As a slight change to the regular schedule, this week’s newsletter edition shines a spotlight on the success of ByteTree’s Token Takeaway. We started this Premium series in June 2021, intending to highlight alpha generating investments for our readership. Our view is that the “alt” space holds alpha, while Bitcoin looks to be a great beta play.
Our key measure is the Token Takeaway Conviction Score, which rates coins from 0–5 based on a range of qualitative and quantitative measures. A score ranging from 3.5–4 should be seen as a trading signal, and 4–5 signals a longer-term leader. If readers had followed this methodology with $10,000 in each 3.5–4 coin, they would have returned 270% or $110,700.
The table below lists each token we’ve covered to date.
Most notably, Axie Infinity has been the darling of the series. The non-fungible token game, which empowers users through NFT monsters, the breeding of said monsters, and the trading of in-game currencies, has rewarded readers handsomely. It displays the true features of a winner, such as sector leadership, a great team and funding, and most importantly, its protocol revenue, which is ecosystem leading.
That said, our free subscribers were alerted to this mammoth opportunity way before Token Takeaway. In early April, we released “Forget Pay-To-Play. It’s Now Play-To-Get-Paid”, which showed our support for what is considered the prime protocol model. Since that first publication, the AXS token has risen nearly 1,500%.
Although Quant and AXS lead the bullish end of the series, it is important to recognise the model’s ability to spot tokens that are failing. The ethos of Token Takeaway is to search for leading protocols, but negative screening can help investors avoid the losers.
Mirror Protocol received our lowest conviction score to date. This was due to regulatory issues and the success of its competitor Synthetix. Since we rated MIR, it has dropped 30%. Sometimes a guide to protecting your capital is just as valuable as a shilling one.
Historically, a higher conviction has led to a better return. Axie Infinity, as mentioned, has returned 800%. Tezos, which scored highly on the conviction score due to the deep pockets of its treasury, has performed remarkably well after attaining a score of 4. Just a couple of weeks after its rating, the token hit an all-time-high price (returning over 40% to readers).
Assuming a $10,000 investment:
- Following a 4/5 conviction score would have returned $91,200 from $20,000. A profit of $71,200
- Following 3.5/5 and above would have returned $110,700 from $40,000. A Profit of $70,700
- Ignore 3/5 and below would have protected $4,000 of investors capital.
- Overall, following each asset score would result in no individual losses and $70,700 profit.
Token Takeaway aims to cover an asset each week, but covering tokens for the sake of it does not generate value for our readers. In recent weeks, we have abstained from covering a token due to the state of the market, but rest assured, when alpha returns to the alt market, Token Takeaway readers will be the first to know.
If the alt world interests you as an investor, you simply can’t ignore Token Takeaway. ByteTree Premium subscriptions start from just $33 a month, which is a bargain considering the industry insight you will gain. A token will be covered this Thursday, so make sure to check in.
In other news, make sure to stay tuned with an upcoming model portfolio for Token Takeaway. Another reason to subscribe to our premium product.
This article was written by Tom Salter, Digital Asset Analyst at ByteTree. The article has been cross-posted from our website, originally published on 13th October 2021.
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