INVESTING FOR THE 21ST CENTURY

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  • Fiscal Frontiers

Crypto-Investing Review: 2019 YTD

April 15, 2019 Update

(Disclaimer at end of post)


Introduction


The first quarter of 2019 is now behind us and a surge in crypto asset values has given us a roughly 40% jump in lifetime portfolio value. But this blog is about income, not speculation, so we’ll try to keep most of the focus on the passive income side of the equation.


The biggest news of the quarter is that we found a new crypto investment! The opportunity is with Nexo and is, basically, a high interest savings account (HISA), when you deposit “stablecoins” with them. We’ll discuss stablecoins and this new investment under the Nexo heading below!


As noted above, our portfolio is up about 40% lifetime, but this is largely driven by our Ark holdings. Nexo has stayed relatively flat (well, lots of up and down, but it is currently sitting near where it started the year), while Ark has seen a 50% jump in value since January 1st, as can be seen in the below table:

Ark


Ark is a cryptocurrency that we can “stake” with miners to generate more Ark. We have our funds staked with the Biz_Classic miner and our initial 1106.90617458 Ark on January 1st turned into 1121.45352813 as of April 15th, like this:


Our Ark investment is currently tracking to return just shy of 4.6%, though that is without compounding. This is up from the 4.5% we were tracking to earn as of March 1st in our last blog post on the topic. Here's hoping the surge in Ark value is allowing for more benefits to flow through to the holder staking their coins with the miners!

Nexo


Nexo is a crypto-lending service that takes collateral in the form of crypto assets as a basis for providing loans. It is a great idea, but that’s not our interest in it. Our interest is in the fact that Nexo pays a dividend of 30% of its profits to its holders. We received one dividend in December 2018. Unfortunately, there is still no word on dividend #2. The first dividend was paid after Nexo was operating for 7 months. If that seven month period holds up for dividend #2, then we're looking at a date of July 2019 sometime, so it could still be a fair bit away.


However, Nexo has recently started offering a new financial service, a high interest savings account (6.5%) for certain "stablecoins" that get deposited with it. The 5 coins that are currently eligible for earning interest on are: Paxos Standard Token (PAX), USDC, TrueUSD, USDT, and Dai.


For those not in the crypto-know, you may be wondering what a stablecoin is, which is exactly what we wondered when we first heard of the offer. Basically, a stablecoin is a crypto coin/token that is linked to U.S. currency (I am sure there are other coins linked to other currencies, but the five mentioned above are all pegged to U.S. dollars). The link is generally done by token holders having an ability to go to the issuer and exchange the cryptocurrency directly for U.S. cash. The ability to always exchange it for U.S. cash means that the price should never, in theory, fluctuate from the value of the U.S. dollar.


After doing a bit of research, we decided to purchase $500 Canadian of TrueUSD coins, or about $372 USD. We bought the coins and deposited them in our Nexo wallets on March 12th, so we had over a month of interest earning. And we’re happy to report that, as far as we can tell, our account is accruing daily compounding interest at 6.5%. In 35 days our $372 USD had earned $2.19, as follows:



Swarm


There has been an interesting turn of events with Swarm.


When you dabble in the crypto-world, sometimes things move very quickly, and with little warning. In our last post, we talked about our investments on the Swarm platform and how we are very excited for what this platform could turn into, a place where you can buy stakes in non-traditional assets (or traditional assets in non-traditional ways).


As of our last post, we had one successful investment on the Swarm platform (The Art Token), and 2 pledges to ongoing campaigns (SparkLabs Smart City & Smart Planet Fund and Viejo San Juan Comunidad RE Fund). While working on this post we hopped onto our Swarm account to check how the campaigns were doing and to see if there were any other new ones. Or, rather, we tried to hop onto our account.


When we visited the Swarm website, they had changed it. After a bit of clicking around, we found a blog post (which had actually been emailed out earlier in the day, as well), explaining that they are shifting the Swarm platform whereby “[t]he existing platform is transforming into a blockchain-agnostic architecture enabling users to issue regulatory compliant cross-chain security tokens.“ Admittedly, this is kind of Greek to us, but you can check out the full blog post here.


What was particularly concerning was that there was no clear way to log into our account as we use to. And since we had both bitcoins and TAT in our Swarm wallet, for a moment we feared they had vanished. Long story short, in the end we did manage to find our way into our account by circuitous means and found our bitcoin and TAT in place.


However, our relief at finding our assets intact was dampened somewhat by the fact that Swarm only had one campaign left running as of the publishing of this post: The Art Token, which has 135 days left on it. So the very thing that attracted us to Swarm, being an easy to use platform that has a variety of investment opportunities, seems to have ceased, or to be changing.


We have no idea what this means for future campaigns on the Swarm platform, though it looks like it will stick around in some form or another. We hope more updates are forthcoming, because it was stressful fighting our way into our account, thinking our wallets had vaporized.


Conclusion


The turn of events for Swarm is disheartening, and the long wait for another Nexo dividend is boring, but we are still in the process of trying to identify new crypto-vestments that we can make! Some frontrunners right now are more proof-of-stake coins, like NEO, Dash and Tron. This is even more so the case now that Swarm seems to be pivoting to new ventures and may not offer the types security token opportunities that excited us so much. We hope to keep picking up different projects in the future.


We at Fiscal Frontiers are not investment advisers and our only goal is to report to you on the performance of investments we have made so that you can consider our experience along with all the other information available to make an informed decision on what is best for you. Crypto markets are largely unregulated and all of a particular investment could be lost.

 
 

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