CryptoAM: A Coinbase Index, McAfee Report, and DLT Investment

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Good morning peeps. Not lookin’ so hot out there is it? As of writing this, we’re sitting at about a $260 billion market cap, which is where we were in late November. All of December’s gains have officially been wiped out. (Note: We’re going to be at Cryptolina this weekend, so we’re taking tomorrow & Friday off. Please let us know in the Telegram if you will be attending!)


3 things you need to know:

One: Coinbase Launches its Index Fund. Coinbase has opened up its index fund to investment from accredited investors. The minimum investment stands at a cool $250,000. The Coinbase Index Fund offers exposure to every asset listed on Coinbase, with each asset weighted according to its total market cap.

  • Why this is important: Institutional money being in crypto is simply a fact of life at this point. If you believe that means prices should go up, you’re dead wrong. Do you really think these big shot investors are going to be pumping the price up so you can dump on them? You’ve got it the wrong way round, buddy.

  • Hodl?: Index funds are seen as relatively safe bet when it comes to investing. But do you really want to buy an index fund of the largest market cap cryptos in a market where it seems that an different asset does 10x every week? It is of my humble, honest, opinion, that any half-decent actively managed crypto fund will vastly outperform any crypto index fund.

  • Read more…

Two: McAfee (The company not the man) highlights emerging cybersecurity risk associated with blockchain. McAfee has released their “blockchain threat report”. Notable threats include ransomware, where victim’s computers are encrypted and a payment in a cryptocurrency, typically Monero, is required to decrypt the user’s files, and “cryptojacking,” where malicious mining software is installed on victim’s computers to mine (usually Monero) unbeknownst to the victim.

  • Trends: Cryptojacking increased 1,189% from Q4 2017 to Q1 2018 while ransomware decreased. This may suggest that hackers are finding it easier to stay undetected and keep their profits when their victims are unaware that their device has been compromised.

  • Bleeding out: The largest source of lost funds comes from exchanges being hacked. Countless exchanges have been hacked and billions of dollars of customer funds have been lost. Do yourself a favor and don’t store more than 10% of your funds on exchange. It might be a pain in the a** to download a wallet and backup the keys, but it will save you a lot of anguish if your favorite exchange is ever hacked.

  • Read more…

Three: Financial services are pouring money into DLT. $1.7 Billion is being spent annually on distributed ledger technology. One in ten banks has spent in excess of $10 million on blockchain and the number of employees working on blockchain projects has doubled.

  • Appeal: When it comes down to it, the main advantage of companies using a distributed ledger is having a secure, immutable database of historical information. In the age of seemingly endless data breaches and hacks, that is a very valuable proposition.

  • Read more….


Also in the news:


What I’m reading today:

The Emergence of Cryptoeconomic Primitives

Do you ever find yourself wondering, “Why does x need a token anyway?” Good, you should understand what value tokens provide in each project you invest in.

Cryptoeconomics: the combination of cryptography and economics to create robust decentralized P2P networks. Cryptography is used to prove things that happened in the past, and economic incentives are used to encourage desired properties to hold into the future. Code and economics are intrinsically interlinked.”

“A Cryptoeconomic Primitive should be a self-sustaining system, and its intrinsic token must be a necessary element of that system. In other words, it shouldn’t require anything other than itself to function and the removal of the token would cause it to fail or work less effectively than the system with a token.”

Some common functions that tokens can provide in a P2P network include governance, financial inventive to keep networks secure, rewards for curation of information, efficient allocation of physical objects or infrastructure, maintaining the value of a stablecoin, etc. Protocols with solid cryptoeconomic primitives will likely be adopted and adapted by other projects. With a projects attempting to use tokenized economies for nearly everything now a days, including going to mars, it can be hard to determine which ones are hullabaloo, especially when some of these projects have multiple tokens all working together to create a complex ecosystem. Only time will tell which of these protocols will prevail, but it is worth doing your due diligence to understand to the best of your ability the legitimate use cases of tokens.


Around the corner:


Market Outlook:

We are incredibly fearful today, continuing our streak. In my mind, this a fantastic buying opportunity for the “set it and forget it” crowed. In the long run, this is a very attractive price due to massive fear in the market.

Here’s a reminder of what these criteria mean

I hope you guys have been listening to our calls here.

We’ve been pretty accurate so far judging support & resistance levels. We bounced off 6.6k yesterday and got rejected at the 6.7k level. We then broke the 6.6k level, where I hope you guys had your stop losses placed. (We’ve been going on and on about that level).

Then, something unexpected happened. Instead of crashing straight down to 6k, we hovered around support at 6.4k. It took almost half a day for the breakdown to 6.2k. When we finally broke down to 6.2k, there was a strong bounce back to 6.3k.

Buyers were found!

1 week horizon I’m still bearish. I’m waiting to see what happens at the 6.2k level. if that breaks down, then we are almost 100% going to 5.9k and below. There is likely to be a bounce again, retesting 6.6k. I have a long @ 6.3k with a stop loss set at 6.2k. Will close the long quickly if we see a failed retest of 6.6k. If we break through 6.6k, I’ll let it run.


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CryptoAM is a Ledger Capital project