 hr volume, and 24 hr transactions. The spreadsheet comes pre-sorted from highest to lowest. I also provide instructions on how to continue your research on these cryptos because a high T/P could mean "sell-off".

Important: To mitigate risk, only transfer fiat or coin to the exchange when you are ready to trade it. The exchange house is not a place to store or park your coin. Buy your coin and then transfer it to an offline wallet (
Ledger Nano S, Trezor, Ledger Blue). Leaving it in the exchange is exposing yourself to unnecessary risk. I like the Ledger Nano S, but the Trezor is a close second. Ledger Blue is premium and convenient, but unnecessary. 

What this spreadsheet is and is not:
The current spreadsheet is meant to be used as a research tool. It has evolved out of several q&a sessions and I fully expect for the evolution to continue. At some point I may take the evolution off-line, but for the time being I'd like to open it to anyone with input.

Your feedback and suggestions will be incorporated.

These are a few of the suggestions from users that I'll be working on incorporating in the future:
  • Biggest gainers/losers over the past week, month, three months
  • Mined vs non-mined coins
  • A "how long have you been on the top 50" column
  • A "birth-date" column 
  • A "newly listed" spreadsheet to highlight coins that have been newly listed on high access exchanges like Binance and Coinexchange.
This spreadsheet is not a valuation model. I've thought about developing a model, but most traditional valuation methods don't apply in this world - it's like trying to use classical physics to solve a problem that calls for quantum mechanics. The market is so young, and there's so much new capital flowing into it, that high visibility, high access coins with a good development team can be enough of a value proposition to send a coin soaring.

This is a cumulative effort and I'll be updating the spreadsheet with various suggestions from week to week.
 Jan. 22 CryptoSpreadsheet
Jan. 15 CryptoSpreadsheet (Limited Version - Top 10 only)

To purchase the full version (Top 50 coin comparison) click here.

 

The spreadsheet is published every Monday. The next spreadsheet will be published on Jan. 22, 2018.If you have any issues please contact me using email or on SeekingAlpha.

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