Crypto Academy Season 3 Week 3 Homework Post for (@allbert) - DCA to create a Portfolio

3개월 전

Hello everyone. I am @hibbanoor. Another amazing lecture was delivered by the professor @allbert. This lecture' main focus was DCA and rules for creating a Portfolio. I am going to do the homework for this week.

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1-Select two Crypto, perform fundamental analysis, and based on your fundamental analysis explain why you chose them. Exclude BTC, ETH, RUNE. Develop and justify your answer. Be original. Screenshot (789).png

The analysis are performed before making investment to predict the next market movement. The analysis help us to predict the future market price market trend and many more. By using this information, we determine whether to invest in market or not.

Some people use the technical analysis while some prefer the fundamental analysis. Both have their own cons and prons. I prefer the fundamental analysis and will analyzed two coins as per homework requirement using fundamental analysis. The coins are XRP and Cardano.

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XRP Fundamental analysis.

XRP is at number 6 in the list of crypto currencies. The historical maximum of XRP is 3.2 and this is supported by the well known companies. The crypto graphy technique is used in this project which make this more trustworthy and reliable.

The basic purpose of this is to improve the transaction process of crypto coins. This was introduced to replace the bank and provide a fast and secure system to the investors to transact the crypto coins between multiple countries. This coin was introduced to minimize the limitation of bitcoin.

Reliability

The XRP is an old and trust worthy project. The cryptography is used in XRP to protect the privacy of investors. It is an open source protocol which run on DLt technllcogy. It does not work on blockchain.

Market capitalization

The XRP is on top 6. The market capitalization of this coin is $27,354,936,392. The market price of this coinis

Total supply is = $99,990,343,580

Maximum supply is = $100,000,000,000

The circulating supply is =46.22B XRP
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Scalability

The XRP have a very high scalability. You can transfer the any crypto coin to a person within a few second. The transaction speed is very fast while the transactions fee is very low. A pause of 4 second is there between two transactions in this network. You can read more about the scalability f XRP by visiting the link.

Development team

The XRP has a very solid and experienced team behind it. The XRP was introduced in 2012 by the Jed McCaleb, Arthur Britto and David Schwartz. They wanted to facilitate the world with a feasible coin to make the payment method more fast and secure. The Chris Larsen joined the team and they built a new company named as newcoin in 2012 just a few month after the invention of XRP. Source

XRP chart

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In the above graph, we can see that the price of this coin is fluctuate. Some time there is a rise and some time it fall down. There was a huge rise in price of this coin in first week of April and After mid of May, the price started falling. Now market is at its downtrend.

Exchange Market

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This coin is listed more than 200 exchange market in which Binance and Houbi are at top. This is listed on well known and most famous exchange platforms which shows that this is reliable and good currency to invest.

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Fundamental analysis of Cardano (ADA)

This coin was introduced in 2017. It is third generation public blockchain. The basic purpose of this project was to improve the problem which were there in second generation crypto coins. The people use this to create the smart contract.

The ADA has become a famous and most attractive coin to invest. The price fluctuate and hence the chances of reward increases. Moreover, you can earn reward by staking your coins. Its mean that you do not need to invest your money. Just hold coins for a specific time period and you will be rewarded in return.

This project is created by highly experienced and expert team which was lead by the Charles Hoskinson. The basic goal was to solve the sustainability issue which were there in Ethereum project.

Reliability

The proof-of-stake consensus algorithm is use here to ensure the reliability and security. Here there is no concept of energy usage while mining process. Instead of that, the investors can mine as much as they have coins. Moreover, the security of this system is ensured by the implementation of Ouroboros. This protocol make the system decentralization and enable the users to perform transactions without involvement of third part. This attract the investors attention as they feel free and more secure as they know no third person can have access to their personal information.

Market capitalization.

This is top fifth crypto currency in the crpyto world. The market capitalization of this currency is $39,139,010,629. The market price of this coin is 1.22$.

Total supply is = $32,844,877,815

Maximum supply is = $45,000,000,000

The circulating supply is =32.04B

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Development team.

As i mentioned above that this project was created by a well experienced team. The leader of that team was very talented and popular Charles Hoskinson.

Trading view of ADA

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The above graph show that how the price of this coin fluctuate. There are rise and fall in market trend. There was a bullish trend in market In mid of May. The price rise and market was at its uptrend But currently, market is facing the downtrend period.

Exchange markets

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Cardano is listed on the most famous and well known exchange market which show how reliable and popular this coin is. This is listed on Binance, coinbase market, Huobi global, Binnace, kraken and many others.

You can read more about Cardano from Link1 and Link2

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2- Through your verified Exchange account (screenshot needed), make a real purchase of one of the cryptocurrencies selected in the first assignment and explain the process. The minimum investment must be 5USD (mandatory) and must present screenshots of the verified account and the whole operation

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I have decided to buy the Cardano using the Binace exchnage platform. Just some simple steps are there to follow to done the process.

1- Open your binance exchange platform.

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2- Click on market.

3- From spot market, choose the Fiatmarket.

4- Search for coin you want to buy.

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5- Enter amount you want to purchase.

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Click on Buy button and your buy process is complted.

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Finally, make a simulated exercise, using the DCA method to perform the purchase of two assets and present charts showing the data of days in which the operation was performed, price of purchases, average price, sell point, percentage of profit or loss. (include screenshots)

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Trading Dogecoin /USDT Using DCA Strategy


Suppose i made the 8 purchases from in the April 10 to July 1rst.

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1- purchase(14 April)

First time i purchased the Dogecoin on April 14 in 0.25 USDT.

2 purchase(25 April)

Second time i purchased the Dogecoin on 25 April in 0.35USDT.

3 purchase(3 May)

Third time i purchased the Dogecoin on 3 May in 0.48USDT.

4 purchase(13 May)

Fourth time i purchased Dogecoin on 13 May in 0.51USDT.

5 purchase(20 May)

Fifth time i purchased Doge coin on 20 May in 0.35USDT

6 purchase(4 June)

Sixth time i purchased the Dogecoin on 4 June in 0.38USDT

7 purchase(22 June)

Then next time i purchased the Dogecoin 22 June in 0.188USDT

8 purchase(1 July)

Last time i purchased the dogecoin on July 1 in 0.27USDT

As we know that now we need to calculate the average price to find out whether we purchased the coin in profit or lose. Then we would compare the average buying price will current buy price. If price will be high than current buying price, then it's mean we were in lose. And if the current coin price is higher then the price at which we purchased in past, then its mean we are in profit. The avarage price of all my purchases in obtained by adding all the purchases by dividing to 8.

0.25+0.35+0.48+0.51+0.35+0.38+0.18+0.27/8

Average price=0.34

Dogecoin price=0.1902

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The above calculation shows that the average price at which we purchased the coin is quite high as compare to the current price of the Dogecoin. The best time to buy the coin is when the price of coin is low and the market is at the downtrend. And the best time to sell the coin is when the price is high and market is at uptrend. This is almost 75% lose of money if we compare the average price with current price.

But in above case, i made the lose because i purchased the coins at average high price. We should always buy the coins when the average price should be less than the current coin price. The lose should be minimum so always buy when the market is downtrend. The downtrend is best to buy the coins. And uptrend is always good to sell the coins.

In the lecture, professor has been mentioned that the DCA method is the trading of coins. This trading is done in the continuous way.

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Trading Polkadot /USDT Using DCA Strategy


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1 purchase(10 April)

First time i purchsed the Polkadot on April 10 in 39 USDT.

2 purchase(25 April)

Second time i purchased on 25 April in 28USDT.

3 purchase(13 May)

Third time i purchased on 13 May in 36 USDT.

purchase(18 May)

Fourth time i purchased Polkadot on 18 May in 28 USDT.

5 purchase(29 May)

Fifth time i purchaed Polkadot on 29 May in 18 USDT

6 purchase(10 June)

Sixth time i prchased on 10 June in 20 USDT

7 purchase(22 June)

Then next time i purchased the Polkadot coin 22 JUne in 14 USDT

8 purchase(6 July)

Last time i purchased the Polkadot coin on July 6 in 15 USDT


As we know that now we need to calculate the average price to find out whether we purchased the coin in profit or lose. Then we would compare the average buying price will current buy price. If price will be high than current buying price, then it's mean we were in lose. And if the current coin price is higher then the price at which we purchased in past, then its mean we are in profit. Now we will calculate the average price of the buying price. The average price of all my purchases in obtained by adding all the purchases by dividing to 8

39+28+36+28+18+20+14+15/8

Average price=24.75

Dogecoin price=13.37

The above case show that the average price is quite high as compare to the current price. It is almost double to current price. It's mean that i bough the coins at high price. I bough the coins in market uptrend.

As we talked above, the current price is higher than the average price. It's mean that we are in lose. We purchased the coins when market was in bullish trend. And bullish time is best for leaving market and not for entering into market.

The DCA strategy teach us that we should always buy the coins when the market is at low price. When market is downtrend, that the best time to enter into the market. And we should sell the coins when market is at uptrend. That the best time to make profit.

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Conclusion

In this lecture, i performed the fundamental analysis of Cardano and XRP. Then i perfomed the steps to buy the Cardano using the Binance exchange platform. Then i explained the DCA strategy using the Polkadot and Dogecoin and explain the lose and profit margin by supposing a scenerio.

Thank you so much professor @allbert.

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