Premium Daily Crypto Newsletter

May 9, 2018

Crypto Market Commentary

Markets Level Off

Bitcoin Looking Strong Against Alts

Today saw us neutral in the market, with a sharp mid-day slump ending with a mild increase in price, which is very similar to what we’ve seen over the past couple days. As we mentioned yesterday the red candles had become less and less severe, and today’s neutral result is the first time this week we haven’t ended clearly in the red.

One cause of this stalemate could be that there’s no actionable news in the market today. Overall it just hasn’t been a very exciting week.

That said, there are still things we can discuss.

Yesterday’s hearing in the U.S. Congress on Blockchain and supply chain management had a great speech from SEC Commissioner Hester Peirce, who said:

“The law deserves respect, but technological progress should not be bound by the limits of the regulator’s lawyerly imagination.”

“My fear that regulators will grab hold of the shovels and buckets is why I am often wary of so-called regulatory sandboxes.”

“I recommend that the SEC set up a web page devoted to questions and comments about ICOs, tokens, distributed ledger, and other crypto concepts.”

“Unlike many other innovations in the financial world, much of this development is being done—not by financial firms, which are steeped in our regulatory environment—but by firms in the technology space, which may be unfamiliar … with the agency.”

“Undue focus on potential harm can result in an agency’s leading with its enforcement powers, & ultimately setting itself up as industry’s adversary. While a regulator should not be too chummy w/ the industry it regulates, creating a hostile relationship carries its own risks”

“Even if the agency side-steps this trap, it may fall into another. The regulator may insert itself inappropriately into the creative process. The regulator should be careful not to try to control the development of new technologies.”

This comes after other very positive and well-thought statements from the Commissioner. Speaking at the Medici Conference on May 2, Commissioner Peirce spoke to the audience:

“My fear that regulators will grab hold of the shovels and buckets is why I am often wary of so-called regulatory sandboxes. I am entirely in favour of finding ways to make appropriate regulatory allowances that clear the way for innovation to flourish. What troubles me about sandboxes, however, is that the regulator is typically sitting there next to the entrepreneurs.”

So-called “Blockchain sandboxes” have become increasingly popular amongst regulators around the world, and advocates argue that they are a means of satisfying the needs of regulation without impairing innovation. Lithuania, Bermuda, and most notably Malta are among some countries experimenting with the idea.

Meanwhile, a new version of the code of Casper, a planned improvement to the Ethereum’s consensus protocol, has been released.

The Casper v0.1 “First Release” code was posted on GitHub.

The lead developer gave feedback on Reddit, saying:

“More than just the research team is using the contract now — auditors, client devs, etc — so we wanted to start issuing clearer versioning and changelogs to help everyone stay organized.”

Casper will reportedly combine Proof-of-Work (Mining) with Proof-of-Stake (Staking) consensus, with the end-goal of having Ethereum be completely staking only. This is in response to the problems that cryptocurrency mining have suffered from, namely a large energy profile and node centralization through ASICs. Essentially, staking does not use the massive amount of electricity that people often criticize mining for, and it (theoretically) promotes better network stability as investors are incentivized to hold their coins providing better network resilience.

We’re eager to see the changes coming to Ethereum and what that will do to the larger crypto space. Ethereum’s announcement of the move to staking sent shockwaves throughout the community and has influenced many other projects to pursue staking over mining.

Last for today, Cameron and Tyler Winklevoss have won a patent application regarding exchange-traded products (ETPs) using cryptocurrencies.

“The present invention generally relates to systems, methods, and program products for use with exchange-traded products (‘ETPs’) holding digital assets and other products and/or services related to ETPs holding digital assets.”

While derivative-based cryptocurrency investments already exist as Bitcoin futures, no ETPs exist for the US cryptocurrency market yet

Their company, Winklevoss IP, has managed to secure five patents since the start of 2018. The previous patent aimed to improve security in crypto transactions using a number of common cryptographic techniques.

The Winklevii have previously applied for a Bitcoin ETF, but so far no company has been able to receive approval from the SEC. We suspect that ETF approval won’t occur until the SEC is ready to move forward with its regulations for crypto and they’ve allowed the space to mature somewhat. We look forward to that day that is inevitably coming.

 

Talk to you tomorrow.

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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

https://docs.google.com/spreadsheets/d/1Tv_zMZDRm0uJlxxG3_YBIAiGT7vAOE_AUAwQyiRKP5c/edit?usp=sharing

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

XVG

NULS

DNA

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

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 and are highly risky. 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

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:

 

OneLedger

For flipping Good.

For long-term holding Good.

What is it? 

OneLedger enables you to focus building your business application through OneLedger modularization tools, which will communicate with OneLedger protocol using its API gateway. This mechanism will make your business application interact with different public and private blockchains synchronously through corresponding side chains implemented in OneLedger platform.

 

What is our verdict? 

What we like: One of the best interoperability plays we’ve seen. Being targeted to enterprises means they will be better suited to solve specific problems compared to more broadly focused chains.

What we don’t like: Interoperability is quickly becoming a crowded space, and the team’s MVP isn’t publically accessible.

  • Project name: OneLedger
  • Token symbol: OLT
  • Website: https://oneledger.io
  • White paper: https://oneledger.io/wp-content/uploads/2018/04/oneledger-whitepaper.pdf
  • Hard cap: $15 Million total, with $5 million available for the public crowdsale (Contributors will own 35% of the total supply)
  • Conversion rate: 1 OLT = $0.052
  • Maximum market cap at ICO on a fully diluted basis: $43 Million
  • Bonus structure: 25% bonus for $6 million, and 20% bonus for $3 million
  • Private sale / white list: KYC registration starts May 9, 2018 at 12 PM EST, and goes until May 16, 2018 at 12 PM EST
  • ERC20 token: Yes
  • Countries excluded: U.S. / Canada / China / South Korean / Barbados & other FATF countries like Ethiopia, Iraq, Serbia, Syria, Trinidad and Tobago, Tunisia, Vanuatu, Yemen, Iran, North Korea
  • Timeline: TBA (Estimated May start and finish) (please refer to OneLedger’s website for all up-to-date details)
  • Token distribution date: TBA

Website: https://oneledger.io

Whitepaper: https://oneledger.io/wp-content/uploads/2018/04/oneledger-whitepaper.pdf

We exited our position in KIN in response to it sharply dropping on Tuesday. This was likely in response to the announcement that “Kin Launches Own Blockchain in Race to Be the Most Used Cryptocurrency in the World” It’s a big bet and could set them up if they can pull it off, but it’s also a gamble. We’ll continue to evaluate this position if we think it’s worth re-entering.

 

A pair of Congressional subcommittees will update their continuing mission on blockchain technology during a hearing tomorrow. Tomorrow’s session will be more narrowly focused compared to a similar hearing held in February. While the February event covered blockchain applications beyond the realm of cryptocurrencies – tomorrow’s hearing will focus on blockchain’s use in supply chain management. A representative for Lamar Smith, the chairman of the House Science Committee, said they will host “experts in intellectual property, cybersecurity, as well as shipping and logistics.” Rep. Roger Marshall, referred back to their past work and said tomorrow’s meeting builds on that: “This hearing will build upon the previous one, which explored the science behind blockchain technology. I know the intent of the hearing is to be informative but look forward to seeing where the discussion will go and the questions my colleagues ask,” he said “The committee has an interest in supply chain risk management (SCRM) through our jurisdiction over the National Institute of Standards and Technology, or NIST, which has worked extensively on SCRM,” press secretary Brandon VerVelde said, adding “This hearing is intended for information-gathering for the committee members. We look forward to learning a lot from the witnesses.” Meanwhile, we just saw EOS move a huge amount of Ethereum, the currency they hosted their ICO with, from their wallets into Bitfinex. This could signal that they intend to dump over 200,000 ETH, or over $150M worth. This could be in response to their upcoming mainnet release, or it could be in response to the SEC hearing on Ethereum today. Whatever the case, such a large dump would certainly have huge implications on the larger market. On Sunday, HBO’s popular comedy “Silicon Valley” had an episode which dealt with cryptocurrencies. While cryptocurrencies, and more specifically ICOs, weren’t portrayed in the best light, we think this is a great way to get people talking about crypto. Check out this humorous scene from the show:

Technical Analysis Research

Recent gains in the Crypto markets are still being consolidated.  We don’t have any setups right now, let’s be patient for the setups to come to us.  In today’s video I discuss a couple of hot coins, ZIL and ONT.  Here are the recent swings that we’re tracking in the portfolio below:

 

  • WTC/BTC – Long @ .00155980BTC (4/23). My target exit is at .002BTC. Doing just fine.
  • ADA/BTC – Long @ .00003931BTC (5/1) My target exit is at .00005BTC.

Please keep in mind that if you want to follow these trades, I am using FIXED RISK POSITION SIZING. This means that I am using a fixed amount of risk capital that is based on my account size, like 2%. I am assuming that the trade will burn to the ground and that I will lose that entire capital position! Only in this manner can one effectively manage a position the way that you have to. If you’ve every checked your blockfolio nervously every 5 minutes when you’re underwater, this will prevent that.   I will track these positions in this area and not in the main portfolio section. I will use a public portfolio tool to do so, which you can access by clicking below:

Public Swing Portfolio Link

If you missed my earlier webinar, “More Profits in 2018; Ten Ways to Chart Like a Pro.” then you can catch the replay here.   My new class “Introduction to Technical Analysis” is now available via our online store.

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..

We’ve started to do some swing trades on alts, tracked in the previous section. I am mostly focusing on the top 10-20 coins for now until we confirm that we’re back into an overall bull market.

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 am also trialing the Profit Trailer and CryptoHopper trading apps which are working well in this choppy market.

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