Premium Daily Crypto NewsletterFebruary 26, 2018
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Crypto Market Commentary
Bitcoin Back Over $10,000
Can We Hold On?
Despite the thinnest trading volume of the year so far, we’ve had a nice bounce and Bitcoin has once again summitted $10,000
One of the biggest stories today was Circle acquiring Poloniex, the world’s 14th largest exchange by volume. Why this is important is that Circle Internet Financial Ltd. is a mobile-payments firm backed by Goldman Sachs Group Inc.
“We expect to grow the Poloniex platform beyond its current incarnation as an exchange for only crypto assets,” the co-founders of Circle said. “We envision a robust multi-sided distributed marketplace that can host tokens which represent everything of value: physical goods, fundraising and equity, real estate, creative productions such as works of art, music and literature, service leases and time-based rentals, credit, futures, and more.”
What’s really interesting here is that Circle’s mobile app lets people make instant money transfers, and for a time the even allowed you to buy and send Bitcoin until they shut that down.
The play here is that Circle want to be the next Coinbase. Check out this link: https://www.circle.com/en/invest.
Commission free trading by default instead of having to use the GDAX trick to get into crypto fee-free? We’re all for it.
“We also look forward to scaling Poloniex up and out through market expansion and localization, increasing token listings where possible and appropriate, and exploring the fiat USD, EUR, and GBP connectivity that Circle already brings to its compliant Pay, Trade, and Invest products.”
Quite obviously details are scant and we won’t know more until the deal is finalized, systems are mitigated, and announcements are made, but we’re excited to see that 2018 is shaping up to be an important year for crypto as we begin to have a more decentralized and distributed marketplace with lots of options instead of just a few. Furthermore, Goldman Sach’s presence here cannot be ignored. It’s ironic to us that they put out a statement earlier today citing cryptocurrency as a risk to their business. A bit of hedging their bets, we think.
In an official statement they said, “We may be, or may become, exposed to risks related to distributed ledger technology through our facilitation of clients’ activities involving financial products linked to distributed ledger technology, such as blockchain or cryptocurrencies, our investments in companies that seek to develop platforms based on distributed ledger technology, and the use of distributed ledger technology by third-party vendors, clients, counterparties, clearing houses and other financial intermediaries.”
As we’ve received many questions over the past few weeks from our inquisitive subscribers, I thought it would be a good idea to share some of our responses so that everyone could benefit. We’ll turn this into a regular newsletter contribution and a sidebar article so you can reference these whenever you’d like.
Q: How do you structure your coin tiers? What determines a coin being in tier 1 versus tier 4?
People sometimes ask why I don’t have more “tier 1” coins. “Isn’t blank-coin a tier 1 coin?” they ask. Perhaps to you it is, but not to me. That they key, my portfolio is not your portfolio. What I choose to be a tier 1 coin is strictly up to my credentials, my research, and my investment level. I classify tier 1 coins that way not only because of how much money I’ve invested, but also how much time I’ve taken to understand them, read about them, and begin to trust their mission. These are the coins, the investments, at the heart of my “circle of competence”. Take some time to learn about it with the image below, it’s a classic Warren Buffet technique.
Q. What are masternodes? Why should I want one? How do I get one?
They’re a very popular aspect of cryptocurrency right now. As Proof of Work (mining) has been losing popularity due to the massive energy usage it requires, the alternative called Proof Of Stake has been developed to allow the network to be secured by people “locking up” their funds so that it is nearly impossible for a malevolent actor to control the network. One of the best ways to do that is staking rewards, where those locking their funds are paid a percentage amount in dividends as incentive for holding. To take it a step further, masternodes are very large amount of the coin that are granted even better dividend rewards.
For example, Dash, one of the first coins to implement Masternodes, currently requires $617,614 to acquire one. The payoff is that the node yields (at the current valuation of Dash) $47,000 per year. In dividends. For some people, that’s enough to live off of and never have to work again. Clearly, masternodes are great, but the crux is finding out about a coin before it’s big and the masternodes are too expensive for most people.
What it comes down to is being very good at finding coins before they’re popular, and especially before they have announced masternodes. I’ve seen coins, such as Vechain and WaltonChain, shoot up ridiculously in price because they revealed they would be adding masternodes.
Here’s a list of good coins for masternodes: https://masternodes.online/
Q. What do DCA and Expand mean in the portfolio?
DCA means Dollar Cost Averaging. DCA is an investment technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. The investor purchases more shares when prices are low and fewer shares when prices are high.
Expand means we added to the position, which may or may not correspond to a DCA strategy.
Q. Do you do sponsored reviews? Can we pay you to talk about this coin / ICO / exchange / platform / person, etc?
We do not do biased or compensated reviews. Ever. We believe crypto is more important than accepting payment to influence our words. When we talk about something, we want our audience to trust our opinions, the facts we share, and the coins we hold.
Q. Will you comment on any Youtuber?
No. We stay out of Youtube drama. We want people to stay away from bad advice and con artists, but it is not our place to make the determination as to who belongs to what camp. We hope that by teaching our audience to think critically, it will empower them to think logically about who’s saying what, which includes Youtubers.
Q. How do you feel about the Enjin mobile wallet?
Excellent wallet. Looking forward to when they add iOS, BTC Segwit, NEP-5 tokens, and more non-ERC-20 tokens. Coinomi supports more coins, but Enjin is my favorite mobile wallet.
Q. What relation does the market cap have to the price?
Market cap determines “rank”.
So a common misconception is that cryptos with lesser price per coin, the “cheaper” it is. When looking at coins, market cap is the amount of money currently invested into that coin, and the “price” of the coin is determined by dividing the market cap by the “circulating supply”. In the example of Bitcoin, it has a $174,771,167,895 market cap, and there are 16,836,975 Bitcoins in circulation, so $174,771,167,895 / 16,836,975 = $10380.2, the current price of Bitcoin. Ripple, on the other hand, has a circulating supply of 38,739,142,811 coins! So it’s more “diluted” than Bitcoin as there are far more coins available, so the price per coin is much lower.
Have a great week.
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Offense – Adding Trades
Offensive Actions for the next trading day:
Defense – Managing Risk
Defensive Actions for the next trading day:
ReadySetCrypto’s 7 Categories Of CryptoCurrency
Tier 1 coins are those coins which we have considerable assets invested, are firm believers in the project direction and execution, and have very little reason to sell within short to mid term. These are coins which we risk evaluated to be very solid, and have a high probability of existence duration.
NEO ($NEO) 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 ($WTC) is classified as a Dividend and Utility coin. Waltonchain is on the cutting edge of using RFID hardware to enable supply chain management 2.0. We believe Walton has the potential to become a dominant IoT blockchain solution Waltonchain is the only truly decentralized platform combining blockchain with the Internet of Things (IoT) via patent pending RFID (Radio Frequency Identification) technology. The custom RFID chips are able to digitally sign and verify transactions at the integrated circuit level, automatically and instantly reading and writing data to the chain without human intervention. This unique implementation of blockchain + IoT facilitates the true interconnection of all things in the real world with the virtual world, creating a genuine, trustworthy and traceable business ecosystem with complete data sharing and absolute information transparency. Walton has two major competitive advantages:
- A recently confirmed (to be signed) partnership with China Mobile’s IoT Alliance. China Mobile is the largest mobile telecommunications service in the world as well as the world’s largest mobile phone operator by total number of subscribers. Walton’s Management system is set to be implemented through mobile communication networks, and China Mobile is the largest one. Waltonchain is positioning themselves to be the single connector of the entire Internet of Things initiative put forward by the China Mobile IoT Alliance.
- They implement the blockchain through the RFIDs at the foundational layer. Their technology is patent-pending and gives Waltonchain a solid claim as the only blockchain that connects the physical world with the virtual world with truly reliable data. This is because all other IoT solutions tag items through API, and this means all the data is first passed through a centralized intermediate, a potential point of vulnerability.
Ethereum ($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 ($OMG) is classified as a Dividend and Utility coin. OmiseGO is a Southeast Asia-based company creating an e-wallet that will make transfer of assets and currencies possible. Merchants and users of the wallet can transfer whatever asset or currency they desire. For example, you could use your ethereum, bitcoin, international fiat, or even your airline points to buy groceries using the e-wallet app on your mobile phone. Transfers can happen across borders, or even while traveling abroad. Unlike Western Union or PayPal for example, the fees are almost negligible, and the transfer is instant. Because it’s based on a blockchain, there are no intermediary banks necessary and users don’t need bank accounts to access those funds. This is especially good for migrant workers who send money home and often don’t have bank accounts and are forced to use expensive wire services instead.
NAVcoin ($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 ($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 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.
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
Some further developments regarding the IOTA MIT DCI email leaks. “Back in January, the IOTA Foundation released a four-part blog post detailing the technical considerations of a vulnerability report published on GitHub in September 2017 by the Digital Currency Initiative (DCI), an organization affiliated with MIT. Unfortunately, and much to everyone’s surprise, the communications between the IOTA team and DCI that occured prior to this report were recently leaked, and published on an external blog.”
According to the IOTA team, this was the sequence of events so far:
“From day 1, the IOTA team responded promptly and courteously with technical details requested by DCI. IOTA even offered a bounty to reward the DCI team’s hard work and dedication, to which DCI never responded.
We continue to maintain, as discussed in considerable detail in the blog post linked above, that the vulnerability described in this report never left users susceptible to theft or attack.
The properties of the IOTA protocol discovered by DCI were in place by design as a copy-protection mechanism, and that DCI has not uncovered any actual vulnerability in the IOTA protocol.
Nevertheless, out of an abundance of caution, we followed the DCI team’s advice and implemented their requested changes in August, 2017.
To date, the IOTA team has not received any answers to questions posed, code demonstrating the attack, or other documentation elaborating on the vulnerability beyond what was seen in these emails.
We would very much appreciate help finding actual vulnerabilities in the IOTA protocol, and as of November, 2017 we have been working with a team of cryptographers to obtain an accurate and objective assessment of this situation.”
The team goes on to call upon the DCI team to release all code, documentation, and research. We applaud the IOTA team for handling the situation professionally, although we can speculate that Bosch (who recently announced a partnership with IOTA) was partly behind this.
See the altcoin analysis tab for our take on the NEO airdrop.
Looks like our re-entry for ICON was a perfect call as it shot up from 3.67 to 4.25 within 12 hours. The official ICX wallet, ICONex, is now live so you can finally properly store it. Make sure you are NOT sending ICX as an ERC-20 token. You must transfer them to the ETH wallet address as they are ERC-20 tokens, not ICX mainnet coins. You’re being given an incentive to do this as there will be an airdrop (free money!) for mainnet ICX coins (not the existing ERC-20 tokens) and can only be received through ICONex ICX wallets. Further Airdrop details will be released on March 2nd.
ICX tokens currently under circulation are ERC20 tokens. If you wish to transfer them to the ICONex wallet, you must transfer them to the ETH wallet address as they are ERC20 tokens, not ICX mainnet coins. (Storing ICX ERC20 tokens in the ICONex wallet is not mandatory)
The ICX team are currently preparing the ERC20 token to ICX coin Swap. They are working on the details and cannot give the exact schedule at the moment, however we expect the Token Swap to start next month.
Even after the Token Swap process begins, the ICX ERC-20 tokens will be able to make transactions. After a period of several months with many announcements about the Token Swap, the ERC-20 tokens will be burned, so make sure you convert your tokens.
We will make a video regarding the token swap when that is available.
Speaking of Airdrops, aka literal free money, so long as you’re holding NEO on March 1st you will an Airdrop of the Ontology token (ONT) at a rate of .2 ONT / 1 NEO, of which .1 ONT is immediately available and .1 ONT is locked until the mainnet launches in Q2. Ontology is decentralized trust platform working closely with NEO so we expect it to be a solid investment in the future. Holding your NEO in the official NEO wallet, the NEON wallet, or Binance / Kucoin will make you eligible for the Airdrop. We highly anticipate the price of NEO to rise this week in response to this. Read more details here: https://neo.org/blog/details/3061
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:
For flipping Neutral.
For long-term holding Good.
What is it?
Innovative trading and education platform for leveraging the disruptive technologies emerging from the blockchain space. It is an alternative for those who want to benefit from the explosive growth of cryptocurrencies without the high risk and complexity that accompanies digital asset trading.
What is our verdict?
What we like: There are few good fiat gateways in Asia, so the Coinbase model could easily capture the Asian market. The team looks well-rounded and suited for the tasks at hand.
What we don’t like: They are entering a very competitive space, and they are at the mercy of local government, which could either help or hinder this project.
TOKEN SALE: 15 MAR – 22 MAR
- Ticker: HYB
- Token type: ERC20
- ICO Token Price: 1 HYB = 0.30 USD
- Fundraising Goal: 50,000,000 USD
- Sold on pre-sale: 33% DISCOUNT
- Total Tokens: 1,000,000,000
- Available for Token Sale: 53%
- Whitelist: YES (UNTIL 28 FEB, JOIN )
- Know Your Customer (KYC): YES
- Сan’t participate: USA, CHINA
- Accepts: ETH, BTC, NEO
Technical Analysis Research
As I get time this week, I’ll continue to develop the short-term swing trades that we can take on the 30 minute chart that I first discussed in this weekend’s report. The key to securing commission-less trades will be to use limit orders in which we are the market-maker on both sides of the trade, in and out. Stop orders are traditionally market orders, so that might introduce a level of noise that we’ll have to work around. Fees are not cheap in this regard at .25% for BTC. If Stops are necessary (vs. mental stops and using limit orders to exit) then perhaps LTC would be a better instrument at .3% taker fees, which if my math is right is $.66 vs. a $26 commission for BTC. If I get more interest I will also also consider securing a license for profit trailer to see if we can set up trades.
Here are the elements that I think that one needs to successfully participate in short-term swings:
- Instrument/Asset to Trade: What you’re trading needs to be liquid enough that your position is just a drop in the pond.
- Timeframe: The timeframe that you’re going to trade needs to match your temperament, your available time, and the opportunities available.
- Fees: minimizing net fees is important to achieve a net positive profit factor.
- Entries: you must define clear, non-negotiable entries with transparent, easy-to-follow rules.
- Exits: must be defined at or before your entry so that there is no guesswork.
- Tracking/Analysis: a huge part of any system, it must learn from errors/mistakes/losses to determine if there is a root cause behind the loss.
- Start small: My preference is that you start these trades with the minimum possible position size, and only through demonstrated performance should you start to lever up to even a fraction of a percent of your account size.
If you go to buy the course at our online “store” you can receive $10 off the $59 street price with your member’s “coupon code” of member18crypto..
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.