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Health, Wealth, and Happiness

March 6, 2024

“Know what you own, and why you own it.”

- Peter Lynch

Howdy, investors!

What's the ideal crypto portfolio?As bitcoin set new record highs this week(briefly passing $69,000!), today we dip into Modern Portfolio Theory (MPT) to find the ideal mix of crypto and traditional investments.

The ups and downs of bitcoin are legendary—leading to huge wealth as well as huge wipeouts. Learn about those who rode bitcoin to its new record highs, and those who bailed and missed out.

Spot bitcoin ETFs have seen massive inflows. Some laggards on Wall Street, however, may be holding back these funds by failing to promote new crypto products. We'll reveal who you should avoid.

The SEC is at it again, delaying the spot Ether ETF applications put forward by BlackRock and Fidelity. Meanwhile, Ethereum staking is going through the roof (see our chart below).

Read on!

Modern Portfolio Theory and Your Crypto Investments

by Anatol Antonovici

What’s the ideal mix of traditional investments and crypto investments?

While bitcoin and other crypto investments offer the potential for outsized returns, they also hold outsized risk.

At Bitcoin Market Journal, we aim for a balanced investment strategy that minimizes risks as much as possible.

To help us find the ideal portfolio, we've recently turned to Modern Portfolio Theory (MPT).

MPT is about achieving the optimal balance between risk and reward through diversification. Rather than going “all in” on bitcoin, we balance the wild fluctuations of crypto with more traditional investments. MPT helps us find the right mix.

In our new guide, we explore two types of investor personas: the balanced investor and the crypto bro. Who’s the winner? Spoiler: it’s the one who’s using the MPT approach.

Learn the ideal mix of traditional and crypto >>

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New Investor Scorecard: Arbitrum (ARB)

Arbitrum is Ethereum's most successful Layer-2 scaling solution by Total Value Locked (TVL).

As Arbitrum has quickly risen to become one of the top scaling solutions for Ethereum, its ARB token is currently less than 10% from an all-time high.

Our Investor Scorecard uses our industry-leading framework to determine if the Arbitrum project is worth your time. We filter out the hype and noise behind the token, focusing on the fundamentals.

Premium members can download the Arbitrum Investor Scorecard here to find out what our analysts say about investing in ARB.

Are you not yet a Premium member? Sign up now to access our complete library of tools and tips for better crypto investing.

Must Read

Today's most important stories for crypto investors.

The Believers Who Rode Bitcoin to a Record High -- and the Ones Who Missed Out (The Wall Street Journal)

Finally, the Journal is covering crypto correctly. (The other Journal, not this one.) As you read the stories of these real-life crypto investors, you'll laugh, you'll cry, you'll be thankful you are a faithful long-term investor (and Bitcoin Market Journal subscriber).

Wall Street’s Cold Embrace of Bitcoin ETFs Comes With a Catch (Bloomberg)

While spot bitcoin ETFs are the new darling of TradFi, some brokerages like Merrill Lynch and Wells Fargo are only offering access on an "unsolicited basis," meaning financial advisers cannot proactively suggest these products to their clients. Investors may want to steer clear of these old-school advisories.

SEC Delays Spot Ether ETF Applications From BlackRock and Fidelity (The Defiant)

The U.S. Securities and Exchange Commission (SEC) has postponed its decision on the Ether ETF applications from BlackRock and Fidelity, citing concerns about Ethereum's PoS mechanism and its potential vulnerability to centralization. More delay tactics = more time to load up on ETH.

Chart of the Day

Daily Trade Volume for Decentralized Exchanges (DEXs)

Courtesy Token Terminal

Liquid staking continues to climb the charts (see our guide to Liquid Staking here). Money continues to flow rapidly into the sector, as in the chart above, which shows daily net deposits for some of the top liquid staking platforms.

We continue to be impressed with Lido Finance (LDO), which has run away with the market by making Ethereum staking simple and user-friendly. These are the current leaders in a market segment that we predict will only grow from here.

ICYMI