Behind the TIB Investors Journal #7: Finding More Rising Altcoin Stars

The star coin of my first altcoins portfolio delivered a 1000+% return in its first 3 weeks. That led me to find a way to construct a portfolio of rising stars for my second portfolio. That 2nd portfolio after one week shows a rise of 20% in Bitcoin terms and 41% in US Dollar terms.

The selection of coins in that portfolio was constrained by the coins listed on Bittrex, the exchange I already had an account in. This led me to explore other exchanges with a wider range of coins.I was wanting to open an account at Binance.com, one of fast growing Chinese exchanges. When I was ready to roll, Binance was restricting new account openings. That led me to open an account at Gate.io, an even newer Chinese Exchange with a wide coin covering. My 3rd portfolio was constructed there. Find an affiliate link to open an account at Gate.io - they rebate trading fees for a period of time for referred links. I failed to do that = no discounts.

My affiliate link is http://mymark.mx/Gateio

The selection process. In Behind TIB6, I laid out my screening process.Here it is again

1. Go back two months and get the top 200 then. I used November 5, 2017. https://coinmarketcap.com/historical/20171105/
2. Get the list of the top 200 now. https://coinmarketcap.com/
3. Pick out new entrants to the new top 200 list. Excel does a good job of that.
4. Research each of the new entrants to understand what they do.

Add in 3a. Calculate the rate of rise from 2 months ago to the current list.
Add in 5. Identify the exchanges the coins trade on and open accounts in exchanges giving good coverage. I have new accounts at Gate.io and Binance.

The core idea here is to use market intelligence to help me find investment ideas. The rate of rise up the tables is a powerful way to measure the pulse of market acceptance. Yes, it does run the risk of grabbing star runs that then fall over when the love affair is over. That is why I choose to construct a portfolio in equal weights of 8 or so coins.

Since I ran my first screen, I have redone the screen and I made a video showing the steps. Watch that video here - the whole process takes less than 30 minutes - 28 minutes is the video length.

I worked my way through my original list [Note: it is different to the video list] and identified exchanges. As I was able to open an account at Gate.io, I sorted the list into coins available at Gate.io. This is a snapshot of the list summary.

It shows January rank, coin name, coin code, exchanges listed, and a one liner for category of coin. My analysis showed that the last 7 had not been in the November list (that is why they are separate). My video work re-doing the list showed that they were all around in November. What I do know is that all 10 were not in the top 200 in November (unless they changed name). [Note: There was an error in the lookup function. 5 of the coins were not in the November list]

Now I could have chosen at this stage to do more work at understanding the proposition in more detail. I did read all the websites. I did like the fact that some had very specific propositions - e.g., streaming data tokenizing or lending or creative arts blockchain. I did like the fact that some are aiming to make other concepts work better - e.g., secure smart contracts or ETH token transfer or trading liquidity. I am wary of me-too concepts like yet another smart contracts platform. The reality is we do not really know which smart contract platform is actually going to work or which will gain traction. 10 coins came up - so I added positions in all 10 rather than trying to knock out 2.

What this list does not show is that all are tradeable at Gate.io in Ethereum markets. That makes the list different to the 2nd portfolio which are all in Bitcoin markets. I transferred Ethereum from my Ethereum mining activity to the account and put in bids for 10 coins. I simply put bids in between the bid and ask price and let the market find me in the middle. Here is the spreadsheet of the first cut portfolio started on January 9 when the Ethereum price was $1164.

The sheet shows the latest price in Ethereum in column 1 and the Units in column 4. The % change column is the change in price in ETH terms - I have also pulled down USD Prices so that one can see price move in ETH and USD terms. The last column shows the portfolio mix - you will see each is around 10%. By the time the spreadsheet was made latest ETH price had moved up to $1213.

As to the components

• ICON (ICX): Billed as a decentralised blockchain but already making strong inroads in becoming the de facto blockchain for South Korea
• Streamr DATAcoin (DATA): Tokenizing streaming data to facilitate the trade in data related to streaming.
• Etherparty (FUEL): Smart contract programming onto an Ethereum blockchain
• Dragonchain (DRGN): Provides a commercial platform for application developers to rapidly and securely deploy Blockchain applications while maintaining existing language development environments and keeping proprietary data private (this came out of Disney in Seattle)
• QASH (QASH): Liquidity provider for non-liquid crypto markets -e.g., for crypto trading
• Quantstamp (QSP): Securing smart contracts with cost-effective code auditing
• Raiden Network (RDN): Fast, cheap, scalable token transfers for Ethereum.
• aelf (ELF): Decentralised cloud computing blockchain network
• ETHLend (LEND): Fully decentralized peer to peer lending on the Ethereum Blockchain
• Ink (INK): Blockchain for the creative industry

You can look at all the portfolios in a Google Sheet document. There is a tab for each of the 3 portfolios. prices should update automatically when you open the sheet. If price does not update automatically edit the first cell in each sheet. Please do not edit anything else as this is a shared resource. Make a copy if you want to play with the sheet. Google Sheets only works on an iPad if you download the Google Sheets app.

http://mymark.mx/AltCoin

What's Next?

• Set up another portfolio of Rising Stars on Binance
• Review one month performance for Next 8 portfolio. I will do some re-balancing work on this probably dumping the worst coin and adding in a new replacement using some of the gains from the leading coins.
• Extract the winning themes to use to identify new coins.

Credits: Market capitalisation data can be found at https://coinmarketcap.com/ Coin logo images are copied from official Twitter profiles for each coin. ICON logo comes from the ICON Foundation website

Links:
Referral link for Gate.io http://mymark.mx/Gateio
Referral link for Binance.com http://mymark.mx/Binance

Constructing 1st Altcoins portfolio - next 8. http://mymark.mx/BehindTIB5
Constructing 2nd Altcoins portfolio - rising stars. http://mymark.mx/BehindTIB6

The Spreadsheet summary http://mymark.mx/AltCoin