The FCAT Files
Tales from the Crypto Challenge
By: Nicole Dodes and Robert Hoffman | January 26, 2022
Crypto currency is drawing more attention than ever before. Amid this high interest, FCAT recently hosted its fourth annual Cryptoasset Portfolio Challenge in late 2021. The event provides an opportunity to create and manage a mock $1 million cryptoasset portfolio, educating associates on digital assets while also encouraging a healthy competition. The latest iteration of the competition attracted a record turnout of 426 traders from across Fidelity engaged in 10,426 transactions over a 30-day period.
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This year’s challenge also introduced a new feature: Sherlock™. Sherlock is a data and analytics research service for institutional crypto investors developed by FCAT. Access to Sherlock helped Challenge investors access current information on the assets in which they were most interested. Sherlock overcomes the fragmented market for crypto information by providing many relevant data categories within a single, easy to use application.

After the winners were announced, we caught up with several of the participants to learn a little more about their individual approaches to crypto investing, what techniques they use to research and select certain crypto assets, and why they believe the crypto market will successfully evolve.


A 2nd place finisher in the Crypto Challenge, James Lindsey is a Workplace Planning Consultant in Jacksonville, Florida. James began investigating crypto over 7 years ago and has developed a focused discipline.

James: “I started investing in cryptocurrency in 2014 after a good friend passionately described what it was and how it worked. At the time it sounded like he was speaking a completely different language. But, after doing research, I too discovered the value it could generate.

“My approach [to selection] has always been based off the applicable use, the technology behind it, and the leadership in charge of development. I used Sherlock’s screener feature to narrow searches based on different parameters offered in the feature as well as the charts for technical analysis. I also use a variety of different sites for the latest news, as well as reading books to better understand the technology.

“The greatest challenge for me [in crypto investing] has always been the volatility, as well as developing a discipline to ignore the fear of missing out. I like that the Crypto Challenge is in real time. Adding more order types and having a way to estimate what the fees and tax implications would be would make it even more realistic.”

Nichole Dejesus is a Senior Quality Assurance Analyst working in Merrimack, New Hampshire. Working with a long-term view of the market, Nichole has developed a sophisticated, multi-level method of analyzing potential crypto investments.

Nichole: “I am a crypto holder. I’ve always been a fan of hard money, especially when understanding the downsides of the Keynesian economic model and having been an adult working person through the financial crisis of 2008. Once I recognized bitcoin as the discovery/invention of artificial scarcity it was a no brainer. I was a natural gold bug dying for a more viable expression of the tenets of that ideology.

“I value crypto the same way I value any asset I’m investing in; total addressable market based upon the solution the crypto asset posits to solve.

“I did use Sherlock to get some on-chain metrics and to help try and time my entry. Being able to see how many developers were working on a project over time was very helpful in identifying projects with expanding and contracting interest at the purest level.

“Social media is a great way of identifying the excitement developing around a crypto asset, but being a fundamental/value investor, I rely heavily on the amount of developer interest and the thesis laid out in the white paper. It’s also very important to identify the basic characteristics of the asset such as the total number of tokens (if there is a cap – and I hope there is) and the programmed inflation rate (if it is programmed, or how it works)

"Compiling all of this information has proven to be difficult as far as comparing the assets. It’s also difficult to identify the onramps into these assets. I also struggle reading the code, so I have to rely on conversational references from social media or the white paper references in order to gain an understanding of the intent/design of the asset.

“I like the whole concept of the Crypto Challenge. I’d like to see a longer timeframe. I am glad it’s a thing, though, and I’m glad to have had the chance to compete. I think it would be really beneficial to see what others had invested in, so we can learn from them and actually see what the big winners really were.”

Z Li is an Associate Systems Analyst working out of Westlake, Texas. Z placed 9th in this year’s Challenge. Z seeks answers to several fundamental questions before executing a buy.

Z: “I am currently invested in crypto assets. I was initially curious as to what all the fuss was about. Later, I wanted to understand Decentralized Finance and test the economics of each crypto project. I also wanted to explore Crypto Gaming and understand more about the “play to earn” mechanism.

“With the Challenge, my real-world experience did help me in making my investment choices. When I evaluate a potential cryptoasset I look at three key areas:

  • Does the project solve a real-world problem, and/or is the leader in adoption?
  • Is the Dev Team/Founder “visible”? Do they have a history/vision/roadmap?
  • Is the fully diluted market cap reasonable and/or do they have a plan on the use/distribution of “treasury stock”?

“I like Sherlock, as it aggregates many of the elements in one place. I also look to CoinMarketCap for links and basic information, Reddit for latest postings/discussions, Discord, Github, Telegram, and check for the number of active members/activities on the project. I will also go to the project’s official website for white papers and announcements. The amount of dis-information and fake posts are rampant. But the complexity and challenges bring opportunities for early value discovery.

“It would be fun to have a longer running competition. We can still do weekly/monthly competition, but longer running competition enable more long-term thinking and value analysis.”

The first-place finisher in the Challenge, Daniel Illg is a Brokerage Consultant in Merrimack, New Hampshire. As with any serious investor, Daniel invests his time and energy in careful research and trend analysis.

Daniel: “I currently own cryptoassets. I invested because of the tremendous upside potential, both short term and long term (equally optimistic). I believe crypto is the future of finance, gaming, etc., and will be the primary means of exchange going forward with the use of NFT’s. My real-world experience absolutely helped inform my investment choices in this challenge.

“I spend time on social media platforms getting a pulse on what is trending and what the scene is optimistic about. I then spend some time looking at the chart to see how the coin/token has been performing and where the support/resistance levels are. I then wait for a breakout. For the ones I feel I have a good read on, I will then trade the reversals.

“My research includes reading Messari, Coinbase Pro, Reddit, Discord. Understanding what the utility of a particular coin/token can be is difficult to understand if you’re not very technical. So, when researching, it requires quite a bit of study. I’m not very technical which is why I rely on social media and charts.

“I enjoyed the custom leaderboard that we created. My group had a few of us participating and I would send periodic updates which inspired some friendly competition.

Nicole Dodes is a Project Manager in FCAT Bitcoin Mining
Robert Hoffman is a Content Strategist in FCAT
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Investing in crypto assets, like the assets themselves, continues to grow and evolve with further developments in technology and applications. The challenge provides a unique opportunity within Fidelity for new and experienced crypto investors to study the asset category and test their investment theories. FCAT’s blockchain incubator is a key contributor to Fidelity’s research and development in the crypto space.

The views expressed are those of the associates interviewed and are not necessarily those of FCAT or Fidelity. The results of the Crypto Challenge are not representative. Digital assets are speculative and highly volatile, can become illiquid at any time, and are for investors with a high risk tolerance. Investors in digital assets could lose the entire value of their investment. The content of this article is purely educational and should not be considered investment advice or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any asset by FCAT or Fidelity. Sherlock is a mark of FMR LLC.
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