The $10,000 Investment Challenge (paper trade) - Up 40% in three months!

Numba go up.  Solana has more than doubled in price since I started this paper trading experiment on December 11, 2023.  I bought into it at $69.65, and it was $147.80 today when I took some profits.

Disclaimer

Just a reminder, this is a paper trading exercise, which began with this blog post, on December 11, 2023.  I opened a Coinbase account, but was unable to put any money into it, because of my cheap ass phone.  That really pissed me off, since I knew the next big Bitcoin/crypto bull market was already underway.  I decided to to pretend I had $10,000 to invest in anything, and do a paper trading experiment instead.  This whole thing started with this November 14th, 2023 post, about the coming Bitcoin bull market potential, due to the BTF spot ETF's and the upcoming Bitcoin halving.  So I don't actually have $10,000 invested in crypto, and this experiment should not be taken as investing advice.  See the Disclaimer above.

Anyhow, I clicked on the news today and saw that Bitcoin was up over $72,000 per coin, a new all time high.  I knew Solana, the early star of my pretend portfolio of cryptos, was about double from where I bought in, on December 11th, 2023.  Sure enough, about 8:25 am PDT this morning, Solana was $147.80 per coin.  I initially bought into SOL at $69.65.   Here's where my portfolio stood after the last trades, in this February 21st, 2024 post.  So here's today's actions:

I sold 7 SOL (Solana) @ $147.80.  That came to $1,034.60, minus the 5% gas fee I'm figuring per transaction, which was $51.73.  That left me with $982.87.  

I took that $982.87 and bought 405.97 APE (Apecoin) at $2.30 per APE, after a $49.14 fee, that cost me $933,73.  

Now, my crypto (paper trading) portfolio consists of:

.011995 BTC (Bitcoin)

.2259 Eth (Ethereum)

7.647 SOL (Solana)

56.931 AVAX (Avalanche)

74.962 DOT (Polkadot)

595.298 Matic (Polygon)

2,685.31 APE (Apecoin)

490.196  SAND(Sandbox)

510.204 MANA (Decentraland)

The total value of this portfolio, that started with $10,000 on December 11, 2023, now ads up to :  $14,017.97

So it's up over 40%, after gas fees, in three months.  I'll take it.  

At this point, my 7.647 Solana are completely paid for by profits from selling Solana.  So I'm "playing with house money," as a gambler would say.  I own those free and clear in this portfolio.  I put the profits into more Apecoin, because I'm a big fan of Yuga Labs, and think APE is a solid bet, that could go 3X to 14 X from here, based on its past prices.  It could go up even more.  Time will tell.  

Again, this is a paper trading portfolio, these are pretend investments.  This is an experiment, since I couldn't put money into an actual account to buy crypto when I really wanted to.  

I've been writing on many other topics on Substack, a platform designed specifically for writers, check it out:

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Blogger's note- 3/24/2024- When I wrote this post, I didn't link all the previous posts about my $10,000 investment paper trading experiment, or the original post from last November, which led up to this post.  So now, on March 24th, I'm adding those links, but not changing anything else in this post, not one character.  So here are the links of the previous posts in this series.  

November 14, 2023- The Great Bitcoin Play of 2023-2025  Bitcoin was about $36,366

December 11, 2023- The $10,000 paper trade investment challenge Bitcoin was about $41,935

December 21, 2023- The $10,000 investment challenge paper trade  Bitcoin was about $43, 875

February 21, 2024- My $10,000 investment paper trading exercise- two months in  Bitcoin was about $51, 109

February 28, 2024- My $10,000 investment challenge- paper trading- Taking profits! Bitcoin was about $61,069

March 11, 2024- Bitcoin was about $ $69,000, after an intra day peak of over $72,000

March 24, 2024- Bitcoin is $69,633 today, as I was adding this note to this post.  Bitcoin, and other cryptos, have largely backed off the last few days.  It's the end of March, 2024, and the Bitcoin halving is supposed to happen sometime in April.  

Much like before the Bitcoin ETFs got approved in January, the price rose up before the event, and then backed off shortly before the ETF's got approved, and then started moving up again a short time afterwards.  I expected Bitcoin to take a break for a while before the halving, since there's been such a good rally.  Yes, the peak around $72,000 could be the top of this Bitcoin bear market.  But I, personally, don't think so.  The trough to peak spread on the last two Bitcoin bull markets were 18X in 2017, and 17X in 2021.  If that happens again, Bitcoin would hit $282,000 to $298,000.  I think it's unlikely Bitcoin will grow that much this cycle, but those numbers make a rise to $120,000 to $150,000 at the peak, seem quite plausible.  I think Bitcoin, and crypto in general, is just taking a break, which could very well be manipulation by Wall Street, pushing down prices so the companies that opened up the Bitcoin ETF's can buy more BTC before the halving, at a cheaper price.  That might be what's going on right now.  My educated guess is that Bitcoin will chill out for a couple of weeks, maybe a month or so, then, after the halving, continue the bouncy upward rise that has been happening the last 2-3 months.  Again, this is speculation on my part, this is not meant at financial advice, it's simply one person's opinion.  Read the Disclaimer linked above, and always do your own research and due diligence before making any investment decisions.   

 

The money I'm not making...

Yeah, that's right baby... uh huh... make it rain.  OK, hopefully it's raining money for someone out there.  Times are tight, and getting tighter, financially, for most people.  I think the recession is already here, and is just in stealth mode for now.  We'll see.  Here are a couple of the financial blog posts I've written in the last year and a half about money and investing.  

Disclaimer

Life is full of ironies.  I'm a homeless guy who's been fascinated by the dynamics of the financial markets for over 30 years now.  Way back then, starting when real estate was surging in Southern California in the late1980's, I started trying to understand the dynamics of the real estate market cycles.  Then I started watching stocks, and it just kept going from there.  From time to time I write a blog post about things I think will happen in markets, or where I think we are in a particular cycle.  This post is about two of those blog posts.  

Post #1 I wrote on December 28, 2022- "What separates Warren Buffet and Charlie Munger from everyone else"

This post was sparked by a video I saw on YouTube, of CNBC TV show host, and stock market legend, Jim Cramer.  In the embedded video, Cramer talks about how the mega cap tech stocks, the stocks now known as The Magnificent 7, completely cratered in 2022.  After giving excuses for why they all tanked, he tells investors/speculators to "pare back" on those stocks the next time they rally.  "We want cheap stocks now," he says in that clip.  As a homeless guy who had been watching, studying, and learning about long term trends on my own for 30 years, I was laughing.  To me, that looked like the perfect time to buy all of those stocks.  

So I wrote that blog post talking about Berkshire Hathaway's legendary investors Warren Buffet, and the now late Charlie Munger.  Those guys made their own fortunes, and fortunes for many Berkshire investors, by doing just the opposite.  They called it "value investing."  They studied businesses, and waited for good businesses' stocks to get beat up, and be underpriced in the market.  That's when they would buy, when everyone else hated those stocks.  

I said in this blog post that I wasn't interested in buying stocks then, even if I would have had money at the time.  I was learning about the crypto world, and watching it's peak to trough cycle play out.  But if I had to buy a handful of stocks to hold, and not touch them for 5 whole years, these are the stocks I would buy:  Apple, Google (Alphabet), Amazon, Microsoft, and two companies I just liked as businesses:  Pinterest and Shopify.  Those were my "going to go live on a deserted island and just let them ride" stock picks on that day, December 28, 2022.  

All of those stocks are way up, as of right now (March 4, 2024).  Apple is up the least in 14 months, 39%.  Shopify, surprisingly, is up the most, 130% in 14 months.  Shopify has actually tanked for a while.  At its peak, it was up 412% from the day of that blog post.  The other ones I picked are now up between 30% and 130%.  

Now, I fully expect these stocks to tank in the coming months of 2024.  I'm surprised they haven't already.  I expect Jim Cramer to make another show like the one in this blog post at some point in 2024.  And I still think those six companies are solid bets for the next four years.  But I wouldn't put my money in any of them.  The Magnificent 7 stocks are absurdly high priced at this point, and I think there are much better places to put money as an investor right now.  

Yes, I'm a broke homeless guy.  But I'm a broke homeless guy who makes some interesting investment calls from time to time, because I've studied the dynamics of the markets, and learned about them, for a really long time.  I expect up and down cycles.  I don't expect stock prices to defy gravity (and common sense), forever.  So that's a few thoughts about my December 28, 2022 blog post on this blog.  

The other post I want to mention is one I wrote on November 14, 2023.  "The Great Bitcoin Play of 2023-2025 has begun."

There's a weird difference between the mostly older stock investors, and the younger Millennial and Generation Z people who are many of the investors in crypto.  Crypto investors expect downturns.  They expect crashes to happen.  "Crypto winter" is a widely used term in that world.  But stock market investors (actually most are speculators), always seem to get caught up in the late cycle hype, and think prices will go up forever.  We're at that point in the stock market right now, as the vast majority of all stocks are actually down over the last year or so, and even a couple of The Magnificent 7 may have peaked.  

Crypto's different.  The whole FTX and Sam Bankman Fried scandal in late 2021 led to a crash of the whole crypto world.  The Trad Fi world, traditional financiers, said, "See, we told you so, it's all a scam.  Worthless internet money."  The crypto world faded from public view for the most part, and went quiet.  But crypto coins didn't die off, and even NFT's kept selling.  The hardcore crypto people bought the lows over the last two years, quietly.  New ideas kept coming up, and some new crypto/DeFi/Web 3 businesses started up as well.  

Bitcoin dropped from it's November 2021 peak of  over $64,000 per Bitcoin, to a little under $16,500 per Bitcoin in the trough.  Then it slowly began to rebuild, and to rise back up in price.  In the summer of 2023, word that Blackrock planned to start a Bitcoin spot price ETF came out.  That would open up many traditional finance players to get some exposure to Bitcoin's price, without actually have ing to buy the crypto.  People argued whether that was good or bad for the crypto world overall.  But the majority expected the ETF to happen in early 2024.  The price of Bitcoin began to rise even more.  Another big milestone, the next 4 year halving, programmed into the code of Bitcoin, was set to happen in the spring of 2024.  Those two things seemed to spark talk that the next big Bitcoin cycle, which would lead crypto overall in to a big bull market, was beginning to happen.  When Bitcoin goes up over time, other cryptos follow.

On November 14th of last year, 2023, I wrote a blog post, and explained this case that many people in the crypto world were talking about.  The ETF and the halving should send Bitcoin back into another bull market cycle that would last from 12 to 24 months, or so.  Bitcoin was at 36,366 the day I wrote the post.  It had already climbed more than 100% in price from the low after the 2020 crash.  

In early January, several Bitcoin spot price ETF's were approved, and opened up for business.  Bitcoin had risen from 36,366 to over $40,000.  Then it backed off a while, and eventually started climbing again, as we head into the halving in mid April of 2024.  Today Bitcoin reached a new high of over $68,000 per Bitcoin, and was at $68,386 as I wrote down numbers to get the info for this post.  

Bitcoin, the original blockchain crypto token, is up over 314% from the low in the 2022 trough, about 14 months ago.  Bitcoin is up 88% since I wrote that post in November of 2023, about 3 1/2 months ago.  I personally think it may back off around the halving, take a breather, then start climbing again.  When the halving happens, Bitcoin miners get 1/2 as much for each time they solve a problem, and get Bitcoin through mining.  This means that the price tends to double within a few months, to compensate for the reduced payments to miners.  The overall consensus I've heard is that Bitcoin is expected to top $100,000 per Bitcoin in this next bull market.  

After working out the numbers of how much it has climbed in price in the last two bull cycles, I personally think we will see Bitcoin hover in a range between $120,000 and $150,000 per BTC, for a little while.  I think we will likely see some spikes up to maybe $180,000 per Bitcoin, probably in the first half of 2025.  And then, like before, the hype and FOMO will fade, and it will crash significantly.  

But there will be a lot more institutional money in the ETF's and much more money in Bitcoin, and other cryptos, and the next trough will almost certainly be higher than this past one of $16,500.  This is all a mixture of educated guesses, looking at the previous two bull cycles, and pure speculation on my part.  Nobody knows for sure what will happen.  But Bitcoin, and many other cryptos, are in a bull market right now, before the halving, and there are fundamental reasons it should go quite a bit higher, eventually, than the new high set today.  

So there are thoughts on two of my previous posts about investing in stocks and crypto, and how things have played out so far.  I personally think that we are already in a recession, and that will become obvious in the next two to three months.  This should cause a major correction in stocks.  But I think Bitcoin and crypto have a lot of fundamental reasons to keep going up, even in a major recession.  We'll see what happens.  

I've been doing a lot of writing on Substack lately, check it out:

Steve Emig The White Bear's Substack