Premium Daily Crypto NewsletterMay 15, 2018
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Crypto Market Commentary
Markets Continue Slow Decline
Despite Negative Prices, Positive News Continues
The market dropped slightly today, marking nearly a week of bearish movement. That being said, we had some massive developments today that are definitely worth looking over.
For one, Coinbase announced an impressive four new products today aimed at institutional investors.
“The cryptocurrency market is maturing rapidly as more sophisticated institutional participants enter the space. In fact, in the past few months over 100 hedge funds were created that exclusively invest in and trade cryptocurrency. Some of the world’s largest financial institutions have also recently announced their plans to begin trading cryptocurrency . . .
. . . We have leveraged our experience safely storing more than $20 billion of cryptocurrency to create Coinbase Custody, the most secure crypto storage solution available. In partnership with an SEC-regulated broker-dealer, Coinbase Custody is proud to offer a service that couples Coinbase’s cryptocurrency security excellence with third-party auditing and financial reporting validation that operates at the high standard of an SEC-regulated, custodial broker-dealer.”
Other than Coinbase Custody, the other big announcement was Coinbase’s new institutional trading platform, Coinbase Prime.
“We are also excited to announce the launch of Coinbase Prime, a new platform designed specifically to provide a suite of tools and services that institutional investors rely on when trading cryptocurrency.
This product will fill a missing piece of critical infrastructure needed for institutions. Over the course of the year we intend to offer lending and margin financing products to qualified clients, high touch and low touch execution services like over-the-counter (OTC) trading and algorithmic orders, and new market data and research products. We will also introduce platform improvements like multi-user permissions and whitelisted withdrawal addresses.”
The four products announced today – Coinbase Custody, Coinbase Markets, The Coinbase Institutional Coverage Group and Coinbase Prime – are all focused institutional investors and helping them enter the space. With specific concern paid to security and regulatory compliance, we see this as Coinbase moving the space forward. For the average retail investor, this is extremely good news as more money will be entering the space as a result. At the same time, trading platforms such as Prime clearly give advantages to institutional traders over retail traders.
As we’ve said in the past, institutional traders will roll over retail traders due to their experience and large order sizes. That being said, one advantage that current retail traders have is that they got in first, so regardless they will see their portfolios increase as more money enters the space.
Adam White, Coinbase vice president and general manager, was confident in saying:
“We think this can unlock $10 billion of institutional investor money sitting on the sideline. We’re seeing a rapid increase in attention awareness and adoption in the cryptocurrency market.”
We mentioned that Coinbase had been on a hiring spree recently to support an upcoming announcement, and it looks like today’s move by them confirms their intentions to bring traditional finance to crypto in a big way. Of these announcements, we’re most interested in the custody program which will make crypto easier to own for the average investor. Regardless of where you think crypto is headed or should go, that is a very noble goal.
As we discussed last week, the South Korean police raided the headquarters of UPbit to investigate possible fraud practices. The police had received tips that the exchange had been processing trades without actually holding user funds on their platform.
Operating order books without storing cryptocurrencies and pretending to hold large amounts of user funds would be a serious offence, and sent the market into a panic.
We’ve now received several insider sources that have stated that the investigation stemmed from a liquidity issue and a misunderstanding by the police and Korean regulatory agencies.
UPbit only operates trading pairs of around 90 cryptocurrencies, but they have over 130 cryptocurrencies listed on the platform. This is because Upbit shares liquidity with other exchanges. Once again we see the growing pains of traditional systems failing to understand the conventions of this new space.
Meanwhile, today marked the highly anticipated Bitcoin Cash Hard Fork, a move designed to add opcodes to the network and to upgrade the block sizes on the Bitcoin Cash blockchain. This upgrade moves the block size from 8Mb up to 32Mb, improving transaction efficiency and scalability.
32Mb was chosen due to some limitations in how the client itself currently handles networking and furthermore is just how the client was originally coded. When it was built, it was thought that 32mb would be more than enough for many years. With some changes to the protocol they can go beyond this limitation, and further scaling technology, like Graphene, is already being tested.
Essentially, it isn’t about today’s average block sizes. It is about ensuring the network can deal with huge traffic spikes when needed and continues working for several years from now without worrying about hitting any upper limit.
Today we were excited to see the world’s fifth largest bank, Mitsubishi UFJ Financial Group, announced they will trial a cryptocurrency as early as next year in limited areas within Japan.
MUFG Coin will be tested with 100,000 MUFG Bank account holders, who will be able to turn their fiat deposits into coins through a phone-based wallet app. One MUFG coin to be worth 1 yen, and the bank will be working with local businesses to accept it.
Once the account holders have the coins, they’ll be able to use it as ordinary money for paying in bars and shops that accept it.
While this isn’t quite the future we’d like to see (banks issuing crypto), we do see this as a very important step forward. For such a large bank to be so on board with crypto that they’re issuing their own coin is a big milestone for this space.
Meanwhile, Amazon’s AWS is looking to make it easier for customers to use blockchain with a new partnership announced today.
The tech giant will team with a new start-up called Kaleido, which was created out of blockchain incubator Consensys. The start-up is aiming to give AWS customers an “easy button” to get into blockchain.
“They can focus on their scenario and they don’t have to become PhDs is cryptography, we give them a simple platform to build their company on blockchain,” said Steve Cerveny, one of the founders of Kaleido.
“Introducing Kaleido to AWS customers is going to help customers move faster and not worry
about managing blockchain themselves,” Amazon Web Services said in a statement. “It is the first Blockchain SaaS solution available on the AWS Marketplace and will help them rapidly advance their blockchain projects.”
“They’ve been looking for partners to help get blockchain into their customers’ hands,” Cerveny told CNBC. “They’re putting it in the marketplace will accelerate what their customers are going to do with it.”
Overall, today’s market again does not reflect the massive developments that are hitting the space right now, which makes us certain that any recovery is going to be very fast to the upside with such suppressed price movement.
Make sure that you pencil in this Wednesday evening to your calendar as Doc is giving a free webinar on “Short Term Trading Strategies; Ten Ways to Trade Your Crypto in a Choppy Market.” This one is not to be missed as there are lots of opportunities in today’s market if you know where to find it, and if you know how to trade short-term.
To sign up for this free webinar please visit this link
Mav will be traveling to NYC tommorrow to participate in NYC Blockchain Week but will still be producing the Daily Premium Newsletter. Look for updates from him!
Talk to you tomorrow.
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Offense – Adding Trades
Offensive Actions for the next trading day:
- Expand ONT
- Upgrade ONT from T3 to T2
Defense – Managing Risk
Defensive Actions for the next trading day:
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.
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 ($XRP) is a real-time Payment protocol for anything of value. It’s a shared public database, with a built-in distributed currency exchange, that operates as the worlds first universal translator for money. Ripple is currency agnostic and has a foreign exchange component built right into the protocol. Ripple acts as a pathfinding algorithm to find the best route for a dollar to become a euro or airline miles to become Bitcoin. It will look at all the orders in the global order book. The case for XRP comes down to the following: 1) Payment systems work best with bridge assets to focus liquidity. 2) There are good reasons to expect a cryptocurrency to be the most popular bridge asset. 3) There are good reasons to expect that cryptocurrency to be XRP.
- Open, decentralized payments will have lots and lots of assets, including national currencies of all kinds and cryptos. A significant fraction of payments will be among assets that aren’t the most popular. Using intermediary assets to settle those payments concentrates liquidity and reduces spreads.
- National currencies are always tied to jurisdictions and can’t be universal. Systems built around them will never be as open and inclusive as systems that aren’t.
- XRP settles faster than any other major crypto. It higher transaction rates than other major cryptos. It is beat by others only by the amount of liquidity available today. And, most importantly, XRP has a company that is devoted to making sure XRP succeeds for this specific use case.
Simply put, ICON ($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:
For flipping Neutral.
For long-term holding Good.
What is it?
DataBlockChain.io is a revolutionary data platform that stands to disrupt the way that companies and individuals gather premium data. Our product will democratize data, making it more readily available and less expensive than the current methods of data gathering and vetting. The result is that clients can access specific data sets in a cost-effective and transparent way, collecting exactly what they need without paying for extraneous data. We will merge our own proprietary data with many of the world’s largest databases ranging from government data, industry specific data, voting records, business to business data, property data, credit bureau data, etc. to create a comprehensive variety of data sets valuable to individuals and businesses looking to both attract and retain clients. As a result of our platform, all participants will be able to obtain the exact, nuanced data they are seeking. Because DataBlockChain.io removes the middlemen in the data industry that tend to drive prices up and cause inefficiencies, no order size will be too small to fulfill. This opens up an untapped market of potential clients on a global stage.
What is our verdict?
What we like: Big data, AI, and Blockchain? That’s quite a combination.
What we don’t like: A smaller hard cap would be preferable, and a stronger go-to-market strategy would also inspire confidence.
Norway-based registrar organization DNV GL has invested in blockchain startup VeChain.
VeChain CEO Sunny Lu told CoinDesk that the companies would continue their partnership.
“We are able to provide with VeChain a solution that balances safety and [speed],” Luca Crisciotti, chief executive of DNV, explained, adding:
“Our mission is the ability to make sure that product is reaching the shelves, that it’s ultimately reaching the consumer … What we are providing to our customers is commitment.”
Meanwhile, ICON also had a large partnership announcement today.
“Unchain will create a blockchain ecosystem fueled by a token economy, where the users are rewarded for their contributions to the network. DApp services discovered through ICON and Unblock, a subsidiary of LINE dedicated to blockchain research and to accelerate DApp projects, will be integrated with Unchain. This joint venture takes blockchain and decentralization another step closer to being a part of our everyday lives.”
We found the following video to be a great summary of where we are with Blockchain today:
The Ontology Foundation and the NEO Foundation signed a memorandum of understanding on May 14th, 2018, concerning strategy and technology integration:
Whereas: Ontology is a distributed trust network that focuses on digital identity, data exchange and other trust collaboration scenarios. NEO is dedicated to realizing a distributed network that serves the smart economy. Both Ontology and NEO share a common technical understanding and vision, and both wish to promote blockchain technology and its applications.
Purpose: Ontology and NEO together provide compliance-ready, regulatable protocols to global developers. These protocols are supported by NeoVM with exceptional finality and a smart contract system with a robust and stable infrastructure-level network.
As such, the Ontology Foundation and the NEO Foundation have agreed to cooperate as follows:
Key Cooperation Areas
1. Ontology will provide digital identity, data exchange services and other customized services. NEO brings a mature and complete smart contract platform as well as distributed network infrastructure services to the table.
2. Smart Contracts: Ontology and NEO will work together to build a smart contract ecosystem, fully support the development and adoption of NeoVM and NeoContract, and collaborate on developing smart contract open standards.
3. Data Integration: Both parties will provide standardized technology interfaces (APIs, SDKs, etc.), and share and communicate development achievements and research results.
4. Cross-chain: Both parties will push forward with cross-chain research, with the eventual goal of producing integrable mainnets.
… We see this as an extremely promising step forward for both projects, and for the larger NEP5 ecosystem. The system of cooperation is one way this space moves forward, and we see NEO’s smart economy as a big part of that.
Technical Analysis Research
In tonight’s video I discuss how one could go “long” or “short” using a much more efficient derivative instrument vs. just buying the coin outright, especially in terms of Bitcoin. Bitcoin futures have been around since December, and while they are somewhat illiquid depending on time of day, they offer a superior way to either short the underlying market, or just hedge off downside risk. They are also the best possible day-trading instrument out there. These are mostly for US-based customers that cannot access some of the other derivative markets such as BitMex and Derebit. The market for crypto will continue to get deeper and better-equipped to provide opportunity and manage risk..
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:
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.