CryptoAM: Crypto Insurance, Speedy Payments, and a Stellar Stablecoin

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Good morning everyone, hope you didn’t miss us too much over the weekend. Today is the 2 month anniversary of CryptoAM and I’ve so thankful to all you now (now 300 strong) readers who make this newsletter possible! If you’ve enjoyed CryptoAM, let me know! And if you hate it, why’d you open this email?

3 things you need to know:

One: Crypto insurance goes mainstream. One year ago, there were no significant companies offering coverage for cryptocurrencies. Fast forward to today…and big names like AIG, Allianz and XL have jumped into the mix. The reason? So. much. demand.

  • All kinds of demand: Apparently quite a few institutions, big name investors and general market participants desperately want to insure their precious crypto. It sounds crazy to insure large holdings of cryptocurrencies due to the risks involved and opportunity for fraud (Whoops — I “accidentally” left out my private key and it got “hacked”), but people are seemingly willing to pay the sky-high premiums attached and the insurance companies are beginning to play ball.

  • Insurance quote: “Insurance for cryptocurrency storage will be a big opportunity,” said Christian Weishuber, a spokesman for Allianz, which began offering individual coverage for digital-coin theft in the past year and is one of the few insurers that agreed to talk about the issue. “Digital assets are becoming more relevant, important and prevalent on the real economy and we are exploring product and coverage options in this area.”

  • Read more…

Two: Mastercard lands a patent for speeding up cryptocurrency payments. One of the main pain points of cryptocurrency is the speed of transaction. Transaction times for traditional payment methods outstrip both Bitcoin and Ethereum by a large margin. A lot of the current work going into blockchain technology surrounds the question of scaling, which has proven to be difficult as blockchains inherently trade efficiency for decentralization and security.

  • Status Quo: As a maintainer of the traditional payment network, Mastercard has been researching blockchain to ensure that they stay ahead of innovations that might disrupt their core business model. This particular patent is interesting because it focuses on both improving the speed of transactions and linking existing cryptocurrencies to the existing fiat banking system.

  • One thing to note: All the major credit card companies are looking for ways to stave off disruption from blockchain technology. One avenue that some (including AmEx and Mastercard) are pursuing seems to be snapping up blockchain patents that will allow for easy integration of cryptocurrencies into the traditional system. If they make it easy to buy, sell and transact bitcoin/crypto in a centralized way through trusted names, then adoption will accelerate. It does bring about an inconsistency… if the Bitcoin system is decentralized but most people access it through a centralized service…is it really decentralized?

  • Read more…

Three: Stellar mints (another) partnership with IBM. IBM has been working with Stellar for some time now, and uses their network for a variety of different blockchain projects, mostly in the remittance industry. This time they are joining forces to build out a 1-1 USD backed stable coin, and will issue it on top of the Stellar network. This is big news for Stellar, as it’s clear that IBM is further solidifying their relationship and have had a good experience with the network so far.

  • Keep in mind: Stellar is one of the assets that Coinbase is considering for it’s platform, along with Cardano, Basic Attention Token, Zcash and 0x. Stellar signing big name partnerships during the decision making process will likely boost their position and make a listing more likely. In general, watch out for announcements from those 5 currencies.

  • Read more…

Also in the news:

What I’m reading today:

Slow Money vs Fast Money in Crypto 

How should you invest in cryptocurrencies? Should you take a long term approach? A short term approach? 

Most people (including myself) view the crypto-markets a combination of silicon valley style VC investing and traditional stock market investing. You can pick a number of ways to get invest in the markets, whether you actively trade liquid cryptocurrencies, invest in company equity, speculate on tokens, etc... 

In this piece, Mark Maples postulates that you can take two main approaches. Either you’re a "fast money" investor (short term) or a “slow money” investor (long term). Mike argues that the slow money approach in cryptocurrency is the one that will pay off the most long term, and its the approach that will work best for the majority of market participants. 

This philosophy holds better for those people who cannot dedicate themselves full time to trading cryptocurrencies. A year ago, the casual investor could beat the market by doing due diligence and paying close attention to the markets. It’s becoming more difficult (but still doable) as more sophisticated players come into the market. Unless you’re willing to dedicate at least 10hrs a week to trading, it’s probably best to just buy and hold what you’ve researched.

Around the corner:

Tell us what else to add!

Market Outlook:

Quick Take

I think BTC is a fellow CryptoAM reader, because it followed our predictions spot on. From the 7.5k level yesterday, we had a nice retracement down to 7.2k, and then promptly worked our way back up.

We saw a beautiful edge-to-edge (e2e) play out on the Ichimoku cloud. This means that the price closed inside the red “cloud” and made it’s way to the other side. When a strong daily candle enters and closes the cloud, it’s likely to completely the e2e.

We’re now trading around the significant 7.7k level, and I’m watching like a hawk. We unfortunately rejected the 7.8k level once, but we are still holding strong around 7.7k, which tells me we are likely to retest and break above soon.

If we reject 7.8k once again and break below 7.65k on the rejection I will be closing my longs. A daily close above 7.82k and it is likely we will take a run at 8.5k, which is next significant resistance level.

Alts: I am not touching any alts as they will get destroyed with large BTC movement. After BTC breaches 8k I will consider picking up some alts again. The exception here is that I’m accumulating what I call the “Coinbase alts” (ZRX, XLM, ADA, BAT) as I believe they are underpriced and at a good discount. I am not touching ZEC.

Daily Chart

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