As time goes by and my understanding of the market deepens, the dollar-cost averaging (DCA) strategy, especially the investment portfolio, may undergo significant changes. This is why I labeled this as Part One in the title. If the DCA strategy changes, there may be Part Two, Part Three, and so on. Of course, I will also explain the reasons for any changes.
This year, I’ve been focusing more on investment topics, partly because I’ve lost some money through reckless trading.
Recently, I’ve been heavily influenced by Li Xiaolai’s ideas. The theory behind the DCA strategy is quite exciting. You can delve deeper into the topic through the following resources:
Besides DCA, here are a few other investment references:
I want to practice the DCA investment method, which involves addressing several questions:
I did not blindly follow the selection and proportion of targets in Li Xiaolai’s BOX. Initially, Li Xiaolai’s BOX had a high proportion of EOS, which proved to be a failure, so EOS is no longer included in the BOX. Currently, the latest situation is that BTC accounts for 92% of the BOX’s composition. Additionally, XIN has always been a component of BOX, showing that personal biases can influence decisions, as most of us probably don’t even know what XIN is, while Li Xiaolai has consistently chosen this coin for years.
The targets and allocation proportions I chose are:
| No. | Target | Proportion | Tag | Risk | Max Supply |
|---|---|---|---|---|---|
| 1 | BTC | 50% | PoW, UTXO | Low | ✅ |
| 2 | ETH | 10% | Smart Contract Platform | Medium | ❌ |
| 3 | LTC | 5% | PoW, UTXO | High | ✅ |
| 4 | DOGE | 5% | PoW, UTXO | High | ❌ |
| 5 | BCH | 5% | PoW, UTXO | High | ✅ |
| 6 | ADA | 5% | PoS, UTXO | High | ✅ |
| 7 | SOL | 5% | Smart Contract Platform | High | ❌ |
| 8 | FIL | 5% | PoSt | Very High | ❌ |
| 9 | TON | 5% | Smart Contract Platform | Very High | ❌ |
| 10 | XMR | 5% | PoW, UTXO | Very High | ❌ |
(Updated on 2024.09.26)
You can view this collection of coins in this public Watchlist, which links to the CoinMarketCap website. You’ll notice that nearly all of the coins have a market cap ranking within the top 100, following the fourth principle from “Some Small Tips for Crypto Investing”.
In my DCA portfolio, BTC is always the top choice, making up 50% of the total allocation. Additionally, five PoW coins make up 20% of the portfolio, meaning PoW coins collectively account for 70%. Most PoW coins have a capped supply.
Due to the saying “Bitcoin is gold, Litecoin is silver,” LTC has been relatively strong. DOGE and LTC are like close allies, sharing the same mining algorithm. The mining pool mines both of these coins simultaneously, so the prices of LTC and DOGE cannot be simply estimated like the “shutdown price” of BTC miners. Moreover, DOGE is the leader among memecoins, has a long history, and is favored by Elon Musk, making it hard to ignore. Thus, LTC and DOGE are included together.
BCH emerged as a workaround for high transaction fees during the Bitcoin Cash era (2017). Has the Blocksize War truly ended? BCH represents the large block faction, so it is included here. BTC has moved away from its “electronic cash” purpose to become a “store of value.” I believe the debate on this issue is not entirely over. BCH later forked into BSV, so why isn’t BSV included? BSV’s ecosystem is small, and it includes some active but uninformed projects (like Note). Additionally, BSV’s founder is wanted by the authorities, among other reasons.
DASH and XEC are the least justifiable choices, being so obscure that many people have never heard of them, and they are also the highest risk. XEC is included because the node code of BCH is forked from XEC’s code, which suggests that XEC has decent technical capabilities. DASH is a fork of LTC and was more of a filler choice because many old wallets, like Unstoppable, primarily support PoW coins, and DASH is among them. Additionally, Binance’s mining pool service supports only a few coins, including DASH, so DASH is included as a high-risk alternative for “electronic cash.”
Then there’s ADA, which has strong academic credentials and a pure PoS consensus model using the UTXO model, making it an alternative to BTC in the PoS consensus space. Moreover, ADA’s technology is continuously updated, and if PoS wins out one day, ADA is undoubtedly a key player. Therefore, I anticipate a better future for ADA.
FIL, on the other hand, falls under the category of distributed storage. Computer science has two major directions: distributed computing and distributed storage. ETH claims to be the “World Computer” and takes on the role of distributed computing, while FIL is the leader in the storage space. It’s worth noting that libp2p was developed by Filecoin, and many blockchains like ETH use the p2p module directly from libp2p. Additionally, the widely used IPFS was developed by Filecoin Labs. Thus, FIL has strong research and development capabilities, and there might be a day when it achieves significant breakthroughs.
Finally, we have the smart contract platforms. Honestly, I don’t like smart contracts much; many people equate smart contracts with blockchain or think that only blockchains that support smart contracts are true blockchains. When it comes to holding coins, coins on smart contract platforms are merely fuel without a capped supply, so why bother hoarding them? However, smart contract platforms are popular, have many users, and their prices remain high. ETH, SOL, and TON all support smart contracts and are currently highly watched, so I allocated some proportion to them.
Additionally, here are the reasons some popular coins were not included:
| Coin | Reason for Exclusion |
|---|---|
| BNB | It’s a platform token, not a chain. |
| DOT | No max supply, high APR. |
| ATOM | No max supply, high APR. |
| AVAX | No max supply, no obvious advantages. |
| APT, SUI | BFT consensus type. |
| All ERC-20 tokens | Not chains. |
| All Memecoins | No long-term value. |
| Inscriptions, Runes | BTC transaction fees are too high. |
Wish myself good luck!
XEC and DASH have been removed from the original portfolio. In the previous selection, XEC and DASH were already two assets with insufficient reasons for inclusion, and their total market cap rankings were around 100 or even lower, with poor community engagement.
More importantly, XMR is now used to replace the combined 5% allocation that was previously held by them. XMR is one of the main currencies used on the dark web, which only accepts BTC and XMR. XMR has strong privacy protection features. In the dark web’s application domain, XMR, XEC, and DASH are frequently discussed together as three comparable cryptocurrencies. If we were to choose one from these three, XMR would be the first choice.
| 10 | XMR | 5% | PoW, UTXO | Very High | ❌ |