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August 5, 2018

 

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Crypto Market Commentary

Mav's Daily Commentary

 

Week In Review

Bitcoin Trades Under $7,000 Despite “The Biggest Bitcoin News Of The Year”

 

The markets’ nosedive this week is a sharp contrast from the consequential news we received.

Intercontinental Exchange (ICE), the operator of 23 leading global exchanges including the New York Stock Exchange (NYSE), shared plans to create an ecosystem for digital assets globally.

 

This would cover everything from federally regulated markets and warehousing to consumer and merchant needs.

 

Their platform, Bakkt (pronounced like “backed”), has been developed in partnership with a variety of huge names including Microsoft, Starbucks, and BCG. They will begin by offering Bitcoin-fiat conversion for consumers to purchase everyday goods with cryptocurrency.

 

“As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks,” said Maria Smith, Vice President, Partnerships, and Payments for Starbucks. “As a leader in Mobile Pay to our more than 15 million Starbucks Rewards members, Starbucks is committed to innovation for expanding payment options for our customers.”

 

In addition to providing a digital asset ecosystem, Bakkt will integrate with the ICE’s U.S. futures market and clearinghouse. They will list a physically-settled one-day Bitcoin futures product, which will include physical warehousing (storage) managed in-house.

 

They plan to launch their futures product in November, pending regulatory approval.

 

Bakkt, which also plans to launch in November, prompted CNBC’s Brian Kelly to suggest that this is “the biggest Bitcoin news of the year.”

In many ways, this news is considerably bigger than a Bitcoin ETF approval.

 

Why? What does this platform mean for us?

 

For one, the biggest issue for mass crypto adoption, custody of assets, has been solved to the SEC’s apparent satisfaction. I say apparent as we don’t know how they feel about this until we see it affect the upcoming ETF decisions. It stands to reason that ICE wouldn’t have made a press release without making sure that this helps their cause and crypto’s cause with the SEC.

 

You can expect whatever this model is to be copied and implemented on other exchanges worldwide.

Furthermore, custody of assets being solved in this way means we will soon see people adding Bitcoin to their 401k if they desire.

 

Finally, it’s too early to speculate with certainty, but the regulatory issues for ETFs might also have reached a point where custody of assets is enough to convince the SEC that the market is ready. Obviously, their issues with manipulation and price volatility have not gone away, so this point may be moot for the time being, but there is a growing chorus they cannot ignore.

 

This comes after comments made this week by dissenting SEC Commissioner Hester Peirce, who voted for the recently rejected Winklevoss Bitcoin ETF filing:

 

“One, I disagree with how they read our statutory mandate. The way I read our mandate, we should have approved this one because we really shouldn’t have been looking to the underlying markets the way that we did in the order that they put out last week.

Second issue, I do think that institutionalization in this space would address some of the concerns they lay out in their order.

And the third thing, I think that, historically, the SEC has not been great on innovation, on welcoming innovation, and for me, this order perpetuated my concerns in this regard. We need to have a willingness to welcome new approaches and I’m worried that if we keep sending the message that we’re not open to hearing from people who have new ways of doing things, then people will say we’re going to take our business to another country.”


While ICE believes it can be the one to take Bitcoin mainstream, it also says it will not resemble the crypto-anarchist vision harbored by many early cryptocurrency adopters.

“Bitcoin can’t survive as a rogue idea,” said Jeffrey C. Sprecher, founder, chairman, and CEO of Intercontinental Exchange. “To evolve, the cryptocurrencies need to run on established infrastructure. They need the trust and rules that have been built into our financial system for many years. They need the kind of trust that the Big Board represents.”

 

That may seem ominous for those who value freedom for cryptoassets over price and adoption, but it cannot be argued that this will open up cryptocurrency to the world like nothing before.

 

Sprecher continued, “Bitcoin has the potential to become the first worldwide currency and we’re trying to make that happen.”

 

As an ironic signal of what’s happening, Jaime Dimon, CEO of JPMorgan Chase, the largest of America’s Big Four banks, who in September called Bitcoin a “fraud”, has a very different opinion of blockchain today. In the July-August issue of the Harvard Business Review, he called blockchain technology “real,” saying that JPMorgan is “testing it [blockchain] and will use it for a whole lot of things.”

 

This comes after the recent news that Google will be offer ready-made templates for their ‘blockchain as a service’ offerings, similar to products offered by Amazon Web Services, Microsoft Azure, and cloud-hosting services offered by Oracle.

 

Despite what the market prices may be telling you, the institutional players and the corporations have a very different tale.

 

The market seemingly reacted more to the news that the Korean exchange Upbit was raided by South Korean authorities than all these positive developments. Upbit was later found to be innocent of any wrongdoing, so the market’s current state is oversold based on nothing other than empty fear.

We simply can’t see the market continuing to languish like this under these circumstances. It’s clear that we’re reaching a point of hysteria with regard to fear, and that can easily predicate a sense of euphoria should the pendulum swing the other way.

 

Crypto continues to get more and more interesting, and the market continues to give us more hope of seeing a rebound here.

 

2018 is not over yet.

 

If you were not able to join us for the recent webinar “Ten Steps to Building Your Portfolio” webinar, the replay is available here.

We’ve started to produce episodes for The ReadySetCrypto Podcast; all of our episodes are posted on our blog (and on iTunes) and episode seven is now available. Episode Seven is a “tales of the tape” podcast, covering the topic “How Can You Start Over Again?”.. Look for more episodes shortly as we comb the crypto space for valuable interviews, and create valuable content to keep you in the loop!

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Doc's Daily Commentary

 

Offense – Adding Trades

Offensive Actions for the next trading day: 

  • None today.

Defense – Managing Risk

Defensive Actions for the next trading day: 

  • None.

RSC Managed Crypto Fund

[visualizer id="72847"]

How to read this portfolio: Please read through the FAQ tab

What is the RSC Managed Cryptocurrency Fund?: We have one goal: To beat the market. To do this, we aim to balance risk vs. reward. Additionally, we aim to enter positions advantageously and in small increments, not all at once. As such, the pie chart you see above is representative of our “expected” portfolio, but will likely not match our “actual” portfolio.

Why don’t you just buy into every position at once?: We aim to not only beat the market, but do so in a way that allows us greater leverage than simply buying in all at once. To do this, we will DCA into our positions to lower the average buy-in, and allow us greater yield from our initial capital seed. This also allows you the flexibility to follow our documented moves or immediately buy in when you want. We expect this will help you follow along easier as our moves are more deliberate. By setting targets for allocation, you know exactly how we intend to diversify our portfolio.

Why are you only targeting large caps? Where is ____ coin?: We are targeting large market capitalization coins regardless of our belief in their viability as this enables us to diversify our risk and improve our chances of staying positive. We can hedge our bets by creating a fund that incorporates all of the major assets yet distinguishes between them based on the allocation. For example, we allocated more to Ethereum over its competitors as we feel it has more built-in longevity given its status as the default ICO platform. Of course, that can change, and as such we will be periodically rebalancing this fund as we redetermine viability and yield.

Can I invest in this fund / can you manage my funds?: Not at this time. We are looking for ways to legally tokenize a fund such as this, but at this time no avenue exists for US citizens.

Will we be adding small caps / ICOs?: It is likely we will be starting a separate fund dedicated solely to small caps / ICOs. We feel that the market simply isn’t showing favorable risk / reward signs for us to be trading them right now, but that will likely change soon.

Why was the previous portfolio discontinued?: We felt it wasn’t correctly connecting with our customers as we started it in late 2017 and even during the 2018 bear market we were still very profitable. The same could not be said for customers who joined us during the bear market and tried to replicate our portfolio. Simply put: we wanted a portfolio that was easier to follow along with and less risky for our customers while still aiming for profitability.

Technical Analysis Research

In today’s market update video I discussed the current state of the top ten and introduced a new “fund” project that we’ll be creating over the next few months, in piecemeal form. I will be slowly and methodically creating a “fund” with (currently) 23 assets that we will do “live” or at least very plainly indicate where we intend to enter portions of assets. As long as the market continues grinding down in a bear, we will use sentiment-based entries to hopefully secure a better entry. Stay tuned for more this week.

 

I will be diving much deeper into the various derivatives that will enable much more fluid and nimble trading to those of you with an interest to do so. The challenge continues to be what exchanges that you can use depending on where you live, which of course will be a fluid situation.

 

Here are the recent swings that we’re tracking in the portfolio below; :

 

  • DGB/BTC – long @ .00000608 (7/23). My target exit is .000008BTC.
  • WTC/BTC – Long @ .00155980BTC (4/23). My target exit is at .002BTC.
  • ADA/BTC – Long @ .00003931BTC (5/1) My target exit is at .00005BTC.
  • ONT/BTC – long @ .0008905 (5/20) My target is .0013BTC.

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

I hope you all got a chance to catch my webinar class from earlier this year; if not, the replay is available here.  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 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 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 and/or Delta 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.

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:

 

COTI

For flipping Good.

For long-term holding Good.

What is it? 

COTI’s vision is to build a decentralised and scalable payments network to facilitate efficient global commerce. This will set the standard for a next generation payment solution that is trust-driven, instant, cost-effective and supportive of a multi-currency wallet. By reconciling cutting edge distributed ledger technologies with the best of traditional payment solutions, COTI will be poised to spearhead the mass adoption of digital currencies in the mobile era.

What is our verdict? 

What we like: Seems to be gaining good traction as DAG platforms offer a compelling alternative to blockchain.

What we don’t like: There are large DAG projects, such as IOTA and Nano, that already capture a huge lead.

  • Project name: Coti
  • Token symbol: COTI
  • Website: https://coti.io/
  • White paper: https://coti.io/en/files/COTI-overview-document.pdf?v=f8a1cb799d0
  • Hard cap: $30 million (token sale contributors will own 30% of the total token supply)
  • Conversion rate: 1 COTI = $0.1
  • Maximum market cap at ICO on a fully diluted basis: $100 million
  • Bonus structure: During the public sale, first 25% of tokens: 1 COTI = $0.087, 25-50% of tokens: 1 COTI = $0.091, 50-75% of tokens: 1 COTI = $0.096, 75-100% of tokens: 1 COTI = $0.1
  • Private sale / white list: Pre-sale over
  • ERC20 token: Yes (the tokens will be migrated to the mainnet after it is launched)
  • Countries excluded: USA, China
  • Timeline: Token sale begins August 15, 2018 (please refer to Coti’s website for the most up-to-date information)
  • Token distribution date: Upon conclusion of token sale

Website: https://coti.io/

Whitepaper: https://coti.io/en/files/COTI-overview-document.pdf?v=f8a1cb799d0

2017- 2018Q2 Portfolio (Discontinued)

 

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.

 

Tier 4

ZIL

IAM

FT

DATA

ELEC

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

 

 

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