As noted in a post last year, we dipped our toes into the world of cryptocurrencies. Why on earth did we do that? Perhaps a slight case of fear of missing out (FOMO), but also the belief that the technology (and perhaps some of the coins) will survive (and thrive?). It was also a lot of fun with the massive volatility. Where are we today?
The way we got into cryptocurrencies is via de Combicoin. I can hear you think, what was that Combicoin again? It’s a token that is developed by a few of our fellow countrymen that derives it’s value from the top 30 cryptocurrencies. It’s kind of a crypto ETF. We liked that idea of a diversified token so we bought a few back in late November of 2017 (at about $15.3 after fees).
The problem with this token is that the company that issued it is new and is still developing the software to trade the token. On top of that, the company wants to stay out the of crosshairs of the government (and financial regulatory bodies). So they temporarily stopped the sale of the coin.
However, they did stick to their promise that you would be able to sell the coin (if you’d already bought some). Ok, it was a bit later than late January, but at least for existing token holders you now have the opportunity to cash in. So this is what we have done. Or at least are still trying to do. Let me explain.
When we bought the Combicoin, we could do so without the need to register for an exchange account (i.e. Coinbase, Kraken, Binance, etc.). Which was nice & easy, because most exchanges had issues with the large volume of traffic and transactions. But when we got the news we could sell, it appeared to be a rather cumbersome and complicated process (that being said, Triaconta have done a good job in describing the process). We are still trying to complete the transaction, now already a week in progress!
Because we only had tokens in our wallet, we could not send them to Combicoin to sell. You have to pay network transaction fees for this. So we first needed to open an exchange account, this took a couple of days to organize and get approved for trades. Next we bought ETH (Ethereum) for about €20 and transferred to our online wallet that contains the combicoins (it’s a myetherwallet).
Once we received the ETH in the online wallet, we could finally send the Combicoins to Triaconta for them to sell. This was completed last Friday (including the sale of the Combicoin themselves). However, we won’t get money back! No, we will get more ETH……. We should get his deposited into the online wallet today, next it has to be transferred to our account at Kraken. From here we have to sell the ETH for Euros. These would then need to be transferred to our bank account in the Netherlands. Damn! That’s a lot of effort to sell a few tokens!
If everything goes well, and the value of ETH stays stable, we should end up with a net profit of
around €900-ish €1.032 (UPDATE 20-02-2018: all ETH is sold and € are in the account!). Not bad on a initial €1.000 investment in just 2,5 months. That being said, the costs for trading and investing in Combicoins are not cheap. The fee to purchase the Combicoins was 5%, the associated sale was another 3.5%. That’s quite substantial.
Then there are the fees for the network transfers from myetherwallet to TriaConta, those are not too bad. But the relative fees for small transactions from Kraken to our myetherwallet was huge (about 0.005 ETH or €3.75 at time of writing). In the grant scheme of things, to total transaction fees will be around €100 from start to finish, or 10% of our invested amount.
I’m still debating what to do with the ETH, perhaps I will sell about €1.100 worth (so we make 10% return on our initial investment). With the remainder I could play around a bit and see if I can use the volatility to my advantage (yes, that’s timing the market and I suck at that!). Or I can just cash in on everything and take a 10 week holiday, well fund a small portion of it anyways. Perhaps I should to do the sensible thing….
I still like the concept of the crypto ETF that is called the Combicoin. We might get back into it once they get all their ducks in a row and the crypto market matures.
However, the crypto market seems to be moving as a whole. Yes, there are varying degrees of profits/losses per coin, but they generally move in the same direction at the same time. This makes paying for a crypto ETF a bit of a waste. You might as well just buy some of the underlying cryptocurrencies yourself, would probably be cheaper! It would also be much faster to buy and sell, at least at this time.
How are your crypto investments doing? What’s your plan?