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February 28, 2018

 

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Crypto Market Commentary

Small correction erases most of yesterday’s gains

Low volatility continues

 

We’ve been considering the comments of Bill Gates over the past 24 hours, which has lit up a firestorm in the crypto community as people almost uniformly opposed Mr.Gates and his assertion that cryptocurrency can and has led to drug related deaths.

While we already spoke in length regarding our stance to those comments yesterday, I think an important topic this brings to light is the general lack of support from those in traditional systems and archetypes. Bill Gates, Jaime Dimon, and Warren Buffet all represent the current system and paradigms in some way, and their dissatisfaction with cryptocurrency is telling.

It’s true that blockchains and cryptocurrencies as a whole aren’t perfect. Human error and  programming errors will always lead to system vulnerabilities. The deflationary mechanisms built into many cryptocurrencies in turn cause a rising price that discourages spending and encourages hoarding, even though the price of a cryptocurrency is irrelevant if all it’s being used for is a transfer of value and currency conversions are involved in that transaction.

The main point being made here is that the loudest critics are those who stand to lose the most. Disruption and change are scary for those who embrace stability, but we as a species have never gotten ahead by remaining the same. We improved our tools, we innovated, we embraced the challenges of an uncertain future instead of maintaining the status quo. The truth of the matter is that cryptocurrencies are simply the latest iteration in a long list of systems and tools that we have improved upon.

Your choice is either to embrace the status quo or change.

Cryptocurrencies are not perfect. But neither is the current system, and the proposed changes inherent in cryptocurrencies could alleviate many of the problems that plague today’s economies and businesses, and that’s something worth promoting, not scorning or dismissing.

One piece of news I do want to cover is that Germany announced that it won’t tax Bitcoin and other cryptocurrency users for using them as a means of payment. This message from the Ministry of Finance quite simply means that if you exchange crypto to pay for coffee, for example, you are not subject to any capital gains tax and instead are directed by the EU’s VAT Directive. This is different from how cryptocurrency transactions are treated in the United States, where the IRS treats cryptocurrency as property for tax purposes, and as such using it for a transaction is technically a sale of property and subject to capital gains tax.

From the German Ministry Of Finance, “Virtual currencies (cryptocurrencies, e.g., Bitcoin) become the equivalent to legal means of payment, insofar as these so-called virtual currencies of those involved in the transaction as an alternative contractual and immediate means of payment have been accepted.”

We think this is a very important distinction that many countries will soon clarify in the future. Part of the struggle for governments is how to define cryptocurrencies as either an asset or as a currency, as they clearly can act as both.

This is just one of many different questions that cryptocurrencies are raising, and it is our hope and belief that countries will embrace crypto rather than render it obsolete by regulation.

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Offense – Adding Trades

Offensive Actions for the next trading day: 

  • Entered ELA position

Defense – Managing Risk

Defensive Actions for the next trading day: 

  • None.

Current Portfolio

 

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

ELA

None.

 Tier 3

REQ

SUB

LINK

NANO

Tier 4

BNTY

TAU

WISH

PHR

LOCI

HPB

XBY

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

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.

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.  

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

As we’ve mentioned, the NEO Ontology Airdrop is happening March 1, 2018, around 21:00 (UTC+8). If you’re on Eastern Time (UTC-5) then that converts to 8 AM on March 1st.

For each NEO an individual will receive 0.2 ONT (50% is freely tradable and the other 50% is automatically locked until the release of Ontology MainNet in Q2 2018).

Delivery of the first portion of ONT will be completed in the weeks following March 1, 2018 (0.1 ONT per NEO). The other locked half (0.1 ONT per NEO) will be using the same snapshot, but will instead be airdropped after the release of Ontology MainNet in Q2 2018. Further details have not yet been announced.

Airdrop details here: https://medium.com/ontologynetwork/the-neo-council-airdrop-faq-4b1694928373

Similar to the NEO ecosystem with GAS dividends, there will be a voting model in place for the ONT Network where holders of the ONT tokens will have a vote on decisions in the ecosystem. Regarding the total supply of ONT tokens, there will be 1 Billion ONT that will be created on the genesis block.

What will be interesting is that there is no ICO so we have no existing price for the coin. If your intention is to immediately sell the free ONT tokens you recieve, I would caution against selling during the first few weeks of exchange listings as this is actually a good project so there is going to be demand, but there will be a flood of supply so it will make the price very volatile until it settles down.

The Litecoin subreddit has been censoring the tweet of Litecoin founder Charlie Lee, in which he expressed support for the infrastructure of rival payment coin Nano. While Charlie’s outspoken comments have gotten him into hot water with his own community in the past, we believe that Litecoin and Nano are distinct enough that it’s acceptable for him to compliment it. Furthermore, crypto as a space is too small for tribalism and “us vs. them”. The true competition for cryptocurrency is not internal, but external and against the traditional systems we intend on disrupting.

What a bittersweet day for WaltonChain ($WTC)

As one of our Tier 1 coins, we hold it to a higher standard because it’s one of our principal investments.

We were very disheartened to see this twitter post earlier:

If it’s not immediately clear, the Walton team held a Valentine’s Day competition to give away WTC tokens to a few random twitter followers for retweeting the competition.

The retweet response was from the Walton account itself, which means the person running it forgot to switch accounts. That would be embarrassing enough if it were not for the fact they were thanking the Walton team for winning the competition, even though they are the Walton team. Now, does this actually mean the Walton team rigged the competition? There isn’t enough evidence to support or deny that, but it does plant the seed of doubt within the minds of the average investor. The competition winners only won ~$40 of the Walton token, so it was not worth potentially torpedoing their reputation over.

It’s not a good look and it’s evident that the Walton team needs a PR shakeup yet again, but what is reassuring to us is that the average investor is not their customer. Walton is focusing on B2B, and any investor relations are understandably an afterthought. This is principally why we believe that Vechain has done much better than Walton in raising capital so far — they are both B2B and B2C, so they need to build a devoted following if they are going to have any chance of being successful. Walton, on the other hand, is much more dependant on building business relationships, which don’t come to light until the papers are signed.

Regardless, the best course of action for Walton is to look internally for what is causing these issues, and take a “United Airlines” approach as it relates to this situation: minimize, apologize, distract. Some investors take a hardline approach in that even one transgression of misplaced trust is enough for them to liquidate a position, while other are much more forgiving so long as the long term vision has not been compromised.

To that end, it was fortunate that Walton had good news as well today.

In keeping with their much-needed rebrand, an announcement was made regarding their website redesign made here: https://medium.com/@Waltonchain_EN/announcement-on-the-release-of-waltonchain-new-official-website-version-2-0-23473f902170

This is a good step and from the article it appears that Walton is making the right steps to improve its brand, though today’s misstep does make it a “2 steps forward, 1 step back” situation.

Regarding one of the hottest cryptocurrencies out there and in our portfolio right now, OmiseGo (OMG) has announced their eWallet SDK (Source Developer Kit) is now open source.

From the repositories themselves, we can see the extent of the SDK:

  • eWallet Backend: The eWallet allows developers to run a (local) ledger through a web interface. The eWallet will later be plugged to a blockchain and connected to a decentralized exchange. All the eWallets will then become a federated network forming the top layer of the OMG network, allowing the exchange of any currency into any other in a transparent way. Also check out the sample eWallet server which demonstrates the eWallet.
  • iOS SDK: Allows iOS developers to integrate iOS apps with the eWallet Server. Also check out the sample iOS application which demonstrates the SDK.
  • Android SDK: Allows Android developers to integrate Android apps with the eWallet Server. Also check out the sample android application which demonstrates the SDK.
  • Ruby SDK: Allows Ruby developers to integrate Ruby-based web apps with the eWallet Server

For the non-technical readers, this is very impressive and marks a very important milestone for the crypto project looking to “bank the unbanked”. While the eWallet and SDK are still under heavy development, i.e., “beta”, this opens up independant developers to build upon the platform that OMG is building. It is also well documented, the test coverage seems fleshed out, and they’ve made it easy for developers to get up and running.

The last thing to discuss today is our entry into Elastos ($ELA). We believe that NEP5 tokens will be a big investment opportunity in 2018. NEP5 tokens are those tokens which are built off the NEO system, much like how ERC20 tokens are built off Ethereum. In particular, we think ONT and ELA are two of the best projects being built on NEO, and we are excited to see the possibilities of this new coin.

Unfortunately, ELA is only currently available on Huobi, but that represents an opportunity if you’re able to grab some as it just won the Binance community vote, meaning it will be listed there and have a massive price increase in the near future is it becomes much more accessible to the average investor.  

 

 

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:

 

Current

For flipping Neutral.

For long-term holding Good.

What is it? 

Current is creating a digital token and protocol that is a method of exchange for time, attention and data in the digital landscape. It’s starting with media, creating an all-in-one personalized experience that rewards users for streaming from the networks they love, like Spotify, YouTube, SoundCloud and more.

What is our verdict? 

What we like: Being paid to watch content should easily attract users, and in our modern society attention is becoming increasingly expensive to this is a clever solution to stay ahead of that.

What we don’t like: A sustainable monetization model for content creators alone is something that even Youtube struggles with so this would be a challenge to pay content consumers. The app has also been out for a year and hasn’t attracted much attention, but hopefully the CRNC token will alleviate that.

  • Starts in 13 days

     

    Token
    CRNC
    Price
    1 CRNC = 0.24 USD
    Platform
    Ethereum
    Minimum investment
    0.03 ETH
    Soft cap
    3,000,000 USD
    Country
    USA
    Whitelist/KYC
    KYC & Whitelist

Website: https://current.us/

Whitepaper: https://cdn.current.us/whitepaper.pdf

Technical Analysis Research

Yesterday’s potentially positive price action went nowhere today, and we’re forced to wait another day to see if breakouts can commence and accumulation can start again. I go back to my earlier comments from the past few weeks that markets usually rally at the precise moment that everyone gives up on them. I thought that the recent comments by Gates would help cement that low, but it was not enough. You’ll remember that the comments from Jamie Dimon back in September almost perfectly nailed the bottom of that correction.

 

 

As I get time going forward, I’ll continue to develop the short-term swing trades that we can take on the 30 minute chart that I first discussed in last 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..

  will not place much emphasis on Altcoins right now while markets are still working out the eventual bottom.

 

 

 

    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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