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March 19, 2018

 

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Crypto Market Commentary

Crypto Rebound

Can We Sustain This Move?

History doesn’t repeat, but it does rhyme.

On this exact same day last year, we saw a market reversal that led to a three month bull run. While it probably had little to do with that exact day, and a better argument could be made for March 26th, we thought it was amusing that the Zimbabwean New Year is starting to play a role as a date to watch in the crypto markets. No correlation just yet, but we’ll see what happens next year on March 19th.

 

I think we can agree today’s movement was less due to the Zimbabwean holiday and more due to the multiple pieces of good news that have come out.

 

As we said over the weekend, the G20 summit meeting tomorrow is on everyone’s minds.

 

While there are some in the G20 that are openly critical of the blossoming sector, the ruling for now is that they don’t constitute enough of a threat to the status quo to warrant combined action.

 

According to Reuter’s, the Financial Stability Board (FSB), which coordinates financial regulation for the Group of 20 Economies, resisted calls from some G20 members to regulate cryptocurrencies like bitcoin.

 

“For now, crypto-assets don’t pose risks to financial stability, partly because they are still small relative to the financial system. Even at their recent peak, their combined global market value was less than 1 percent of global economic output,” FSB Chair Mark Carney said in a letter to G20 central bankers and finance ministers who will meet in Buenos Aires on Monday and Tuesday.

 

“As its work to fix the fault lines that caused the financial crisis draws to a close, the FSB is increasingly pivoting away from design of new policy initiatives towards dynamic implementation and rigorous evaluation of the effects of the agreed G20 reforms,” Carney continued.

 

In a sign of too little consensus for radical action, the FSB said more international coordination was needed to plug data gaps in monitoring the rapidly evolving but still tiny sector.

 

We’re personally seeing this as good news for now, but we cannot ignore the implications of a uncertain regulatory environment. The market needs proper regulation to prevent abuse of a blossoming technology, but the nature of this asset class is outside established parameters, hence there’s a lot of talk but little action.

 

One of the best things for crypto as a whole would be regulatory certainty. Today’s FSB remarks tells us that we are still a long ways off from a coordinated effort to pass regulations by multiple countries. On one front, that means that a “wild west” environment will continue on for the foreseeable future enabling huge potential gains for the skillful and the lucky, but on the other end it means liars, scammers, hackers, and market manipulators will continue to infect the space. For the short to mid term, we’re going to have to be ready to see the market move billions in mere hours because of the irrational and immature state of the market.

 

Regulation and stability will come to crypto. There’s no scenario where the countries of the will continue to ignore an emerging asset class that is now accounting for almost 1% of the world’s economic output. Always be aware that crypto is going to be turbulent until we better understand how to value them and the nations of the world begin to curtail volatility with regulations that seek to make this a more viable space for the average investor and institutions.

 

Essentially, where we’ve been is going to pale in comparison to where we’re going. Hold on tight.

 

We also received a bombshell from the U.S. Government today.

 

The March 2018 United States Joint Economic Committee Report officially endorsed the future of blockchain technology and cryptocurrency in the U.S.

 

Chapter 9 of the report discusses blockchain, and is titled “Building a Secure Future, One Blockchain at a Time.” Chapter 9 begins by saying Blockchain is “not only nearly invulnerable to cyberattack but is revolutionizing the way the world conducts commerce and shares information.”

 

The Ch. 9 report lays out three main points about blockchain. p. 201

  1. Blockchain is a potential tool for securing America’s digital infrastructure, protecting against economic losses, cyberattacks, and threats.
  2. Blockchain technology became mainstream in 2017, and provides both cybersecurity and many other potential benefits.
  3. Blockchain technology could revolutionize the world’s digital landscape and economy. Blockchain innovations and markets present U.S. institutions with unique regulatory challenges.

 

The report encourages Congress to find solutions that balance the needs of consumer protection, security, and entrepreneurship. It pushes for a common and coordinated regulatory framework that creates clarity in the industry, which is certainly needed. As we’ve seen from other hearings in Congress, it recommends regulations that are not overly prescriptive or constraining, so blockchain technology will be allowed to reach its full potential.

 

The conclusion on pages 225 and 226 makes four recommendations:

  1. Policymakers and the public should become more familiar with digital currencies and other uses of blockchain technologies, which have a wide range of future application.
  2. Regulators should continue to coordinate with each other to guarantee coherent policy frameworks, definitions, and jurisdictions.
  3. Policymakers, regulators, and entrepreneurs should work together to ensure developers can quickly deploy blockchain technology to protect Americans from fraud, theft, and abuse, while ensuring compliance with relevant regulations.
  4. Government agencies at all levels should consider and examine new uses for blockchain technology to help make the government function more efficiently.’

 

Overall, this is an enormously positive endorsement from the U.S. Congress. We will likely see cryptocurrency and blockchain technology flourish throughout the United States. It is a bright future for Americans involved in blockchain technology and the cryptocurrency marketplace.

 

The last thing we want to leave you with today is Kevin O’Leary in a  CNBC interview where he claims asset-based coins will eventually replace small cap stocks. It’s a very interesting three-minute interview, so we recommend you give it a watch.

Talk to you this week.

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Offense – Adding Trades

Offensive Actions for the next trading day: 

  • None.

Defense – Managing Risk

Defensive Actions for the next trading day: 

  • None.

Current Portfolio

Desired Holdings

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.

None.

None.

Tier 2

MOD

 Tier 3

REQ

SUB

LINK

NANO

KNC

Tier 4

BNTY

TAU

WISH

PHR

LOCI

XBY

ELA

ECC

POE

HPB

BIX

EVE

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.

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.

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.

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

While we don’t think just “hodling” or holding your crypto without care to the price is the best strategy in crypto, the results do speak for themselves. For example, as this chart illustrates, the median time to double your money with Bitcoin over the past 7 years is 189 days. Of course, if you were to pay attention to price fluctuations, that could easily be a smaller amount, but 189 days to double your money is still no joke.   Consider that we’re only 78 days into this year. There’s positive movement, the positive sentiment is growing even if mainstream investors have largely moved on, and governmental regulation is starting to look favorable.   People will try to tell you that this bear market was predicated on nothing other than manipulation, and to some degree they’re correct, but that largely ignores the “bad blood” that we’ve been able to wash away with this correction.   Crypto still needs to let go of a lot of baggage holding it down, and I personally don’t see that happening without the intervention of other markets and institutions. While a truly decentralized economy is a beautiful concept, it appears that most people just aren’t ready to accept it or leave their traditions.   People value stability with their money. The 2008 financial crisis was cathartic because it woke everyone up to the infestation of bad practices and out of control debt, but most people were more concerned about how it affected them rather than changing the system for good. We’re already back to exceeding the levels of personal debt we had before the world economy crashed, and the actions of the Fed were more “delay and obfuscate” than “fix”.   So, I don’t think society is ready for a completely decentralized economy the way Satoshi envisioned. Is that a bad thing? Not quite. Society isn’t ready for self-driving cars or fully autonomous factories, but we’ll get there. Progress doesn’t slow down for the laggards.   In the meantime, we get to enjoy the future being built by our investment, even if we can’t truly see it yet. The companies and investors who laid the cables that built the internet couldn’t truly see the future, but they knew the promise the tech held.
We’re continuing to target as many entries and re-entries as we can, given that we anticipate there may be a continued downturn in store. That being said, we are also looking for positive indicators that this upturn can remain bullish, but without sustained volume returning to the market, we might see today’s gains lost.
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:  

ELIGMA

For flipping Neutral.

For long-term holding Good.

What is it? 

Eligma, a cognitive commerce platform, will be connecting existing e-commerces and second-hand marketplaces into a one-point-stop for users. By harnessing AI and blockchain technology, Eligma is changing the way users discover, purchase, track and resell items online.

 

What is our verdict? 

What we like: A blockchain “Ebay” is a very novel idea, and there have clearly been great efforts from the team.

What we don’t like: Needs to do more to stand out and be different from existing solutions.

 

20 days (PREICO)

Token
ELI
Price
1 ELI = 0.1 USD
Bonus
Available
Platform
Ethereum
Accepting
ETH
Minimum investment
0.1 ETH
Soft cap
3,000,000 USD
Hard cap
24,000,000 USD
Country
Slovenia
Whitelist/KYC
KYC & Whitelist
Restricted areas
China, Singapore, South Korea, United States of America, Canada

Website: https://www.eligma.io/

Whitepaper: https://www.eligma.io/pdf/ELIGMA_white%20paper_%20v1.0.pdf

Technical Analysis Research

Stocks go down today and crypto goes up. We’ve seen this before on down days in the stock market. Crypto awaits the G20 summit and any news coming from that forum.   Richard wrote in this morning with a question, “Please discuss the issue of selecting an exchange for chart display and technical analysis in the nightly premium video. I’m curious as to why you don’t use bitfinex if it has by far the largest BTCUSD volume.” I had been taking the default exchange from TradingView when bringing up a coin for my watchlist, and the other day I noticed that BTC was pulled from Bitstamp. Looking at coinmarketcap.com, Bitstamp is the #9 exchange with respect to volume, so Richard is quite correct in his challenge. A little digging and it was quite easy to pull down the Bitfinex BTC exchange…I’ll show that in tonight’s video. I will spend some time over the next few days to ensure that all of my pairs are using the highest-volume exchange for that coin. If you trade a fiat currency other than the USD you might want to check this as well; for instance, bitFlyer is the highest BTC exchange for the Yen.   FINALLY…I have my ProfitTrailer bot up and running on a spare workstation, and has already done a number of profitable trades since yesterday. I’m somewhat uncomfortable that I’m just using default settings and likely today’s profits are due to a wee bounce in crypto today. Make no mistake, any trading bot that you use is only as smart as whomever programs it. I will need to do a LOT more work on this end.   Mav has announced and listed his new class this week, “How to Find Your Next Big Cryptocurrency.” and if you missed his webinar last  Wednesday night, it’s available in the Premium Member’s Area under the “Classes Archive.” It’s also listed for sale under the “STORE” link at the top of our page.

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.
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.

 

I will also be experimenting with the Profit Trailer app which might be useful in this choppy market. I hope to share results and tips/tricks with you in here once I get this bot up and running.

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