Premium Daily Crypto NewsletterSeptember 10, 2018
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Crypto Market Commentary
Mav's Daily Commentary
Markets Start Week In The Red
Selling Volume Thin And Shorts Are High; Reversal Inbound Or More Pain?
This week, unfortunately, started in the red.
We faced some negativity in light of the U.S. Securities and Exchange Commission (SEC) temporarily banning the trading of XBT Provider’s (https://xbtprovider.com/) exchange-traded notes (ETNs), Bitcoin Tracker One (CXBTF) and Ether Tracker One (CETHF).
Furthermore, Ethereum co-founder Vitalik Buterin predicted that there is “no chance” that the cryptocurrency and blockchain space will see “1,000-times growth” again. He remains resolute that the industry is now reaching a “ceiling,” and is moving from “just people being interested” to the stage of “real applications of real economic activity.”
To be clear, he is essentially saying the same thing we saw in the Gartner Hype Cycle for Emerging Technologies, 2018 report regarding Blockchain: Blockchain technology is at the edge of the “trough of disillusionment” phase in the cycle, though they predict that the technology may reach the “plateau of productivity” within the next decade. Take it for what it is: we’re moving from speculative value to utility value, which is absolutely needed.
In more bullish news for the industry, anonymous sources revealed that U.S. multinational bank Citigroup is developing a cryptocurrency product to give institutional investors access to crypto markets without owning cryptocurrencies directly. More on that in a bit.
Additionally, the crypto industry also saw the launch of two new stablecoins today.
The Winklevoss brothers, who own the crypto trading platform Gemini, received approval today from the New York Department of Financial Services (NYDFS) to launch their own USD-backed stablecoin, the Gemini dollar (GUSD). They were quick to claim that they have the world’s first regulated stablecoin, a clear jab at Tether and their lack of transparent auditing.
Another new stablecoin dubbed ‘Paxos Standard,’ also U.S.-dollar backed and NYDFS approved, has also been officially launched today.
The Gemini dollar is described as being backed by U.S. dollars that are “held at a bank located in the United States and eligible for FDIC ‘pass-through’ deposit insurance, subject to applicable limitations.”
According to Cameron Winklevoss, Gemini dollars have three key features:
- It’s issued by Gemini, a New York trust company and is strictly pegged 1:1 to the U.S. dollar.
- It’s “built on the Ethereum network according to the ERC20 standard for tokens.
- The Gemini dollar (ticker symbol: GUSD) combines the creditworthiness and price stability of the U.S. dollar with blockchain technology and the oversight of U.S. regulators.”
So, why is this important? We have had other stablecoins, such as Tether, Dai, and TrueUSD for a time now. For one, it can be tricky to use Bitcoins to pay for goods and services. Because of BTC’s volatility, a consumer-investor can significantly overpay or underpay for a product depending on the crypto’s steep price movement. A $1,000 laptop can cost $800 or $1,200 in a few hours or minutes. Moreover, it can be risky for merchants to accept payments in Bitcoin if its value suddenly plummets.
What’s more, as mentioned, Gemini dollars will correspond to U.S. dollars held at a U.S. bank and will be eligible for FDIC “pass-through” deposit insurance. That’s signifigant because, as Gemini points out on their site, they offer FDIC insurance for USD funds held with them, but not for crypto assets as, “The U.S. government does not provide insurance for any Digital Assets deposits.”
Additionally, Gemini’s USD deposit balance will be audited monthly by an accounting firm in order to verify the 1:1 ratio.
“The smart contracts underlying the Gemini dollar token have been fully audited and formally verified by an independent security firm, whose report is publicly available,” added Cameron Winklevoss.
This is important because having a verifiable, trusted stable asset will do wonders for adoption and use. Of course, Gemini dollars are currently only used on the Gemini platform, but this is an important step.
Now back to the Citigroup news mentioned earlier. Citigroup to allow institutional investors to purchase Bitcoin directly from them, eliminating the need for an ETF. This brings us closer to institutional investment because it provides more vehicles of capital transfer.
Citi has created what is called a DAR (Digital Asset Receipt), a security similar to an ADR (American Depository Receipt), which allows interested parties to invest in cryptocurrency without actually owning the underlying asset.
I’ll finish out today’s newsletter with a great interview with Hester Peirce, SEC Commissioner, and her thoughts regarding the current state of things regarding crypto’s legal challenges.
“There is a real value to having freedom of choice to make your own decisions. And that’s sort of the fundamental principle of what our country operates on, which is that people can make decisions and act in ways that they think are wise for their own lives.
It’s very difficult for me as a regulator to know what might work for an investor out in the middle of the country. I think, ‘Well, I can make a better decision than someone in the middle of the country.’ That’s ridiculous.”
Peirce believes that people should be encouraged to do a lot of research and ask a lot of questions before ultimately making their own financial decisions.
“I am very confident in peoples’ ability to make decisions for themselves, whether it’s in the crypto space or it’s in whether or not to invest in a small retail store in their hometown. I think people really have a fundamental right to spend their money the way they want to spend their money.”
Peirce also explains why she believes the SEC should get rid of accredited investor laws and make it easier for people on Main Street to invest in private companies.
“The accredited investor standard has served to prevent a lot of people from investing in certain segments of the market. And so I think that I would like to see it broadened so that more people could invest in more types of investments. I don’t actually think there’s a good reason to have an accredited investor standard at all. But I’m also a realist. And so given that we’re going to have an accredited investor standard of some kind, I think we need to take another look at it and see whether it encompasses the full range of investors who should be able to invest in private offerings.”
This week I’m traveling to San Francisco this week to speak at Blockworld, Stanford University, and attend the Litecoin Summit. I look forward to continuing this discourse with those in attendance.
Doc has started to do a frequent live “Trade School” video; watch for announcements and links in the “Premium Chat” room of our Discord site.
If you missed Mav’s webinar “Top Ten Ways to Create Passive Income With Crypto” then you can watch the webinar at this link.
We’ve started to produce episodes for The ReadySetCrypto Podcast; all of our episodes are posted on our blog (and on iTunes) and Episode Twelve is now available. Episode Twelve goes into the topic of “market manipulation.” Why it happens, when it happens, and how to protect yourself from it. Look for more episodes shortly as we comb the crypto space for valuable interviews, and create valuable content to keep you in the loop!
See you tomorrow!
Doc's Daily Commentary
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Offense – Adding Trades
Offensive Actions for the next trading day:
- Nice swing setup on ETP/BTC outlined in today’s video.
Defense – Managing Risk
Defensive Actions for the next trading day:
RSC Managed Crypto Fund
How to read this portfolio: Please read through the FAQ tab
- ETH/USD 2% added 8/10/2018 @ $363.14
- ETH/USD 2% added 9/9/2018 @ $200.50 (10% more to add)
- LTC/USD 2% added 8/10/2018 @ $62.56. (6% more to add)
What is the RSC Managed Cryptocurrency Fund?: We have one goal: To beat the market. To do this, we aim to balance risk vs. reward. Additionally, we aim to enter positions advantageously and in small increments, not all at once. As such, the pie chart you see above is representative of our “expected” portfolio, but will likely not match our “actual” portfolio. Why don’t you just buy into every position at once?: We aim to not only beat the market, but do so in a way that allows us greater leverage than simply buying in all at once. To do this, we will DCA into our positions to lower the average buy-in, and allow us greater yield from our initial capital seed. This also allows you the flexibility to follow our documented moves or immediately buy in when you want. We expect this will help you follow along easier as our moves are more deliberate. By setting targets for allocation, you know exactly how we intend to diversify our portfolio. Why are you only targeting large caps? Where is ____ coin?: We are targeting large market capitalization coins regardless of our belief in their viability as this enables us to diversify our risk and improve our chances of staying positive. We can hedge our bets by creating a fund that incorporates all of the major assets yet distinguishes between them based on the allocation. For example, we allocated more to Ethereum over its competitors as we feel it has more built-in longevity given its status as the default ICO platform. Of course, that can change, and as such we will be periodically rebalancing this fund as we redetermine viability and yield. Can I invest in this fund / can you manage my funds?: Not at this time. We are looking for ways to legally tokenize a fund such as this, but at this time no avenue exists for US citizens. Will we be adding small caps / ICOs?: It is likely we will be starting a separate fund dedicated solely to small caps / ICOs. We feel that the market simply isn’t showing favorable risk / reward signs for us to be trading them right now, but that will likely change soon. Why was the previous portfolio discontinued?: We felt it wasn’t correctly connecting with our customers as we started it in late 2017 and even during the 2018 bear market we were still very profitable. The same could not be said for customers who joined us during the bear market and tried to replicate our portfolio. Simply put: we wanted a portfolio that was easier to follow along with and less risky for our customers while still aiming for profitability.
RSC Altcoin-Exclusive Crypto Fund
Technical Analysis Research
In today’s video I showed a little bit of work on our crypto scanner, and uncovered potential setups on DOGE and ETP.
In August we introduced a new “fund” project that we’ll be creating over the next few months, in piecemeal form. I will be slowly and methodically creating a “fund” with (currently) 23 assets that we will do “live” or at least very plainly indicate where we intend to enter portions of assets. As long as the market continues grinding down in a bear, we will use sentiment-based entries to hopefully secure a better entry. All that I saw were bear flags tonight; we are close to some good entries on coins showing positive divergence on the RSI. Going forward into the end of this year my plan is to do a LOT more swing trading; what would really help is a decent derivatives exchange. I am looking for big things from Digitex in this regard, which will be a commission-free futures platform however all trades must be made in DGTX as the base currency. Put yourself on the waitlist for this platform by clicking here. I have started to acquire DGTX tokens at Mercatox in anticipation of them turning up their platform, and this looks to be a good candidate for a pump prior to the production event. Here are the recent swings that we’re tracking in the portfolio below; :
- DGB/BTC – long @ .00000608 (7/23). My target exit is .000008BTC.
- WTC/BTC – Long @ .00155980BTC (4/23). My target exit is at .002BTC.
- ADA/BTC – Long @ .00003931BTC (5/1) My target exit is at .00005BTC.
- ONT/BTC – long @ .0008905 (5/20) My target is .0013BTC.
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:
I hope you all got a chance to catch my webinar class from earlier this year; if not, the replay is available here. 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 street price with your member’s “coupon code” of member18crypto..
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 and/or Delta 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.
Fundamental Currency Research
For flipping Good.
For long-term holding Neutral.
What is it?
What is our verdict?
What we like: Supernodes are very interesting. No trading commissions for users.
What we don’t like: There are many exchanges already on the market. Transaction mining isn’t currently solvent.
- Project name: Bgogo Exchange
- Token symbol: BGG
- Website: https://bgogo.com
- White paper: https://bgogo.com/assets/white-paper/BGG-Token-Whitepaper-v1.8EN.pdf
- Hard cap: 17,000 ETH (15,000 ETH during private sale and to supernodes, 2,000 ETH during public sale) for 10% of total tokens
- Conversion rate: Private sale: 1 ETH = 66,666 BGG; public sale: 1 ETH = 69,999.3 BGG.
- Maximum market cap at ICO on a fully diluted basis: $51 million based on current ETH price of $300
- Bonus structure: Whitelisted public sale participants have a 5% bonus over the private sale price, with no lockup period.
- Private sale: The private sale has already been completed with 10,500 ETH raised from 21 supernodes and 4,500 ETH from strategic investors.
- White list: Bgogo’s public sale will be a Genesis Mining event (exact date to be confirmed) that will start 24 hours before mining is officially opened to the public. Only whitelisted users can participate. Details on the Genesis Mining event can be found here: https://bgogo.com/announcement?link=mining.
- ERC20 token: Yes (will be switched to native tokens when the mainnet is launched)
- Countries excluded: TBA
- Timeline: TBA
- Token distribution date: TBA
2017- 2018Q2 Portfolio (Discontinued)
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.