Combicoin Update

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?

Combicoin Update

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).

Combicoin Update - February 19 Overview

Combicoin Update – February 19 Overview

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.

Selling Process

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).

CombiCoin Update - Ethereum

CombiCoin Update – Ethereum

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!

Crypto Profits

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….

Crypto Thoughts

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?

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18 comments

    1. Good question! Simple answers:
      A: I did not know that this was possible!
      B: I had a colleague that we using Kraken and who was fairly positive about it. Already had the account partially setup when we were able to sell the combicoins, was the quickest ways to continue (based on what I knew at that time).
      Thanks for the comment!

  1. I didn’t know about Combicoin. It sounds like a cool idea to my, albeit a bit of a hassle to trade (as per your writing!). I know there are a few crypto ETFs in the making, that would enable investors to trade on regular exchanges but as far as I know none of them are active yet.

    My own crypto is held in a hardware wallet, where I hold the private keys i.e. am in full control of the assets. A small part of my holdings is on an exchange, with some sell orders waiting to be executed. They are set at higher prices than we are currently at, meant to take profit and reduce my cost basis/risk. On top of that, I do occasionally daytrade with a small sum of money, taking advantage of the volatility and consequently also lowering my cost basis in these coins.

    1. Sounds like you are having fun! Guess it has been profitable for you too, holding and trading with crypto’s?
      We do indeed still like the combicoins, the Philosophy is smart and the rebalancing is a good strategy too I think. But the fees and the hassles would prevent us from doing it again soon. Perhaps the future holds some interesting developments.

  2. Interesting read! I’ve delved into C20 coin for a bit (crypto20) and it has the same principle but more like an actively managed fund. I’m shocked about the costs at Combicoin! I guess it’s better to just buy some big coins now the market has gone down as a whole then proceed with such a coin..

    1. Hello Mr MF, think you are on the same page here. It seems to be a smarter idea to buy individual coins yourself, than to buy these actively managed coins/tokens. Have to check out that C20 coin, curious to see what that is about.
      Thanks for the comment!

  3. Interesting report, Cheesy Fin. Though the combicoin idea sounds better (due to crypto diversification), I will not be investing in it because I don’t understand the whole subject. Maybe I am missing out on a potentially big asset class in the future, but that’s not until the dust settles a ‘bit’ (pun intended) on these coins.

    1. Fair enough, there is definitely a lot of noise right now in this market segment. Not sure where it will go, only time will tell (but I could not resist trying!)

    1. It just might indeed, can you imagine if we would have gotten in a lot earlier? A colleague of mine noted ETH back in 2016 and we discussed buying it, was still trading around $10 at the time…… he since has left the company, should still ask if he bought any!

    1. Mostly percentages, the 5% and 3.5% fees for the Combicoin are a given irrespective of the amount. The “remaining” 1.5% are all the combined fees for other transactions and exchanges of coins vs euros, but these will change depending on the amount you transfer/exchange.

  4. Interesting Cheesy. I’d never heard of a combicoin before, but that’s not saying much. I’ve purposely avoided these digital coin investments — it looks too much like gambling to me.

    That, and they’re used to fund criminal activities outside the normal banking system. Those things I certainly don’t mind missing out on.

    1. To a degree I share your sentiment, but I could not miss out on some juicy returns and gave it a shot. Not sure what the future will hold on this sector, but I will keep an eye on it for sure.

    2. I read that whole “funding criminal activity” thing a lot regarding crypto. But if that is your reason for not using in it, you might as well stop using currency all together or oil or gold for that matter. They are ALL used to fund criminal activity. Just my 2 cents.

      @TeamCF: Good for you, cash out and enjoy 🙂

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