Premium Daily Crypto NewsletterMarch 7, 2018
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Crypto Market Commentary
Series Of Events Take Crypto Out At The Knees
Worst Yet To Come?
Feeling seasick yet?
There’s a number of things causing today’s downturn, and all of them are temporary or non-issues. Let’s explore why!
First, CNBC reported that today’s downturn was caused by the Securities and Exchange Commission saying it will require digital asset exchanges to register with the agency:
“If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”
“The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not. Many platforms refer to themselves as “exchanges,” which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange.”
While this is potentially negative if the regulation was malicious or pointlessly burdensome, overall this is positive as regulation will help the average investor regain trust and will move us closer to institutional investment. Furthermore, this statement was nearly identical to Jay Clayton’s testimony a month ago, so we’re not at all surprised the SEC is moving forward with this.
Second on the FUD list, we learned today that a Mt.Gox trustee has been flooding the market, selling off nearly half a billion in Bitcoin and Bitcoin cash over the past three months.
It’s somewhat of a surprise to be sure, and we finally know who was pressuring the market when Bitcoin was at $6,000. You can see from the chart below that they transferred in their funds from wallets to exchanges right before the market sold off multiple times. While there’s many more factors at play in the market than the actions of a very large whale, we do believe this added fuel to the fire.
Next up on the list was “Japan FUD”, or rather a Japanese regulators preparing to regulate cryptocurrency exchanges.
From Nikkei, “The FSA [Financial Services Agency] sees unregistered exchange operators — five have been raided so far — as particularly problematic. Those penalized will face the choice of whether to meet the agency’s requirements and complete registration or withdraw their applications. Those not up to snuff might have to shut down.
The FSA’s first order to Coincheck demanded that the company strengthen oversight and management of systems implicated in the NEM hack. This time around, the FSA is expected to seek progress on a broader range of issues, including money laundering and corporate governance.”
We don’t think this is particularly FUD-inducing as this is a natural response by Janaese regulators after roughly 500 Million NEM coins were stolen from the Japanese exchange Coincheck. It’s clear they want to improve the security and compliance of exchange to meet standards and ultimately protect consumers from another Coincheck-esque hack.
Fourth on our FUD list is BitMEX having login issues. There’s nothing to suspect that they’re being hacked or have been hacked, and they are already back up to operational status. Next.
Lastly, and likely the biggest FUD-inducing news today, was Binance shutting down withdrawals following the realization that many users on the platform had funds stolen, where most were converted to BTC and then sold for Viacoin.
Viacoin has denied any knowledge of wrongdoing.
Binance has isolated the irregular trades and has announced they will be reversed. It seems it was due to users who had API keys enabled on their account and had visited a phishing website. Several ReadySetCrypto subscribers have contacted us letting us know they were affected so if you are, we highly suggest you open a ticket with Binance to ensure you stolen funds are returned. If you are having trouble getting a response, please let us know because we are not afraid to use our podium to help you get the attention you deserve from Binance staff.
Regardless if you were affected or not, please use this as a lesson to listen to us when we say”
Exchanges. Are. The. Least. Secure. Place. To. Store. Your. Crypto.
We’ve begun to highlight the best exchange for purchasing the cryptos we list on our portfolio, and we’ve also taken the time to identify what we believe is the best wallet for that cryptocurrency.
If the coin has myetherwallet.com listed, that means it is an ERC20 token and can be stored on a number of excellent wallets. MyEtherWallet.com happens to be our favorite, but if you want to be even more secure we’d recommend using a software wallet or a mobile wallet like Enjin.
Here’s a great article from Coinomi (another great mobile wallet!) explaining the different types of Ethereum wallets at your disposal: https://blockonomi.com/best-ethereum-wallets/
If we learned another from the Binance “hack” today, it’s that you need to be very sure of the website you’re visiting because it could easily be a fake set up to steal your information and crypto. That goes for wallets too. I’ve seen sophisticated operations where they set up a software wallet to look exactly like the official one, and once you sent your crypto to it they would just keep it for themselves.
As always, reach out to us at firstname.lastname@example.org if you need any help or have any questions about wallets.
Days like today may seem difficult, but we’re getting ever closer to the inevitable return of the bull, and we’ll enjoy the market uptrend together. Stick with it.
Talk to you tomorrow.
New to Cryptocurrencies? Check out our archived class “Intro to Cryptocurrency Trading” which is available for immediate purchase/viewing in the Premium Member’s Home. View more about it and watch the class today by visiting this link.
Offense – Adding Trades
Offensive Actions for the next trading day:
- Expanded WTC position
Defense – Managing Risk
Defensive Actions for the next trading day:
- Exited HPB position
- Exited POE position
- Exited ECC position
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.
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.
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
There’s not much to expand upon our top analysis from above, as the top 10 were all affected equally. If you missed our analysis regarding NEO yesterday, we put it into a video format below (which also covers the recent WTC downturn).
Most importantly, BTC is fighting to stay above the $10,000 level, as it’s a major psychological barrier.
With multiple bouts of bad news, the market is fragile and susceptible to these sorts of days while we don’t have the volume to ride them out. Remember that the crypto market is tumultuous and sways between positive and negative at a moment’s notice.
As we mentioned, we view these developments today as positive because we need to escape the sideways market and the only way to do that is to shake loose the weak hands.
Furthermore, this is the nature of an emerging asset class based around a new piece of technology. The volatility is a feature, not a bug.
As I said in my video, hardly anyone would be talking about it anymore as of this week, and I was definitely right about that yesterday when the WaltonChain team annouced through their Twitter and through a medium article that they would be signing a strategic partnership with Alibaba Cloud in order to pursue the areas of smart city solutions and blockchain application schemes.
The partnership would focus on:
1. Promotion of Waltonchain blockchain technology to achieve the municipal and commercial IoT coverage.
2. Establishment of new smart cities in Xiong’an and Yuhang.
3. Construction of smart city schemes and their application; resource allocation optimization and achievement of smart resource allocation through the blockchain + IoT technology.
Now, people were quick to point out that the deal wasn’t official, Alibaba hadn’t confirmed it, it’s not technically Alibaba because it’s Alibaba Cloud, which is pretty typical FUD talk, though it’s a little bit warranted with Walton because they did jump the gun a bit back in January with their announcement of a partnership with the China Mobile IoT alliance, but still, they wouldn’t go through the trouble of announcing this only to redact it later because it wasn’t true.
Well, that seems to have happened. As of this morning, the announcement disappeared from twitter and was replaced with a tweet that read:
“Due to the current uncertainty of blockchain policies, our team has decided that in the future we will announce major partnerships depending on the situation so as not to affect the real implementation of blockchain technology”
What does that mean? Why is that so vague? Did the team lie? Was the partnership fake? Are they a bunch of scammers like Bitconnect?
See, that’s the questions that you’d ask if you did nothing but follow the herd mentality and drink the FUD koolaid. To become smart money, you need to get away from just reading headlines, just reacting to the first thing you see, and diversify your sources. Unfortunately, this news is very fresh, so we don’t have a lot of sources to draw from here, other than people going absolutely ballistic on twitter and reddit, which is of no help.
So let’s fall back on our critical thinking here and try to see through the FUD miasma clouding our vision.
Remember that Walton is based in China and Korea, and the former is important because of the government running it and the overall treatment of blockchain technology there.
Remember that the communist party in China, the Central People’s Government, is very authoritarian, especially with information. What the government says goes in China, which may be hard for those of us in the West to comprehend.
So companies, especially startups with blossoming tech such as distributed ledger technology, need to play nice with the government if they want to succeed long term.
I’ve defended NEO in a similar manner. Those playing nicely with the Central People’s Government are going to do much better when China comes out in favor of blockchain, or rather develops their own brand of blockchain similar to how they police the internet.
Imagine buying into utility stocks just as they were just beginning to connect a country. The very first utility polls connecting communities. If you believe blockchain is the future, and you look at recent partnerships, Waltonchain is laying the foundation to lead China and much of southeast asia into a new technological era.
Ok, so how does this relate to the Walton partnership switch-a-roo that’s causing a FUD firestorm?
Well for one, the partnership has been confirmed to be intact by several of the team representatives, the walton knights, on the telegram. Of course, that’s not official just yet, but so far as I’m concerned nothing regarding the validity of the partnership has changed.
Secondly, given the vague nature and the frankly odd timing of it, it is not a big stretch of the imagination to think that a governmental official contacted the team and told them they need to go through official channels in addition to removing their announcement until it was properly sanctioned by the government. Yes, that is speculation, but it’s based on pretty solid conjecture given that’s how the People Republic of China works. Anyone proposing a differing theory, especially one about how Walton is a scam company and they made up the partnership deserves to be frowned upon for spreading irrational FUD.
So that’s the deal, they are likely just playing nice with the government, nothing’s really changed, and like I said in my last video about Walton, you are not the customer. They don’t care about how you feel. They are a B2B company and they’re much more interested in building business relations and being a leader in supply chain blockchain. With their mainnet releasing soon, anyone selling right now will likely regret it as the price is likely to recover once staking is implemented. Always remember before you sell out of a position: ask yourself why is the person on the other side of this transaction is buying and what do you think they aim to gain.
We have hit the stops for our positions in POE, HPB, and ECC so we have removed them from our portfolio.
ICX continues to be a problem-child as we nearly removed it from our portfolio today for being below the $3.00 stop, but at the time of writing it has recovered to $3.04, which means we will retain our position. If it drops below the stop again, we will try to re-enter at a lower position and enter with a stop this time.
Unfortunately, we are not happy with ICON’s performance as of late, but our fundamental analysis is very strong in this one, so we are not ready to give up on it. As ICON regains its footing and starts to have some good news, we anticipate it will have a strong Q2 into Q3.
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?
Nexo delivers the World’s First Instant Crypto Overdrafts, thus resolving a crucial inefficiency for the crypto world. Up to this very moment, no alternatives existed for digital asset owners to enjoy their crypto wealth except selling them. The innovative model of Nexo brings to the crypto community the best of both worlds – retaining 100% ownership of their digital assets while having immediate access to cash. The Instant Crypto Overdrafts are an automatic, flexible and cost-efficient way of obtaining liquidity that is secured by the value of the client’s digital assets. The whole process is completed in just a few simple clicks. No hidden fees, no capital
gains taxes, no credit checks. Transparency is guaranteed through the use of blockchain technology, smart contracts and algorithmic processes executed by the Nexo Oracle
What is our verdict?
What we like: Based on a company that has existed for 10 years. Clearly know the space and the opportunity.
What we don’t like: Competition such as ETHlend and Salt which are far ahead. Concerns about security listing ability and volume.
- Project name: Nexo
- Token symbol: NEXO
- Website: https://nexo.io/
- White paper: https://nexo.io/assets/downloads/Nexo-Whitepaper.pdf
- Hard cap: $52.5 million (ICO participants receive 52.5% of total token supply)
- Conversion rate: 1 NEXO = $.10
- Maximum market cap at ICO on a fully diluted basis: $100 million
- Bonus structure: 15% for public presale, undisclosed for private presale
- Presale or white list: Public presale whitelist closed on February 28, 2018, waiting list open, register here: https://nexo.io/
- ERC20 token: Yes
- Countries excluded: China, must be accredited investor for USA
- Timeline: Public presale begins March 6, 2018, with public sale planned for April 2018 (please refer to Nexo’s website for the most up-to-date information)
- Token distribution date: Shortly after conclusion of token sale
Technical Analysis Research
I’m actually taking the optimistic side of this ruling, in that some regulation might actually be a good thing as this asset class grows up. And when it does so, it will attract more institutional capital and more derivative trading instruments. That’s the end game here, so this is just one more step to that point. I mean, did someone honestly think that there would be NO attempt at SEC regulation?
More security concerns as some customers on Binance reported that their APIs were hacked, which is exactly how Profit Trailer works. I’m not sure if it was an actual profit trailer connection or just a simple API connection to a third party trading platform like Coinigy, however there are a couple of things that you can do to help ensure better security. Make sure that you do not enable deposits:
Yes, I am allowing unrestricted IP access because my ISP tends to move addresses around a lot. My solution to that is to change keys on a regular basis.
In Tuesday’s video I showed another new tool that Mav stumbled upon, trade.whaleclub.co which allows you to define a practice trading account that would be very useful if you’re working on a new trading strategy.
If you go to buy any of our courses at our online “store” you can receive $10 off the $59 street price with your member’s “coupon code” of member18crypto..
With overall crypto markets in a dull corrective market, I’ll continue to focus more on the larger cap coins until they break loose, then it will be a better market for alt-coins. Moves are not sustaining right now.
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.
I will also be experimenting with the Profit Trailer app which might be useful in this choppy market.