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February 3, 2018

 

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Crypto Market Commentary

Week in review

Market weakly recovers but it isn’t enough

 

The correction is now in its fourth week.

A total market low of 348 Billion was hit on Friday. For perspective, the last time that was hit was December 3rd of last year.

We’ve seen Bitcoin drop 22% and Ether drop 17% over the past week.

As we’ve now seen the market correct from the high of 835 Billion to Friday’s low, this crash represents the most severe market selloff since December 2013.

We believe that while this is similar to the market crash of that time, cryptocurrency has changed since then. For one, the market is more diverse and Bitcoin is at an all time low of market dominance indicating a systemic tidal shift. Second, this crash had a very different purpose.

The Mt.Gox incident that caused the crash four years ago was caused by mismanagement of funds. The latest crash has been caused by a retracement of the massive spike in late 2018 coupled with a “flush” of the elements keeping crypto from legitimacy: Ponzi schemes like Bitconnect, the fraudulent scams like Tether, the inability of Bitcoin to scale fast enough, etc. This is the price of a space without rules — bad ideas, scam artists, and old tech will clog the pipes and in order to clean house, the market needs to shake off the weak hands, level the playing field, and start from a new blank slate. Tabula rasa.

Smart money will anticipate these events. The market is a cyclical creature. But dumb money won’t see that. They only think short term. They only FOMO buy into the highs and panic sell into the lows. This pattern will play out again and again.

As we reach the point where no more dumb money is left, as we finally hit a point where no one is willing to sell, as we finally convince the last panic sellar to give up, that is when this market will recover.

Doc talks about the stages of a market rally, and how to identify a market bottom in today’s video.

As we mentioned, we are on the road right now so today’s newsletter will be shorter and later. Our apologies. Thanks for understanding.

 

If you missed our class “Introduction to Cryptocurrency Trading” that we held on Saturday, it’s available now in our Premium Member’s Home as an archived class for those that purchase it. You can view more about it and watch the class today by visiting this link here.

 

Offense – Adding Trades

Offensive Actions for the next trading day: 

  • Nothing specific for tomorrow; please see comments in holdings below.

Defense – Managing Risk

Defensive Actions for the next trading day: 

  • Nothing specific for tomorrow; please see comments in holdings below.

Current Portfolio

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.
No new holdings.

Tier 2

OMG

OmiseGO is a public Ethereum-based financial technology for use in mainstream digital wallets, that enables real-time, peer-to-peer value exchange and payment services agnostically across jurisdictions and organizational silos, and across both fiat money and decentralized currencies. Designed to enable financial inclusion and disrupt existing institutions, access will be made available to everyone via the OmiseGO network and digital wallet framework.

 

 ELF

Based in Singapore, aelf is a crosschain blockchain protocol that intends to become the new internet infrastructure to support the next generation of digital businesses. The team and its advisors have been advising numerous blockchain projects in the past and they see a few industries who could be the early adopters of aelf: financial services, insurance, digital identity and IPs, smart city, and internet of things. Aelf will actively identify new business opportunities and dApps to be part of the aelf ecosystem. Below are some of the things that they are planning to do: Interoperate with existing dApps on existing chains Nurture new start-ups ideas Educate and transform established companies to be blockchain savvy As a “third generation” blockchain, aelf strives to provide a breakthrough in 3 areas: performance, resource segregation, and governance structure. We will explore these features in more detail below.

 Tier 3

REQ

SUB

Tier 4

XBY

BNTY

TAU

WISH

TRAC

ReadySetCrypto’s 7 Categories Of CryptoCurrency

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.

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.

 

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.

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.

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.

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, are highly risky, and we are contributing no more than 2% of our portfolio to. 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.  

 

Fundamental Currency Research

Today’s bounce after the all time low for this year on Friday was not enough to convince us or the market that a recovery is in effect. As such, we are in for more pain ahead, but this is simply winding the spring ever tighter. Once the market recovers, you’ll know it.

Here’s some of the biggest stories we saw this week:


State of Texas Orders ‘Decentralized Bank’ ICO Project to Cease Operations: https://news.bitcoin.com/state-of-texas-orders-decentralized-bank-ico-project-to-cease-operations/


Venezuela’s President Announces ‘Petro’ Token Pre-Sale: https://www.coindesk.com/venezuelas-president-announces-petro-token-pre-sale/


Japanese Electronics Retail Giant Launches Bitcoin Payments: https://www.coindesk.com/japanese-electronics-retailer-launches-bitcoin-payments/


Hong Kong–Based Investment Firm Acquires Pioneering Bitcoin Exchange BTCC: https://bitcoinmagazine.com/articles/hong-kongbased-investment-firm-acquires-pioneering-bitcoin-exchange-btcc/

J.P. Morgan Chase Bans Buying Cryptocurrency With Credit Cards: https://cointelegraph.com/news/jp-morgan-chase-bans-buying-cryptocurrency-with-credit-cards

​Facebook is banning cryptocurrency and ICO ads: https://techcrunch.com/2018/01/30/facebook-is-banning-cryptocurrency-and-ico-ads/


Samsung confirms it is making ASIC chips for cryptocurrency mining: https://techcrunch.com/2018/01/31/samsung-confirms-asic-chips/


Square Cash now allows anyone to buy and sell bitcoin: https://www.engadget.com/2018/01/31/square-cash-buy-sell-bitcoin/


India’s Finance Minister Strikes Stern Tone on Cryptos in Budget Speech: https://www.coindesk.com/india-finance-minister-strikes-stern-tone-cryptos-budget-speech/

 

Today we saw a very interesting article detailing how JP Morgan Chase is halting their customer’s ability to purchase cryptocurrency with credit cards because they want to “protect” their customers from a volatile market. We have two responses:

  1. Their customers don’t seem to need “protection” from buying status symbols, lottery tickets, overpriced alcohol, and any other risky commodity. Their customers are really nothing more to them than revenue generating units.
  2. Credit cards themselves are detrimental to their customers. Consumer debt is now back to beyond 2008 levels and credit card debt is a large part of that. People’s lives are ruined by a system of easy to access, hard to get rid of debt. Yes, there are isolated stories of people selling their homes to buy Bitcoin, but certainly those that bought at the high will come through alright if they do nothing other than wait. The same cannot be said for those with credit card debt.
  3. Banks see crypto as a direct and fundamental threat to their existence. They are doing their best to limit access to and discredit the validity of crypto while they feverishly work on their own blockchain solutions. This is a desperate attempt by them at self-preservation.

As a comical anecdote, in the past we contacted Chase during the formation period of our LLC in order to set up a business checking account. Our business was flatly denied any account with Chase due to our association with cryptocurrency.

We happily took our business elsewhere. You’re welcome Jaime Dimon.

 

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:

WePower

Overall, we like both the flipping and long-term potential for this ICO. Our thoughts on buying the tokens for flipping and investing for the long term are as follows:

For flipping Neutral.

For long-term holding Neutral. Energy can be a very tough market to break into.

What is it? 

WePower enables renewable energy producers to raise capital by issuing their own energy tokens. These tokens represent energy they commit to produce and deliver. Energy tokenization standardizes simplifies and opens globally currently existing energy investment ecosystem. As a result energy producers can trade directly with the green energy buyers (consumers and investors) and raise capital by selling energy upfront, at below market rates. Energy tokenization ensures liquidity and extends access to capital. The WePower blockchain solution is currently recognized by Elering, one of the most innovative Transmission System Operators in Europe.

What is our verdict? 

What we like: Strong team with good advisors. Demo with blockchain. This seems like an existing problem that could be solved with their solution.

What we don’t like: This is only a demo, not a MVP. Token distro only 55%.

 TOKEN SALE: 9 days  left – 2018-02-14

Token
WPR
Price
1 ETH = 8,000 WPR
Bounty
Platform
Accepting
ETH
Soft cap
5,000,000 USD
Hard cap
40,000,000 USD
Raised
$30,000,000
Country
Whitelist/KYC
KYC & Whitelist
Restricted areas
USA

Website: https://www.wepower.network/

Whitepaper: https://drive.google.com/file/d/0B_OW_EddXO5RWWFVQjJGZXpQT3c/view

Technical Analysis Research

We’re not going to bother with the top ten coin analysis today again; this weekend we saw a slight reversal higher but quite frankly it’s already fading as I write this on Saturday evening, and likely to just print another “lower high” to be determined. We have not accomplished the sought-after “capitulation” yet. In today’s video I’ll show you the four stages to a market rally, and I’ll discuss four ways that you can spot “the bottom” when it finally happens, so that you can put yourself on the side of the smart money for once. It’s definitely a very difficult skill to learn because every sense in your body will be trying to get you to do the exact opposite.

If you missed our Thursday report, please do yourself a favor and watch the video again, as I talked about how to DEAL with the Bear, and how to proactively AVOID getting yourself into one. If crypto markets are still weak early this week, we’ll spin up a live member’s webinar to show you what to do to deal with this pressure.

We had an excellent class this past weekend, Introduction to CryptoCurrency Trading. (Click here for more information and to sign up) This class is really targeted at the Crypto investor who wants to get moving but is somewhat uncertain about what they should do, and how to go about it. Another great candidate would be the recent investor who bought in at the top and is unsure of their actions. While you can’t attend the live class and the Q&A any more, the content is all there and we give you the slide download as well.

I am going to stick with the current list of holds and will not go into “swing” mode until we get a release off the bottom. If we see any coin showing particular strength I’ll detail a short-term swing.

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.

 

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