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January 30, 2018

 

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Crypto Market Commentary

FUD Round . . . 9?

Markets In Freefall

If you’re afraid of the market movement right now, watch today’s video below.

As regulations are on the horizon for cryptocurrencies (which is good!), they are under increasing scrutiny. With the death of Bitconnect, the largest cryptocurrency under the microscope is now Tether. Known as a stablecoin, Tether is designed to not oscillate in terms of of its per-coin value. As Tether is “tethered” to the US dollar, it is designed to always equal $1, or nearly $1. There are a number of advantages to Tether in concept: It protects you from market volatility and can act as a “safe harbor” when the market takes a dip, you can leave your money univested without assuming risk, and it’s much faster to convert USDT into Bitcoin and other cryptocurrencies than converting USD or any other fiat currency.

Any rational person would think there must a reserve, a la Fort Knox, for Tether, where they have 1 USD backing every 1 USDT for every 2.2B USDT in existence. But you’d probably be wrong.

Want proof? See how often they’re “printing” new Tether: https://twitter.com/tetherprinter?lang=en

Want more proof?

In 2017 their ToS stated they had no obligation to redeem Tether for property of any kind:

“We make no representations, warranties, or guarantees to you of any kind, including with respect to any right of redemption or exchange of Tethers for any property. The Site and the Services are offered strictly on an as-is, where-is basis and, without limiting the generality of the foregoing, are offered without any representation as to merchantability or fitness for any particular purpose.

– Tether ToS in November

They’ve now changed it to the more ambiguous, but still very ominous,

“Tether makes no representations, warranties, or guarantees to you of any kind. The Site and the Services are offered strictly on an as-is, where-is basis and, without limiting the generality of the foregoing, are offered without any representation as to merchantability or fitness for any particular purpose.”

For those not well-versed in legalese, this is the equivalent to them saying:

Tether is worth nothing and we can print as many of these magic internet coins as we want and you have no rights nor legal claims to said magic internet coins.

If they have a mechanism to print it like Zimbabwean Dollars, it means they’re fighting insolvency.

Here’s the thing: If USDT is not backed by a corresponding number of dollars, then Tether can print money arbitrarily.

This is dangerous for several reasons:

  1. As mentioned, it confirms Tethers are worth nothing.
  2. Those worthless Tethers once issued can be used to trade for legitimate currencies, unnaturally inflating the demand for those currencies.
  3. Unnaturally inflated demand causes prices to rise for the entire market. This is confirmed by how Tether is one of the highest volume cryptocurrencies.
  4. Tether is used to stabilize exchanges, and if it fails it could cause some exchanges to go with it, wiping out billions in investors money with them.
  5. A market loss such as this would significantly reduce faith in cryptocurrencies very much akin to the 3 year lull after the Mt.Gox incident.  

“It’s possible that a nontrivial rise in the price of bitcoin and other cryptocurrencies has come from this asset being printed possibly out of thin air, and that is very concerning,” Jill Carlson, former Wall Street trader.

Last week an anonymously published statistical analysis of tether released, suggesting that over 2017 the timing of new tether being printed was coordinated with dips in the price of bitcoin.

As confirmation of Tether’s illicit behavior, Today Bloomberg reported that the US Commodity Futures Trading Commission had sent subpoenas to Tether. If Tether has sufficient dollar reserves it may be safe, but many in the crypto space want to see an audit. Unfortunately, that may now be more complicated as only a few days ago Tether confirmed the relationship with its auditor had “dissolved.”

This being said, the subpoena was issued in December so even if Tether is a ticking time-bomb in many respects, it has still continued to operate even under legal notice of the US.

Whatever the outcome, we will not be using USDT in anything other than charting, and we are being extra vigilant to move funds off exchanges. Remember, if the exchange that’s holding your cryptocurrency suddenly disappears, you’ve lost your money.

This may have happened today when the exchange Bitgrail announced that they will be closing all non-EU accounts & liquidating their assets into BTC before sending it out. This caused a massive drop in the price of XRB (over 50%). They later released an update clarifying their position, but the damage has been done. We will not be using Bitgrail at any point in the future.

Facebook has banned the advertisement of ICOs and other cryptocurrencies for “misleading or deceptive promotional practices”. While a “ban first, ask questions later” seems extreme for a platform that is guilty of hosting far worse, what’s really going on here is Facebook wants to enter crypto under its own terms. While we’re not saying a “Facebook Coin” is in the works, Facebook is always looking for ways to monetize their userbase, and having a proprietary cryptocurrency is a step above their current offering.  

Mav and Doc will be traveling on Thursday and over the weekend and as such the premium newsletter may be delayed by a few hours past the normal release times. We apologize for this inconvenience.

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.

 

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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: 

  • We have exited many positions in response to market downtrend.

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 bloodbath is a continuation of the FUD in the market that has dominated January.

While Bitcoin edges ever closer to a “flippening” he king still has far to fall before the #1 spot belongs to another coin. When that happens, we will be in for some interesting and turbulent times, but it will be worth the ride. Similar to how this bear market is painful in the short term and beneficial in the long term, Bitcoin losing its position will be rough for many, but important for cryptocurrency to continue to grow.

According to NEO founder, Da Hongfei, “NEO will scale to 100000 tps by 2020 without sharding”. Obviously a claim like that with a time-frame of two years is easy to make and hard to execute, but NEO has been built from the ground-up to be a fast platform, so we fully anticipate this is within the realm of possibility. We are dearly holding on to our NEO.

Anticipate that we will either have a soft recovery or a continued downfall. Stick to your guns, if you’ve made it this far you can make it further.

Today Omisego hosted a town hall Wednesday, January 31, 2018 at 3:00:00 am (UTC time), where they will be answering questions, not making announcements: “Please note, Town Halls are for updates/feedback – not announcements.”

 

Modum had a very interesting CEO update that we enjoyed reading through. While not currently the strongest IoT coin out there, we continue to believe in the long term prospect for this project.

We’ve sold off many of our T4 and some of our T3 coins today as they had fallen below our stop limits. Having exit strategies in place is always a good plan.   

ICON ($ICX) scheduled their first annual Summit in Seoul for the 31st of January that is titled “The Genesis”. The most important talking points will be the release of their 2018 Roadmap and a demonstration for their main net. They will also reveal some DApps (Decentralized Apps) that will run on the ICON Network.

The summit is expected to last about 7 hours which means that there will not only be a significant segment for Q&A, there is also a lot of information to be shared in this meeting. While it is certainly possible there will be some “buy the rumor, sell the news” going on, we fully anticipate the amount of good news coming out of this summit combined with Korean traders finally getting the ability to buy their country’s first ICO will drive demand and price up.

 

 

 

 

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:

NEX

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. Exchange share tokens do not grow very fast, so flipping would not be a good strategy in most cases.

For long-term holding Good. NEX will be a very compelling alternative soon.

What is it?
NEX is one of the hottest ICOs on the NEO platform. As we see it, 2018 will be a year of many new decentralized exchanges.

You will be able use the token in the NEX exchange for a share of the fees taken by the payment service & exchange. This is very akin Binance’s and Kucoin’s tokens, which should give you a nice perspective on where this token is going.

What is our verdict?
This is a great one to consider!

Their team is comprised of founding members of the City of Zion, the NEO community developer group.

This means they have very close connections to NEO, one of our favorite coins out there.

We believe they could benefit from more marketing, but having a working exchange in place would certainly aid that endeavour.

Even if NEX is to solely focus on the NEO ecosystem, there’s potential to be a great winner.

TOKEN SALE: 25 MAR

  • Ticker: NEX
  • Token type: NEO BLOCKCHAIN
  • ICO Token Price: 1 NEX = 1.00 USD
  • Fundraising Goal: 25,000,000 USD
  • Sold on pre-sale: NO PRESALE
  • Total Tokens: 50,000,000
  • Available for Token Sale: 50%
  • Whitelist: NO
  • Accepts: NEO, GAS

Website: https://neonexchange.org/
Whitepaper: https://neonexchange.org/pdfs/whitepaper_v1.1.pdf

Technical Analysis Research

The current top ten coins by market cap (as of today):

  • Bitcoin
  • Ethereum
  • Ripple
  • Bitcoin Cash
  • Cardano
  • NEO
  • Litecoin
  • XLM
  • EOS
  • NEM

 

keep hammering on the point that in order to get a true, lasting bottom, the crypto market has to capitulate, or “give up” hope. I know that this sounds odd to those of you that have either not had the joy of experiencing a true correction in the stock market, or are new to the crypto market. But markets do not work on linear logic, they run counter to what “should be” which is why it’s such a black art to figure out the psychology of markets. Each low that we’ve seen over the last year in crypto was commensurate with the rally that preceded it, and based on the December rally, we may yet see a vicious low before this is done.

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.

 Icon (ICX) is still about the strongest coin out there and should rally strongly when the broader crypto market turns .

 

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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