Neutral Day

Many Exciting Developments Occurring Despite Some Lingering Fear

I did say today would be interesting, right?

Most notably we’ve had a little pop in the total market cap, a nice plateau throughout the day, and recently a sell-off to make us nearly even for the day. Ideally, the market volume was rising throughout the day so this means we’re seeing true Bull vs. Bears action which is ideal for where the market is right now.

One of the more positive trends we’re seeing is how the cryptocurrency industry is poaching highly skilled individuals from both the financial services industry and the technology industry. Today CNBC reported that Blockchain.com has hired former Goldman Sachs executive Breanne Madigan as the head of institutional sales and strategy.

Now, having former Goldman Sachs people shaping the future of crypto is nowhere on my scale of optimal, but it represents to us the changing tide. No rational person leaves an executive position at Goldman, one of the most competitive businesses in the world, to join a startup unless there’s real conviction and reason for doing so.

This comes right after Galaxy Digital, founded and run by former Wall Street exec Michael Novogratz, hired Goldman Sachs executive Richard Kim as its new chief operating officer on April 10th. Matt Hougan, the CEO of Inside ETFs and a well-known face in the exchange-traded fund industry, left to join a cryptocurrency index fund manager called Bitwise Asset Management in February. Amber Baldet, blockchain program lead at JPMorgan Chase, left the banking firm to start her own venture on April 2nd. Notice a trend here?

We’ve said multiple times that you want to be investing in whatever is at the intersection of Wall St. and Silicon Valley’s interest. Not only that but if the crypto industry is so compelling to high profile members of both that they’re willing to leave very lucrative and solid jobs, then maybe we have something here that most people aren’t seeing.

What everyone in crypto did see today was Verge coin’s announcement of their new partnership with MindGeek, the leader in the online adult entertainment industry. This was the culmination of the last month’s fundraising campaign in order to reveal this partnership. The announcement essentially boiled down to how Verge would now be accepted as payment on many of MindGeek’s adult entertainment websites. We admit we were very hard on Verge yesterday and quite honestly we are genuinely surprised they didn’t pull an exit-scam like Bitconnect and run away with the money. Being endorsed by sites that have daily viewership in the millions is certainly good for Verge and crypto itself and there’s no denying that.

But, if you’ll allow us to be sceptical here as we like to do, there were many red flags leading up to this announcement. The lead developer promised that this partnership would “change crypto forever”, and while MindGeek is certainly a big flashy name, the simple truth is that they’ve accepted Bitcoin and other cryptocurrencies on many of their sites for years now. Once you begin to look past the headline, there’s not much substance here. Our educated guess as to what’s transpired here is that MindGeek received some or all of the 75 Million XVG (Verge) that was raised in the fundraiser that had been requested from the Verge community for the continued development of the coin.

Once MindGeek sells that XVG, they’d have as much as $7 Million USD as collateral to receive XVG payments without having to do anything outside of the little marketing they did today. MindGeek receives free advertising to hundreds of thousands of people that are of their target market while the XVG team gets a very convenient pump to offload their personal XVG coins.

After all, XVG is one of the most centralized coins out there. Of all wallets for XVG, the top 100 own 80% of the total supply, up from 66% in December. Given that 90% of the maximum supply has already been released into circulation, that is extremely worrisome.  

Needless to say, we’ll admit we had low expectations of Verge today and they did impress in some respects, but this is by no means a “partnership” as both of them want to indicate. Offering a coin as a payment solution is no partnership. VISA is not partnered with your local grocery store simply because you can use your credit card there. As we suspected there was a massive sell-off in XVG today, which is classic buy the rumor sell the news. We hope you didn’t get burned as we advised you would.

Verge is meant to be a privacy coin, but privacy does not mean security. We’re hosting a free webinar tomorrow to discuss some common and easy methods for better securing your cryptocurrency. Sign up here!

One piece of news causing FUD today was a headline that read, “New York Attorney General launches an inquiry into 13 crypto exchanges.”

That sounds ominous, but reading past the headline reveals a very different picture. From the press statement of New York Attorney General Eric Schneiderman:

“The Initiative stems from the Attorney General’s duty to protect consumers and ensure the fairness and integrity of the financial markets. Before trading on a new platform, sophisticated investors routinely demand robust disclosures, allowing them to assess the platform’s operations and the adequacy of its policies and internal controls. The questionnaire delivered to the virtual currency platforms asks for similar information so that average investors can better understand the risks and protections.”

To us that doesn’t sound compulsory. Instead, it sounds like a volunteer effort to improve transparency and protect New York’s investors. Most importantly it’s not an investigation into illegality but instead looks to be an effort to better understand cryptocurrency in order to better inform newcomers.That’s exactly the sort of regulatory interaction we’d like to see from lawmakers who will be imposing new rules and regulations on cryptocurrency inevitably. Active compliance, helping to explain rather than obfuscate, and even helping to write the laws themselves will put crypto in a much better position to seek mainstream acceptance and adoption.

Another way we see that happening is that governments of the world begin to actively use blockchain services and solutions in their infrastructure and project execution. One project that continues to give us hope of that dream is Waltonchain, who today confirmed that they are indeed part of the Alibaba Industry Alliance.

“Recently, Xiamen ZhongChuan IoT Industry Research Institute, a subsidiary of Waltonchain, reached a comprehensive cooperation intention and signed a partnership agreement with Alibaba Cloud (Aliyun) to join hands in the areas of smart city solutions and blockchain application schemes.
With the continuous development of human society and the continuous expansion of modern cities, the world’s bearing capacity is facing a severe test. According to the World Bank, by 2030, two-thirds of the world’s population will live in cities. As the city’s population increases, the strain on limited resources and services available, such as energy, healthcare, housing, transportation and water, will increase at an unprecedented rate. ‘Smart cities’ is not just a buzzword, they are the perfect solutions to these challenges.”

The big takeaway here is Smart Cities. This is the integration of new technological solutions with existing infrastructure solutions. Imagine a world where automation coexists with us at even our most basic needs. For example, a public trash bin with RFID sensors to monitor the amount of waste. Should the waste hit a certain level, a robot would be dispatched to empty the bin and dispose of the waste. This is a very isolated example and certainty having sensors and robots does not a smart city make, but the point is that by upgrading our living environments with cutting edge technology we stand to enter a new era of living standards and progress.

This is why we bring up Waltonchain within this context. IoT Blockchain will be an integral backend to these applications. Specifically, this has to do with the most ambitious infrastructure project of the century: China’s One Belt One Road (OBOR) project.

According to Wikipedia, it’s a “development strategy proposed by the Chinese government that focuses on connectivity and cooperation between Eurasian countries, primarily the People’s Republic of China (PRC), the land-based Silk Road Economic Belt (SREB) and the ocean-going Maritime Silk Road (MSR).” What this means is that China is setting aside trillions of dollars in order to rapidly develop new infrastructure, logistics networks, and smart cities in order to massively improve trade and trade relations with the West.  

Says one architect working on the project as it relates to smart cities, “We need to create a smart framework. We spend a lot of time lobbying governments to adopt technological advances. Though those at the top tier of the government are eager for change, they also have a lot to consider and find ways for incremental, rather than disruptive, applications of such technology.”

So this is where we’ll leave that for now. Needless to say, we see this as one of the best investment opportunities that have ever occurred, and blockchains solutions are in a unique position to be utilized for it in ways that would be extremely lucrative to you as an investor.

Chinese based IoT and Platform blockchain solutions such as Waltonchain, Vechain, NEO, and Qtum represent ideal candidates for government contracts and collaboration. Of them, we clearly like NEO and Walton, but new projects are getting started all the time and we’re constantly looking to stay ahead of the trend.

We’ll continue to watch this develop but we personally think it’s a golden opportunity should one of these projects get tapped to help manage logistics or build the infrastructure to support the new smart cities being built alongside OBOR.

Talk to you tomorrow.

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Defensive Actions for the next trading day: 

• None.

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