The CryptoCorner Newsletter 2-20-18
We are going to stick with putting our weekly settlements at the top of the letter. We feel it gives you the reader an easy visual of this week’s Crypto trading activity and well let’s face it, gets right to the point:
As you can see from the data it was a very good week in the space with the majority of the Crypto that we follow posting decent gains. The one outlier was Ethereum and serves them right as Vitalik has been active on Twitter trying to play devil’s advocate and warning of the volatility of the Crypto space. Word of advice and one we directly tweeted to Mr. Buterin was “stick to what you know,” he has no business quantifying risk and we would rather him stay within his programming realm. We hate to say it but the community obviously didn’t take it too well and thus Ethereum was actually down on the week. Look anyone getting into these things, should first, well let’s be honest read the CryptoCorner, then dig deep into the Crypto you want to invest in and understand it. This is a new frontier and one which we think will have tremendous growth and with that comes volatility. For those that think they can just toss some money in and disregard all risks, well they merit losing everything. No responsible investor we know would do such a thing. So, we always promote research before diving into the abyss.
Before we dig in, we have to congratulate the state of Wyoming for all of its progressive actions toward passing some massive pro Crypto bills through their house. The blockchain filings bill, the series LLC bill and the Bitcoin and ICO bills are onto the Senate. Wyoming is taking a proactive route and one which certainly doesn’t surprise us in the least. These bills have the ability to challenge crypto taxation and are a more realistic approach to spreading the positive adoption and ensuring proper regulatory growth in the Blockchain and Bitcoin ecosystem. We will keep you posted, but if they pass, Wyoming will be a safe haven for Crypto investors and expect to see a huge reception from those in the Crypto space.
OK, getting back to this week’s gains, the big winner was Litecoin as it rose 36.3% to $229.50. This is in no doubt in response to the announcement made this week from the Litecoin core developers, who announced that its “Litepay” eCommerce solution is ready for roll out. This is expected sometime in the next week, what is Litepay some may ask?
Well it’s a multitude of things first and foremost it’s Litecoin’s version of an instantaneous payment infrastructure. Basically, it’s like Visa/MC but using Litecoin, merchants get the benefit of instantaneous conversion to fiat and the user pays a 1% fee. Another great feature is that the platform is also a Litecoin wallet and debit card. These are huge and we mean YYUUGGEE advancements and as we have stated before, we aren’t sure which crypto will come out ahead, but the race will be damn fun to watch. Litecoin is certainly making strides and this new rollout is going to mix things up a bit with its larger Bitcoin rival. For more information of this absolutely exciting new feature, readers can visit the Litepay site Here
The fact that users will now be able to access fiat currency thru any ATMs that support Visa payments like any other debit card is truly a monumental advancement for Litecoin. We will continue to monitor the subsequent roll out and adoption in the coming weeks, as for now, Litecoin prices have certainly benefitted.
The other big story last week was the announcement of the Bitcoin Core code release version 0.16.0. This update is strictly focused on SegWit. SegWit has been in place since late last year, but this new rollout will make it possible for users to utilize all the benefits. SegWit address will now be the default and all the benefits of the scaling features will be accessible. What does this mean all mean? It means lower fees and further progress in the Bitcoin core ecosystem as well as other more flexible storage opportunities.
Ripple hasn’t really moved much past $1 but this week the Saudi Arabian Central bank was reportedly test piloting xCurrent the Ripple based product. Santander is also in the midst of using xCurrent for its mobile payment app. Considering Ripple isn’t truly a Crypto, more of a distributed ledger real time gross settlement system, maybe its valuation will not fluctuate much given its utility as a currency transfer mechanism. We aren’t really sure the public is sold on its advantages of a traditional Crypto, but only time will tell whether or not it merits company in the camp.
Plenty of news this week on BTC address 3Cbq7aT1tY8kMxWLbitaG7yT6bPbKChq64 which bought 41k BTC at a reported average price of $8400. Now unless someone digs deep, we don’t know if this is a miner, a wealthy punter, or an exchange in anticipation of having to have some BTC on hand for a few of the demand #HODLERS. We will continue to monitor the wallets and despite all the counter claims of Bitcoin being a ponzi scheme, we have really yet to see any of the large top wallets sell out. In fact it seems like they add on down moves and do the prudent thing like any other smart investor would and shed a few on large up moves. So if anyone ever says this space is illegitimate or a ponzi scheme tell them to get lost and get informed, they haven’t got a clue. We also keep hearing the likely comparisons of Tulip Mania. This is also very unwarranted and as we wrote many times in the past, that whole situation was clearly misunderstood, but to compare Bitcoin to that is certainly disingenuous. All you need to say is look the Tulip Mania was one gigantic rise and fall, whereas Bitcoin has done that same thing 9x now. Each and every time it has dropped even 70% from its highs, its climbed back to make a new high. We feel this time will not be any different.
We honestly feel that the Crypto space is a vast and immense asset class that is not fully understood, but as the cumulative market cap grows, we will expect the fiat currencies to be on notice. In fact, if the total market cap starts to gain traction near the $1 Trillion mark, this will start to upend traditional fiat investment spaces and will most certainly wreak havoc on the fractional reserve banking system. Hell, if the central banks won’t expose the real ponzi (fractional reserve banking) rest assure the Blockchain and Crypto Currencies certainly will.
Microsoft was out this week talking up blockchain, as Ankur Patel of MSFTs ID division said, “Some public blockchains (bitcoin, ethereum, litecoin, to name a select few) provide a solid foundation for rooting DIDs, recording DPKI operations, and anchoring attestations." He went on further to say that they will continue to work on scaling and technical barriers and is looking toward adding support for decentralized identities for their authenticator apps.
AP reported this week that Icelandic lawmakers are looking to impose a Bitcoin mining tax on mining companies. -It’s only a matter of time before everyone wants a piece of the action, right?
Reuters reporting that the ECB’s Super Mario Draghi said this week in a response to questions regarding the ECB’s role in banning Bitcoin or regulating the space, Draghi said. “I have to say it’s not the ECB’s responsibility to do that.” -can only figure the pressure will mount as time goes on
The Lighting Network is gaining wider traction, originally designed for Bitcoin, now its reported that the others are getting into the space. Litecoin is advancing and the others are following suit. Stellar seems to provide the security basis for this, but we aren’t quite sure where Stellar fits into all this as the lightning network grows and two-way payment channels grow. We will have to keep an eye on these developments.
Fidelity Charitable the charity arm of Fidelity Investments reported that $69 million in crypto currency donations were received through their Fidelity Charitable Platform last year alone. Considering the ability to limit capital gains taxes through these charitable gifts, we will expect this arena to gain considerable traction going forward.
Moving over to the technical side of things, Bitcoin has run from $5900 to near trend line resistance at $11,700. We feel that trade above $11270 is constructive for upside momentum and that will define our bull/bear case for now. We should expect some sideways continuation here as we run into resistance, but we must note that new addresses continue at the 2 million per week rate and thus adoption continues unabated. So as much as we think Bitcoin should pause and breathe, we will continue to like upside probes as long as BTC trades above $11270 as shown in the chart of Bitcoin here: charts courtesy of Barchart
Ethereum is setting up a nice wedge formation. We aren’t sure of direction but momentum should build depending on which way the market forces push it here:
Litecoin has broken out to the upside, on all the bullish news this past week and continues to target $267:
Digging further into the data you can see from the following chart that new Bitcoin address continue at the 2 million per week rate:
Here is a look at the top 3 wallets which show the largest holder unch on the week with the next 2 in line shedding 12k and 1.6k BTC respectively:
Our CryptoCorner Index had a nice healthy jump this week +$372.21 to $3294.90 up 12.7% this week:
In conclusion we hope you enjoyed this week’s letter and we will continue to provide you with the best coverage that we can. We will continue to monitor the crypto market space for any info, data, analysis we think is relevant to keep you as firmly entrenched in the space as possible. We continue to be #HODLERS #BULLS in the space and look for the continued advancement on all fronts, both negative and positive of course. Like any new innovation, volatility comes with the territory but if we can collectively work together we can easily navigate the space so that we are all absolutely and correctly informed. Till next time Cheers!
DISCLAIMER: For Educational purposes only. This is not a solicitation to buy or sell commodity futures or options on neither commodity futures nor an endorsement for the purchase and sale of ICOs or Cryptocurrency and should not be construed as such. The risk of trading securities, futures and options can be substantial and is not for everyone. Such investments may not be appropriate for the recipient. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. Nothing contained in this message may be construed as an express or an implied promise, guarantee or implication by, of, or from the author Mike Agne of Agne Asset Management LLC (AAM) and owner of www.econemotions.com and The CryptoCorner Newsletter, that you will profit or that losses can or will be limited in any manner whatsoever. The CryptoCorner logo and name is the sole right and property of (AAM). Past performance is not necessarily indicative of future results. Although care has been taken to assure the accuracy, completeness and reliability of the information contained herein, (AAM) makes no warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, reliability or usefulness of any information, product, service or process disclosed. DO NOT COPY OR FORWARD INTELLECTUAL PROPERTY WITHOUT PRIOR WRITTEN CONSENT AND OR APPROVAL.