Premium Daily Crypto Newsletter

May 10, 2018

Crypto Market Commentary

Markets Have Another Painful Fall

-10% for the week

In a largely technical move, we saw the market take a 3% nosedive over the course of an hour. Right now there is too much sell pressure. Bitcoin Futures are likely adding to that pressure. There needs to be more buy volume for altcoins but the market has clearly lost the bullish confidence we saw throughout much of April.

Thankfully, even if the market doesn’t reflect it, we can see the light on the horizon.

We’re especially excited for Coinbase to lead the industry into further mainstream adoption through its new custodial services solution.

 

In a recently released letter, they highlighted how they have worked hard to achieve greater efficiencies, including:

  • database management
  • caching to reduce load on its databases
  • an overhaul of its APIs
  • and substantial re-architecting of its code base.

 

According to their CTO, these efforts and others have resulted in a 1000% increase in transaction capacity relative to Q3 of 2017, and he expects this to double in coming months.

 

This, in combination with hundreds of new hires, points towards a very interesting and exciting upcoming announcement: mainstream custodial services managed by Coinbase.

 

They already announced their custody program some time ago, so while that’s not exactly new, what we suspect will happen is that credit unions and banks will now be able to offer the Coinbase index fund to their customers. The index fund, which tracks the four coins that trade on Coinbase, has normally only been available to US accredited investors. However, through this custodial program, we suspect that average investors can invest into it through their bank.

This is a big step forward for the industry as many retail investors and people who do not actively invest are not interested in owning cryptoassets. Keeping track of coins simply does not appeal to those who have a hard enough time with technology in general.

 

Furthermore, the average person does not invest in individual stocks. Funds are popular simply because they diversify risk. With a space as volatile and risky as crypto, diversifying risk is absolutely desirable.

 

With this new Coinbase program, people will be able to invest in cryptocurrency without having to own or manage the underlying assets, which is unquestionably a step in the right direction. After all, most people would prefer to invest in a Gold ETF or Gold stock instead of actually buying the physical precious metal, although some people certainly do that.

 

While Coinbase recently valued itself it 8 Billion, up from the 1.6 Billion valuation it last reported, it is quickly seeing new competition.

 

Stock trading app Robinhood is now valued at $5.6 billion after its large funding round.

 

The startup announced that it had raised $363 million in a Series D funding

 

“At Robinhood, we’re guided by the belief that America’s financial system should work for everyone – not only the wealthy,” the company said in a statement. “Our platform has also grown significantly, reaching over four million users, cementing Robinhood Financial as the fastest-growing brokerage ever.”

 

“We expect by the end of the year to be either the largest or one of the largest crypto platforms out there,” Robinhood co-founder and co-CEO Baiju Bhatt told Fortune. “But we also really feel we’ll have the absolute best experience for investing in crypto as well—from having a large variety of coins available to a more favorable cost structure—mainly no commissions—to just quality of product.”

 

Robinhood and Coinbase aren’t the only two players gunning for this lucrative retail market. Fintech startups Square and Circle Invest each hope to capture this market demographic as well. It will be great to see how competition in this space benefits us as the end-users.

 

Meanwhile, the NASDAQ Chief Executive, Adena Friedman, cotinued her praise of cryptocurrency. She stated that cryptocurrency is the next step in the space of currency, but cautioned “the jury’s still out” on which one will actually see mass adoption.

This comes after last week when the NASDAQ, the world’s second largest stock exchange with a market cap of $9 trillion, openly stated they’d consider becoming a cryptocurrency exchange.

Friedman on the state of crypto:

“How it evolves and which of the cryptocurrencies may or may not be the one that ultimately gets embraced, I think that really the jury is still out on that. But I do think the idea of a more globalized payment mechanism that is more efficient than what we have today allows for money to transfer across countries and certainly supports the Internet economy.”

 

In a similar tone, Michael Novogratz of Galaxy Digital spoke to a crowd of 700 at the Fluidity Summit, saying “this has been the people’s revolution.”

 

He added, “we have never had a market mania led by retail before.”

 

Novogratz announced yesterday the deal between Galaxy Digital and Bloomberg to create the Bloomberg Galaxy Crypto Index, which tracks the most liquid assets trading on blockchains.

“I’m hoping yesterday marks the beginning of the institutionalization of crypto as an asset class,” Novogratz said, because “big problems need big capital.”

“The decentralized revolution is going to have its biggest impact in the retail sense,” he said, “but to get there it will take the investment power of the big institutions.”

 

Speaking of big institutions, Li Ming, who is director of the Blockchain Research Office at the standards institute in China, stated they will seek to release nationwide blockchain standards by the end of 2019.

 

Beijing does not expect the new legislation to “quickly advance the development of the [blockchain] industry” in China, but, “it will give the industry some guidance.”

 

“The development of blockchain technology may become an important step for China to grasp global technological competition.”

 

This is what we’ve been saying would happen regarding China and Blockchain all along. China is going to do it how China wants to, just like the Internet. They’re not going to let foreign-based cryptocurrencies, like Ethereum, come in and disrupt the order they intend to keep. They’re going to promote home-grown solutions like NEO, Waltonchain, and Vechain. They’re going to have an emphasis on digital identity because of the concerns over illicit activities and capital flight from the country. Time will tell if they can truly maintain the status quo they’re trying for, but China will likely become one of the biggest players in the blockchain space and how the Chinese government moves forward will be extremely important for the space.

 

Overall, this has been a rather lackluster week in the markets after a few fun weeks, but hopefully, it’s clear that the good news for crypto hasn’t stopped and we’re anticipating more is to come. Hang in there as brighter days are ahead.

 

Talk to you tomorrow.

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Offense – Adding Trades

Offensive Actions for the next trading day: 

  • None.

Defense – Managing Risk

Defensive Actions for the next trading day: 

  • None.

Current Portfolio

https://docs.google.com/spreadsheets/d/1Tv_zMZDRm0uJlxxG3_YBIAiGT7vAOE_AUAwQyiRKP5c/edit?usp=sharing

 

Desired Holdings

How to read this portfolio: Please click on the Chart Key tab above for definitions and color codes. The colors correspond to our 7 categories in the graphic below.

 

None.

None.

Tier 2

MOD

 Tier 3

REQ

SUB

LINK

NANO

KNC

Tier 4

BNTY

TAU

WISH

PHR

LOCI

XBY

ELA

ECC

POE

HPB

BIX

EVE

XVG

NULS

DNA

How to read this portfolio: Ticker: Contains the ticker code for the coin. You can search this ticker in Coinmarketcap to learn more about the coin. The color denotes the risk tier by our evaluation. Dark Red = T1, Dark Green = T2, Dark Blue = T3, Light Blue = T4 (Colors in the Ticker column do not interact with the colors in the other columns) Cost Basis = Our average purchase price for this coin. Current price = The average price of the coin based on the exchanges it is listed on. Strategy = What we plan to do with this coin. Staking is receiving dividends for that coin. Master node is also staking, but with a higher return rate for having a (large) number of that coin. Stop = Our exit point, if it exists What do the colors mean? The colors in the ticker column represent the risk profile of that coin. The colors in the other columns reflect what sector(s) that coin belongs to. Some coins belong to multiple sectors, which is indicated by multiple colors. The colors correspond to our 7 categories in the graphic below

Tier 1 coins are those coins which we have considerable assets invested, are firm believers in the project direction and execution, and have very little reason to sell within short to mid term. These are coins which we risk evaluated to be very solid, and have a high probability of existence duration.   

NEO

NEO ($NEO) is classified as a Dividend and Platform coin. As our largest holding, we believe NEO has the potential to become a dominant smart contract and DApp platform in 2018. It’s four most compelling features are:

  • An innovative consensus algorithm which will allow for greater TPS (transactions per second) over its competitors.
  • A dividend structure for holders, incentivizing coin retention and network stability / diversity.
  • SE Asia location, enabling NEO to break into markets more easily than competitors.
  • Agnostic smart contract language, allowing for smart contract developers to use existing mainstream programming languages, which allows for cheaper smart contract implementation as compared to Ethereum who’s proprietary smart contract language, Solidity, can be a barrier to integration.

NEO is best acquired through Binance. Storing NEO on the Binance exchange will result in a GAS distribution once a month on the first. We recommend the NEON wallet for safe storage. GAS will be distributed on the NEON wallet daily.  

WaltonChain

WaltonChain ($WTC) is classified as a Dividend and Utility coin. Waltonchain is on the cutting edge of using RFID hardware to enable supply chain management 2.0. We believe Walton has the potential to become a dominant IoT blockchain solution Waltonchain is the only truly decentralized platform combining blockchain with the Internet of Things (IoT) via patent pending RFID (Radio Frequency Identification) technology. The custom RFID chips are able to digitally sign and verify transactions at the integrated circuit level, automatically and instantly reading and writing data to the chain without human intervention. This unique implementation of blockchain + IoT facilitates the true interconnection of all things in the real world with the virtual world, creating a genuine, trustworthy and traceable business ecosystem with complete data sharing and absolute information transparency. Walton has two major competitive advantages:

  • A recently confirmed (to be signed) partnership with China Mobile’s IoT Alliance. China Mobile is the largest mobile telecommunications service in the world as well as the world’s largest mobile phone operator by total number of subscribers. Walton’s Management system is set to be implemented through mobile communication networks, and China Mobile is the largest one. Waltonchain is positioning themselves to be the single connector of the entire Internet of Things initiative put forward by the China Mobile IoT Alliance.
  • They implement the blockchain through the RFIDs at the foundational layer. Their technology is patent-pending and gives Waltonchain a solid claim as the only blockchain that connects the physical world with the virtual world with truly reliable data. This is because all other IoT solutions tag items through API, and this means all the data is first passed through a centralized intermediate, a potential point of vulnerability.

Ethereum

Ethereum ($ETH) is an open blockchain Platform that lets anyone build and use decentralized applications that run on blockchain technology. Like Bitcoin, no one controls or owns Ethereum – it is an open-source project built by many people around the world. But unlike the Bitcoin protocol, Ethereum was designed to be adaptable and flexible. It is easy to create new applications on the Ethereum platform, and with the Homestead release, it is now safe for anyone to use those applications.

OmiseGO

OmiseGO ($OMG) is classified as a Dividend and Utility coin. OmiseGO is a Southeast Asia-based company creating an e-wallet that will make transfer of assets and currencies possible. Merchants and users of the wallet can transfer whatever asset or currency they desire. For example, you could use your ethereum, bitcoin, international fiat, or even your airline points to buy groceries using the e-wallet app on your mobile phone. Transfers can happen across borders, or even while traveling abroad. Unlike Western Union or PayPal for example, the fees are almost negligible, and the transfer is instant. Because it’s based on a blockchain, there are no intermediary banks necessary and users don’t need bank accounts to access those funds. This is especially good for migrant workers who send money home and often don’t have bank accounts and are forced to use expensive wire services instead.

 

Tier 2 coins are those coins which have performed extremely well, we have a large amount of assets with, and we believe will continue to operate with high marks. What separates these coins from our Tier 1 status is a flaw or they haven’t yet proven their defining feature, though we believe they will.

NAVCoin

NAVcoin ($NAV) is a Privacy coin with upcoming Platform features. NAVcoin has been around for 3 years. It is not minable, instead being based on a Proof of Stake system in which stakers earn 5% annual returns. Theoretically this means there could be 5% inflation on the supply, however, that would require every coin holder to stake, so likely there will be very marginal inflation between 1 and 3% year over year. It is a currency originally based off of Bitcoin version 0.13, which should tell you it’s got a good foundation from which to build its feature set. Being based off Bitcoin, it currently is a method of transaction, with notable upgrades in the form of Segwit (with possible lightning network integration in the future) and 30 transaction times with extremely marginal fees. That’s great but a lot of coins have that going for them, so thankfully we’re just getting started with the real interesting pieces of NAV. The first and currently only implemented feature, NavTech is a unique dual blockchain technology. Essentially, NAV runs on these two blockchains in order to completely disconnect the sending wallet (your wallet), to the receiving wallet (where the money is getting sent). Think of it like a VPN, NavTech completely strips the sender’s details so the transaction is completely anonymous. The anonymous transaction space has really gotten big lately, with Monero’s recent price action and Ethereum’s implementation of ZKSnarks being two big examples that come to mind.Moving on to the roadmap, there are two big upcoming features for NAV:

  • The first is Polymorph, which is a really cool blend of Nav’s anonymous transactions and Changeally’s instant exchange. What this means is that, for example, I wanted to pay someone in Bitcoin but I wanted to do it anonymously. Polymorph would take my bitcoin, turn it into navcoin in order to be processed and sent anonymously using the Navtech dual blockchain, then turned back into bitcoin at the to be sent to the receiving wallet. This will certainly set NAV apart, as it guarantees anonymous transaction for all of the coins on changeally. This is huge for exposure, and a great opportunity for NAVcoin to gain trust, which is absolutely critical anonymous transaction coins.  
  • The second big upcoming feature is ADApps, or Anonymized Decentralized Apps. This is also a huge potential win for Nav as there is already a huge amount of interest in the crypto space surrounding Dapps, such as Ethereum and Omni. Adding in the anonymous layer would attract projects that would value the anonymity. Nav is still in the planning stages for this project so it could still be awhile before it comes to fruition, but we should see the whitepaper for it soon, and if they could be first to market with ADapps that could prove to be a killer feature for them as it would give them first access to the interested demographics.

Ripple

Ripple ($XRP) is a real-time Payment protocol for anything of value. It’s a shared public database, with a built-in distributed currency exchange, that operates as the worlds first universal translator for money. Ripple is currency agnostic and has a foreign exchange component built right into the protocol. Ripple acts as a pathfinding algorithm to find the best route for a dollar to become a euro or airline miles to become Bitcoin. It will look at all the orders in the global order book. The case for XRP comes down to the following: 1) Payment systems work best with bridge assets to focus liquidity. 2) There are good reasons to expect a cryptocurrency to be the most popular bridge asset. 3) There are good reasons to expect that cryptocurrency to be XRP.

  • Open, decentralized payments will have lots and lots of assets, including national currencies of all kinds and cryptos. A significant fraction of payments will be among assets that aren’t the most popular. Using intermediary assets to settle those payments concentrates liquidity and reduces spreads.
  • National currencies are always tied to jurisdictions and can’t be universal. Systems built around them will never be as open and inclusive as systems that aren’t.
  • XRP settles faster than any other major crypto. It higher transaction rates than other major cryptos. It is beat by others only by the amount of liquidity available today. And, most importantly, XRP has a company that is devoted to making sure XRP succeeds for this specific use case.

 

Tier 3 coins are those coins which we have moderate investments and we believe have a possibility of high performance in the future, but as of yet have not shown enough performance to reduce their risk profile. Tier 3 coins are coins which are moderately risky, but due to our risk analysis of the project and team we believe have minimal chance of failure.  
Tier 4 coins are coins which we have minimal stake in and are highly risky. These coins represent the outer fringe of our risk analysis, in that we have little information to work with, have little insight into the coin’s performance, and at the very best we are making an educated guess that they will be successful. If a coin performs well and proves that it has a commitment to its compelling feature, it will be moved to the Tier 3 status.  

ICON

Simply put, ICON ($ICX) is a massive scale blockchain Platform that allows

  • Decentralized Application (DAPPS) – Build DAPPS on ICON Platform like on Ethereum and NEO. Yes, soon, you will see ICOs happening on ICON platform for different DAPPS
  • Interchain (Interoperability with Blockchains) – Allows different blockchains connecting to one another through their protocol. ICON is fully compatible with traditional blockchains like Bitcoin and Ethereum and in future can bridge other public blockchains such as Qtum, NEO and many others to achieve their mission statement – “Hyperconnect the world”
  • Artificial Intelligence (AI) – Use of AI to ensure all nodes contributing to ICON Republic/platform are rewarded fairly and not to have certain powers over distribution policies. AI will continue to learn a variety of variables to determine optimal distribution policies and achieve complete decentralization.
  • Decentralized Exchange (DEX) – ICON will integrate different DEX protocols on their platform to facilitate exchange of ICX and other future ICON platform currencies. Bancor protocol will be their first DEX protocol when mainent launches this month end and Kyber and others will follow. Not just throwing Kyber’s name out there, it was confirmed they are working with each other, official partnership yet to be announced.

 

Fundamental Currency Research

In this section we’ll feature a daily ICO or new coin we think you should check out. Based on your country, you may not be able to participate in the ICO, but you will be able to trade the coin once it is listed on an exchange following its ICO (usually only a couple of weeks). ICOs are where a lot of money in crypto is made. Here’s proof.   That said, we should warn you: ICOs are highly risky endeavours and you need to mitigate any potential losses. Treat it as money you’ve lost the moment you contribute to the ICO. We are not responsible for the ICO’s performance. Today’s featured ICO / New Coin is:

 

Phantasma Protocol

For flipping Good.

For long-term holding Neutral.

What is it? 

Next-generation messaging protocol, using the power of the NEO blockchain. Decentralized, fast and secure.

Relying on third party services for something as critical and personal as email, photos or videos is dangerous.
Companies can be hacked, bankruptcies can happen and users are left at the mercy of a few unknown power-brokers.

For the artists that make amazing videos, games, music and other copyrighted content, giving up a large percentage of your revenue can be very discouraging. Plus content creators usually become locked-in to those centralized platforms with the overhanging danger of arbitrary rule changes cutting their revenues.

Phantasma brings a decentralized content distribution system running on the blockchain,
with strong emphasis on privacy and security.

 

 

What is our verdict? 

What we like: NEP5, Going after a good niche

What we don’t like: Messaging isn’t exactly the sexiest use of blockchain, and the demo isn’t live for the ICO.

 TOKEN SALE: SINCE 22 MAY

Ticker: SOUL

  • Token type: NEP-5
  • ICO Token Price: 1 SOUL = 0.23 USD
  • Fundraising Goal: 10,000,000 USD
  • Total Tokens: 100,000,000
  • Available for Token Sale: 65%
  • Whitelist: YES (SINCE 10 MAY, JOIN )
  • Know Your Customer (KYC): YES
  • Сan’t participate: CHINA, NORTH KOREA, SYRIA, USA
  • Token Issue: WILL BE UNLOCKED INSTANTLY DURING THE CONTRIBUTION PHASE.

Website: https://phantasma.io/

Whitepaper: https://phantasma.io/phantasma_whitepaper.pdf

We exited our position in KIN in response to it sharply dropping on Tuesday. This was likely in response to the announcement that “Kin Launches Own Blockchain in Race to Be the Most Used Cryptocurrency in the World” It’s a big bet and could set them up if they can pull it off, but it’s also a gamble. We’ll continue to evaluate this position if we think it’s worth re-entering.

 

 

A pair of Congressional subcommittees will update their continuing mission on blockchain technology during a hearing tomorrow. Tomorrow’s session will be more narrowly focused compared to a similar hearing held in February. While the February event covered blockchain applications beyond the realm of cryptocurrencies – tomorrow’s hearing will focus on blockchain’s use in supply chain management. A representative for Lamar Smith, the chairman of the House Science Committee, said they will host “experts in intellectual property, cybersecurity, as well as shipping and logistics.” Rep. Roger Marshall, referred back to their past work and said tomorrow’s meeting builds on that: “This hearing will build upon the previous one, which explored the science behind blockchain technology. I know the intent of the hearing is to be informative but look forward to seeing where the discussion will go and the questions my colleagues ask,” he said “The committee has an interest in supply chain risk management (SCRM) through our jurisdiction over the National Institute of Standards and Technology, or NIST, which has worked extensively on SCRM,” press secretary Brandon VerVelde said, adding “This hearing is intended for information-gathering for the committee members. We look forward to learning a lot from the witnesses.” Meanwhile, we just saw EOS move a huge amount of Ethereum, the currency they hosted their ICO with, from their wallets into Bitfinex. This could signal that they intend to dump over 200,000 ETH, or over $150M worth. This could be in response to their upcoming mainnet release, or it could be in response to the SEC hearing on Ethereum today. Whatever the case, such a large dump would certainly have huge implications on the larger market. On Sunday, HBO’s popular comedy “Silicon Valley” had an episode which dealt with cryptocurrencies. While cryptocurrencies, and more specifically ICOs, weren’t portrayed in the best light, we think this is a great way to get people talking about crypto. Check out this humorous scene from the show:

Technical Analysis Research

Recent gains in the Crypto markets are still being consolidated.  The only setup that I found that I liked tonight was BNB/BTC, if it breaks higher from the recent triangle consolidation.  Here are the recent swings that we’re tracking in the portfolio below:

 

  • WTC/BTC – Long @ .00155980BTC (4/23). My target exit is at .002BTC. Doing just fine.
  • ADA/BTC – Long @ .00003931BTC (5/1) My target exit is at .00005BTC.

Please keep in mind that if you want to follow these trades, I am using FIXED RISK POSITION SIZING. This means that I am using a fixed amount of risk capital that is based on my account size, like 2%. I am assuming that the trade will burn to the ground and that I will lose that entire capital position! Only in this manner can one effectively manage a position the way that you have to. If you’ve every checked your blockfolio nervously every 5 minutes when you’re underwater, this will prevent that.   I will track these positions in this area and not in the main portfolio section. I will use a public portfolio tool to do so, which you can access by clicking below:

Public Swing Portfolio Link

If you missed my earlier webinar, “More Profits in 2018; Ten Ways to Chart Like a Pro.” then you can catch the replay here.   My new class “Introduction to Technical Analysis” is now available via our online store.

If you go to buy any of our courses at our online “store” you can receive $10 off the $59 street price with your member’s “coupon code” of member18crypto..

We’ve started to do some swing trades on alts, tracked in the previous section. I am mostly focusing on the top 10-20 coins for now until we confirm that we’re back into an overall bull market.

I am doing the majority of my Technical Analysis work on TradingView and Coinigy, and I have a BitFinex app on both my iPad and Android smartphone. All of these charting platforms call a TradingView API. TradingView is the 800 lb. gorilla in the Crypto charting space until the “established” players want to make a go at Crypto, like Ninjatrader, Tradestation, eSignal, Sierra charts, etc. My sense is that TradingView has such a head start that it will be very difficult for the big boys to make a dent in this space for a while. Until that point, TradingView has almost a monopoly in this space. If you have a particular tool that you think is superior, please let me know.   You can access the BitFinex and TradingView platforms for free, however there are some paid features that you might want to consider depending on your needs, such as expanded watchlists, different study sets, account alerts, etc.

 

  Coinigy is a great tool for determining prices on each exchange, however I may not have access to the full suite of tools on TradingView charts. I am currently not using it as a front-end GUI for my exchanges, which it supports.I also use Blockfolio to give me a quick snapshot of my holdings, and find that it does an excellent job to aggregate all of my holdings into one easy-to-read snapshot of my cryptocurrencies, which are typically located in many different places.

 

I am also trialing the Profit Trailer and CryptoHopper trading apps which are working well in this choppy market.

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