From Anthony Pompliano’s new strategy for investing in Bitcoin to the state of Ethereum in 2019, here’s a look at some of the stories breaking in the world of crypto.
Morgan Creek Digital founder Anthony Pompliano is introducing an investment thesis he calls a “radical protection portfolio” centered on investing 5% of one’s available cash in Bitcoin.
Although past performance does not indicate future results, Pompliano shows the impact that the investment strategy would have had in the past.
“A version of the Radical Protection Portfolio has previously done very well. A 99% cash / 1% Bitcoin portfolio would have driven ~10% annualized returns. A 98% cash / 2% Bitcoin portfolio would have driven ~20% annualized returns. Both of these allocations accomplished this outperformance while simultaneously taking less risk than investing exclusively in Treasury bonds.
Pretty crazy data to look at.
I call this portfolio the ‘Radical Protection Portfolio’ because it accomplishes two things: (1) capped downside risk of only 5% and (2) potential upside returns in the 20%+ range. There just aren’t many other portfolio constructions that rival these potential outcomes.”
Pompliano points to dwindling returns in the stock market and says although crypto investors should be prepared to lose it all, he believes the potential upside on a 5% investment in BTC is worth it.
“The stock market has reached record highs, debt levels are at levels previously unseen, and it seems like the party can go on forever. Of course, we know it can’t. And it won’t, but that doesn’t stop anyone from enjoying seemingly unending profits and charts that continue ripping upward. The funny thing about overheated markets though is that the future return of those assets is simultaneously decreasing.