Similar to assets in traditional finance, this basket contains assets that have large market capitalization, a strong track record of adoption, and have an established history. These assets are not defined by any particular sector and provide broad exposure to well established crypto assets.
November 1, 2022
Assets with large market cap and a strong, established history.
Quarterly (by calendar quarter, not date onboarded)
Portfolio rebalancing will be performed at the end of the calendar quarter to bring allocations back to specified percentages. In the interim portfolio allocations will be subject to market volatility due to price movements.
Lower Risk*
*This risk level is only factoring in the risk of the digital assets.
BTC
30%
ETH
30%
LINK
20%
LTC
20%
Bitcoin is the world’s oldest cryptocurrency. It was originally conceived in 2008 by Satoshi Nakamoto. A year later, Bitcoin was launched, and after 14 years, the asset reached a market cap with a high-water mark of more than $1 trillion. In simple terms, Bitcoin is an online system of computers powered by blockchain technology that stores and processes financial data. All connected devices (called nodes) host a digital ledger with Bitcoin’s complete history of transactions.
Bitcoin (BTC) has a capped supply of 21 million tokens. The BTC halving schedule, the rate at which new BTC is created, is cut in half roughly every 4 years. At launch, 50 new BTC were generated per block every 10 minutes. After going through three additional halving events, currently 6.25 new BTC are generated every 10 minutes.
Ethereum is the second-largest cryptocurrency by market cap, and goes hand in hand with Bitcoin when studying blockchain technology. Although complex, Ethereum can be summarized in only a few words: a smart contract ecosystem. Smart contracts are an emerging technology that enables users and developers alike to interact on a blockchain network in a decentralized manner without requiring trust. Having the ability to execute a transaction based on preimposed rules is what makes Ethereum so versatile and long-lasting.
The more total Ethereum (ETH) that is staked, the higher the system-wide ETH issuance rate. There is no current capped supply and the current mining reward per block is 2 ETH + priority fees contained within the block. ETH rewards are distributed on a sliding scale based on the total amount staked on the network. Per the ETH Foundation, if 30% of the network staked their ETH, that would result in approximately 3% annual inflation.
Chainlink is a blockchain protocol operating a decentralized oracle network (DON) that seeks to bridge the gap between on-chain and off-chain systems. The project accomplishes this by creating oracles that connect to companies or blockchains via API and deliver real-time price data.
Chainlink (LINK) is used as a payment token to pay node operators for providing oracle services. It’s also used as a work token to be staked by node operators as collateral to provide oracle services. Initial supply is capped at 1 billion LINK tokens, with 35% going to investors, 35% reserved as incentives for network participants, and 30% allocated to LINK’s parent company.
Litecoin is one of the oldest cryptocurrencies and one of the first altcoins after Bitcoin. LTC was developed to deliver fast, secure, and low-cost payments. Created by Charlie Lee, a former Google Engineer in 2011, Litecoin is an open-source project that uses proof of work to verify transactions.
Litecoin (LTC) has a capped supply of 84 million tokens. Initially, a new block was generated every 2.5 minutes providing miners with 12.5 LTC in block rewards. Similar to Bitcoin, Litecoin block rewards are halved every 840,000 blocks (approximately 4 years). To date, there have been two halvings: August 2015, August 2019. The next halving is scheduled for August 2023.
This Basket contains the two most recognized cryptocurrencies, Bitcoin and Ethereum.
The Layer1 Basket focuses on cryptocurrencies that operate their own blockchain network.
The above material and content should not be considered to be a recommendation to invest in a basket or an individual digital asset. Investing in digital assets or cryptocurrency (collectively “digital assets”) is highly speculative and volatile, and digital assets are only suitable for investors who are willing to bear the risk of loss and experience sharp drawdowns.
Shrimpy Advisory is an investment adviser registered with the US Securities and Exchange Commission. Registration as an investment adviser does not imply a particular level of skill or training. Shrimpy Advisory exclusively provides investment advisory services related to investing in digital assets.
Shrimpy Advisory is not a broker-dealer, exchange, custodian, or wallet provider, and is not intended for frequent trading activity. The articles and client support materials available are educational only and not investment or tax advice.
Who Provides What Service?
Investment Advice: Advisory services for digital assets are provided by Shrimpy Advisory, an SEC-registered investment adviser.
Digital Asset Trading Services & Custody: Digital asset trading services and custody are provided by Gemini Trust Company, LLC. For further details regarding the custody of assets, including cash, held at Gemini Trust Company, please see your Gemini user agreement.
Risk: Investing involves risk and there is the potential of losing money when you invest in securities and digital assets. Past performance does not guarantee future results and the likelihood of investment outcomes are hypothetical in nature. Any past performance in the above material of digital assets do not represent the performance of a Shrimpy Advisory account and does not reflect the deduction of the Shrimpy Advisory fee. Regarding any instance of extracted performance, Shrimpy Advisory offers to provide promptly the performance of the total portfolio.
Investments in digital assets are: Not FDIC or SIPC Insured • Not Bank Guaranteed • May Lose Value
Before investing, consider your investment objectives and Shrimpy Advisory's fees and expenses. Shrimpy Advisory's internet-based advisory services are designed to assist clients in achieving discrete financial goals. They are not intended to provide comprehensive tax advice or financial planning with respect to every aspect of a client's financial situation and do not incorporate specific investments that clients hold elsewhere. For more details, see Shrimpy Advisory’s Form CRS, Form ADV Part 2A and other disclosures.
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