Bitmain's IPO, The Coinbase Bundle, and 1Broker's Bad Day

Friday, September 28th

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3 things you need to know:

One: Bitmain drops a massive prospectus in preparation for their ICO

Bitmain dropped a 432-page disclosure report yesterday in preparation for it’s IPO on the Hong Kong Stock Exchange. After months of preparations and delays, Bitmain is finally ready to start the process of IPOing on the Hong Kong Stock Exchange.

Some key points:

  • In the first half of 2018, Bitmain’s revenue was $2.845 billion, with a net profit of $1.123 billion.

  • 95% of revenue comes from the sale of $2.56 million in mining hardware.

  • They’ve raised more than half a billion dollars in 2018.

  • They’re by far the biggest player in the cryptocurrency mining space.

BitMEX research published a in depth read, and I highly suggest checking it out if the financials of a cryptocurrency mining company intrigue you as much as they intrigue me.

Two: Coinbase announces a new product: “Coinbase Bundle”

Coinbase is rolling out a new product to make investing in crypto simple. Following their announcement earlier this week of new asset additions, they’re making it easy to buy a basket of those assets. Retail investors will be able to buy a market cap weighted index of all the cryptocurrencies listed on Coinbase with the click of a button.

  • Coinbase Bundle is the retail friendly version of Coinbase Index. A few months ago, Coinbase launched Coinbase index, which is almost the exact same product, but targeted at institutional investors. For Coinbase index, the minimum buy in was $250k. For Coinbase Bundle? Just $25.

  • Coinbase is entrenching themselves in all parts of cryptocurrency. Generally, there is a split in product focus between retail and institutional. Most cryptocurrency products will choose one segment and chase it relentlessly. It’s clear that Coinbase is attempting to play both sides of the market here…and they’re doing a great job.

  • Go deeper: Check out the Coinbase Bundle site

Three: 1Broker is shut down by the SEC for violating securities laws.

Yesterday, the SEC seized the 1Broker website and charged its CEO with violating U.S securities law because the exchange was offering illegal “security-based swaps funded with bitcoins”.

  • The statement by the SEC alleges that the Marshall Islands based company, “failed to transact its security-based swaps on a registered national exchange, and failed to properly register as a security-based swaps dealer.”

  • Being based outside the U.S did not protect 1Broker, as soliciting U.S investors requires compliance with SEC guidelines. In the words of Shamoil T. Shipchandler, Director of the SEC’s Fort Worth Regional Office:

    “International companies that transact with U.S. investors cannot circumvent compliance with the federal securities laws by using cryptocurrency.”

Be smart: This hammers home the dangers of keeping crypto on a unregistered and non-compliant exchange. There are currently hundreds of angry tweets by customers unable to access funds now that the SEC has seized the website. It’s likely now that these unfortunate souls will have to waits months or longer to get access to their funds.

Also in the news:

Market Outlook:

Quick Take

Direction: Bitcoin volatility is at yearly lows, and has been on a consistent decline for the past few months. On Balance Volume continues to grow, and buying volume seems to be picking up. We turned the 6580 resistance level into support, and have consistently made higher lows. We are technically still in a no trade zone, but are showing signs of bullishness.

Key Support:  6600, 6580

Key Resistance: 6700, 6800

Actions: I’m flat BTC, but will add to a long position on a break of 6700 with volume. I will also be shorting support if we break down to the 6400.

Fear & Greed

We are almost in greedy territory according to F&G, which is a warning sign that there will likely be consolidation or a drop in the coming days.

Here’s a reminder of what these criteria mean

CoinSavage: Truth in Crypto

There’s a big problem with crypto trading. Too many fraudulent actors. People actually take trade signals from random people in twitter— with no way to vet anything.

CoinSavage is the platform to change all of that. They have built a fantastic (and free) platform where all portfolios, trades, and ideas are open sourced and timestamped. No more hindsight TA, now you can actually see for yourself if people are performing, and prove to your audience you know what you’re talking about.

Around the corner:

What I’m watching today:

This is normally a more serious section, where we try to force you to learn something.

But it’s Friday, and it’s been a long week. So here’s something fun :)

If you’re still itching for a good weekend reading, let me suggest Crypto: Traders’ Paradise, Investors’ Hell by Alex Kruger. It’s a great (and long) take on the state of the crypto markets, and why “investing” in crypto may be the wrong move.

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