Premium Daily Crypto NewsletterJanuary 23, 2018
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Crypto Market Commentary
Return Of The Traders
Prices Fight Back After Another Small Correction
Today technical trading dominated as we saw Bitcoin briefly dip below $10,000 which was followed by a sharp snapback rally. While today’s movement was promising, correlations between major coins remained high, still pointing to a nervous, bearish sentiment in the sector.
The consensus among analysts is that bitcoin’s recent struggles are tied to increased pressure from regulators in a variety of jurisdictions. The cryptocurrency markets tend to advance in a boom-bust cycle that is largely tied to new regulations.
The single biggest dynamic driving cryptocurrency markets on a long time frame is the reflexivity of regulation. Crypto value rises sharply – it invites regulation that kicks it back down. 3 steps forward, 2 steps back.
The bulk of the recent bear market’s trajectory can be attributed to South Korea. The government’s executive branch has repeatedly issued conflicting statements about its stance toward cryptocurrency trading, making it more difficult for the market to achieve a firm footing. Clarity has been lacking since the original news came out in December, and has been repeatedly reported causing undue panic in the market.
Another effect hurting the market is that as of late the largest coin has little utility value outside of storing value and being the primary trading pair, although we anticipate that latter point to become less relevant in the coming months and years as it’s possible exchanges adopt their own currencies with which to trade on their platform. This diminished sentiment for Bitcoin is evident by today’s announcement from Stripe that they will discontinue support for Bitcoin payments.
That being said, the recent price action and “sell-off” in cryptocurrencies has been really good for Bitcoin. Even though mass adoption is the eventual hope, the network does need time to scale. While use and price are surging and the number of transactions skyrocket, it’s difficult to do that.
As we can see from this chart, the transactions per second in the past few weeks has dropped from an average 4.5 transactions per second a much more manageable 3.1. This lets the Bitcoin network have some much needed time to breathe.
Furthermore, we can see here that the number of transactions waiting to be added to the Bitcoin blockchain has been reduced from 150,000 down to around 60,000, a significant drop that is a much healthier number, though still not ideal.
Many things need to happen for Bitcoin to regain relevance in today’s world of instantaneous and fee-free cryptocurrencies, but as we saw this week, promising signals are emerging.
SegWit has been in place since August but users have been slow to adopt it. The Lightning Network, which has been in development for months, had its first few transactions this week.
While no one knows if these solutions are enough to regain Bitcoin’s status as a digital currency, it is promising to see signs of life in the world’s largest and oldest cryptocurrency.
Regarding the market sell-off over the past week, there has been no major breaking news that would point to a systematic breakdown of digital currencies or a global regulation crackdown. Along these lines, we should reason that this price action is due to the tremendous rise in price and we’re simply observing an ordinary pullback.
As we move into the tax season in the US, we are going to make it very clear that we are not touching taxes related to crypto. The one thing we will say is that if you are at the point where you are asking questions about crypto and taxes, it is good sense to seek out a professional accountant that will help you. Under no circumstances will we give tax advice because that’s not our job or expertise. This article and this website contain information we found useful.
As I mentioned yesterday, we will begin taking sign ups for our members only class starting tomorrow. The class will be held this Saturday and will be a nice primer for those new to cryptocurrencies and who want to learn the basics.
Have a great week and we’ll see you tomorrow.
Offense – Adding Trades
Offensive Actions for the next trading day:
- Expanded positions in ELF.
Defense – Managing Risk
Defensive Actions for the next trading day:
- Nothing specific for early this week; please see comments in holdings below.
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.
MyWish (added 1/23)
MyWish platform is an ecosystem of smart contracts accumulating a complex of blockchain solutions designed to integrate high technologies into the real sector.
TAU (added 1/21)
Lamden is a suite of developer tools that speed up the process of creating new and custom blockchains and apps. The Lamden Tau token connects these new projects together and with mainchain cryptocurrencies.
BNTY (added 1/21)
A decentralized bounty hunting platform enabling anyone to manage bounty programs, and bounty hunters to receive payment for completing bounty tasks.
ICON is one of the largest blockchain networks in the world. ICON boasts independent blockchains comprised of reputable institutions in major industries. ICON aims to build a decentralized network that allows independent blockchains with different governances to transact with one another without intermediaries.
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.
Simply put, ICON ($ICX) is a massive scale blockchain Platform that allows
- Decentralized Application (DAPPS) – Build DAPPS on ICON Platform like on Ethereum and NEO. Yes, soon, you will see ICOs happening on ICON platform for different DAPPS
- Interchain (Interoperability with Blockchains) – Allows different blockchains connecting to one another through their protocol. ICON is fully compatible with traditional blockchains like Bitcoin and Ethereum and in future can bridge other public blockchains such as Qtum, NEO and many others to achieve their mission statement – “Hyperconnect the world”
- Artificial Intelligence (AI) – Use of AI to ensure all nodes contributing to ICON Republic/platform are rewarded fairly and not to have certain powers over distribution policies. AI will continue to learn a variety of variables to determine optimal distribution policies and achieve complete decentralization.
- Decentralized Exchange (DEX) – ICON will integrate different DEX protocols on their platform to facilitate exchange of ICX and other future ICON platform currencies. Bancor protocol will be their first DEX protocol when mainent launches this month end and Kyber and others will follow. Not just throwing Kyber’s name out there, it was confirmed they are working with each other, official partnership yet to be announced.
Ripple ($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.
Fundamental Currency Research
Today, Jan. 23, markets are reacting a second time to news that South Korea will ban anonymous exchanges starting January 30, despite the fact that the information on the planned regulation has been available since late December and reported on since early January.
The market then recovered around 12 hours ago to post a much welcome lower high. The result is that the last 24 hours has been almost net equal for many of the large caps.
Bitcoin will soon have another hardfork to create ‘Bitcoin Atom’, which joins the list of forks such as Bitcoin Diamond, Bitcoin Cash, and Bitcoin Gold (notice a pattern?) that have split off in the past few months.
Weiss Ratings, an independent American rating organization, has reported that it will issue speculation letter grades for bitcoin and different digital currencies. The firm will, on Wednesday, become the first significant investment rating agency to issue grades for virtual currencies.
We anticipate the market is continuing to build up energy in anticipation for a breakout. Before that happens, we may see another dip which will shake off the last of the weak hands, which will be a fantastic buy-in opportunity.
Overall this week we are closely watching the price movement and will continue to watch this macro trend unfold.
Remember that ICON ($ICX) is launching its mainnet tomorrow. Additionally, coins are starting to get listed on Korean exchanges. Korean regulations are being set on the 30th. Icon’s summit is on the 31st. This is the perfect storm. Be sure to use tools like https://www.coinmarketcal.com/ to track upcoming cryptocurrency events before they are priced into the market.
IOTA can’t seem to catch a break this week. As we reported yesterday, IOTA wallets were hacked and now today a cryptocurrency hedge fund called it “sharply overvalued”. Multicoin Capital, based in Austin, Texas released their analysis of IOTA. While the analysis was primarily in regards to the value of the currency, it also explored what Multicoin Capital sees as the currency’s major flaws.
As always, we stay away from Pump and Dump groups because they are one of the leading ways new investors are scammed from their money. Use caution and always think through your actions, especially if you are new to this space.
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:
When – January 31st, 2018 and runs until February 14th, 2018
Token – STK
Supply – A total supply of 500 Million STK tokens will be created, with a maximum number of 275 Million STK tokens to be sold
Price – 1 STK = $0.10 – 10% Bonus available for the opening 48 hours
Platform – Ethereum
Accepting – ETH
Hard cap – $17 million
A link to the STK whitepaper
Where to participate in the STK token sale
Technical Analysis Research
- Bitcoin Cash
In today’s video I’ll show you a price action technique that I use to determine whether a chart is heading higher or lower; it revolves around a “Dow Theory” technique that’s nearly 100 years old, however has not changed over the years. The other concept that I covered today was that when prices do finally rebound, the money goes to the strongest ones first. .
If you haven’t yet had the pleasure of converting USD (or your own Fiat currency) to crypto make sure that you catch yesterday’s video in the Premium Home archive.
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.