CryptoAM: EOS Fact or Fud, Stellar Millionaires, and Twitter Scams.

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Good afternoon bitlets. We’re bringing you a nice edition of CryptoPM today. School is starting to get out for the summer which means high schoolers with summer jobs will finally start to invest some money in the market, guaranteeing a bullish trend for the rest of time. Eternal September has come.

3 things you need to know:

One: Only two of the top ten cryptocurrency exchanges from 2016 remain in the top ten today. Only Huobi and Kraken remain from the top ten cryptocurrency exchanges in August 2016. These changes reflect China’s crackdown on trading/ICOs, and favor exchanges that have been able to add many cryptocurrencies without declines in service.

  • Topping the list in 2016: Okcoin (currently #188), Btctrade (currently #54), and Huobi (currently #4).

  • Topping the list today: Bitmex, Okex, and Binance.

  • Predictions for 2019: A year from now I expect to see GDAX rising higher, Robinhood to crack the top 5, and Poloniex to regain it’s place in the top 10.

  • FOMO: Exactly two years ago, BTC was $522, Ethereum was $12, and Stellar was 1/6 of one cent! (If you put $10,000 into Stellar then, you would have $1.87 million today.)

  • Read more…

Two: EOS, Fact or Fud? One thing everyone can seem to agree on, EOS is fetch. People can’t stop talking about it, whether it’s blind praise or a vicious attack. A series of tweets claiming that a critical security vulnerability was found in EOS was widely circulated and picked up by a number of news sites. According to EOS lead developer Dan Larimer, the vulnerability had been patched before the tweets were even sent out, and the severity was blown out of proportion.

  • Overvalued? With an ICO rivaling the largest IPOs of 2018, it is not at all surprising that EOS has received so much attention. Whether it will live up to the hype is yet to be seen. What is clear, EOS, like most other cryptocurrency projects out there, is being valued according to its claimed future capabilities, not its current capabilities. Apparently those future capabilities are currently worth $11 Billion.

  • Be careful: We can’t provide investment advice, but we can provide advice on how to invest. Scams are easy enough to spot, what’s harder is making sure you are receiving unbiased information to base your investing decisions off of. 99% of people don’t read white papers, 99% of people don’t look at the github, and 99% of people let the holdings of their portfolio affect their objective judgment of other projects. Do not look to reddit if you’re looking to be rich. Be the 1%.

  • Read more…

Three: Use protection.

It’s important to stay up to date on what scams are currently out there. Crypto is the wild west and someone is always trying to take your money. The Lone Ranger won’t be there to save you.

Be vigilant.

  • Use a hardware wallet.

  • Store as little as possible on exchanges.

  • Double and triple check that you are sending your funds to the correct address.

  • Bookmark exchanges, do not google them.

  • Use two-factor authorization whenever possible.

  • For the love of Satoshi, DO NOT send your money to anyone who claims they will return you more.

  • Here’s a funny list of Twitter crypto scams

What I’m reading today:

Security Tokens Round 2: Electric Boogaloo

In a continuation of yesterdays CryptoAM, this reading focuses on how securitizing traditional assets will affect things. The article is a 16 minute read, and a good one. For those who are busy, I’ve got the gist below.

There are eight major ways the article claims that asset securitization on the blockchain will affect things: 

  1. 24/7 Markets. Of course, this is already possible with current tech, but isn’t implemented because of some reasons listed here. Since the blockchain is a protocol that facilitates the storage and tracking of data, you’ll always be able transact using the blockchain making it impossible to limit market hours. For those traders who like having lives, you can say goodbye to that. 

  2. Fractional Ownership: As mentioned yesterday, individuals will gain access to investments they otherwise would not be able to invest in. Currently, the only way for the average investor to invest in NYC real estate is to buy into REITs, which bundle assets of varying quality. To be able to trade and invest in specific buildings forces the market to become more price efficient, and allows for a greater selection of assets to invest in. 

  3. Rapid Settlement: When you conduct a stock transaction today, two things must happen. The execution of the trade and the settlement of the trade. In todays system, trade execution is very fast. Trade settlement however, is very slow. Blockchain technology introduces the concept of efficient settlement, as there is no “shoring up” of disparate ledgers owned by different companies. 

  4. Cost Reduction: Advisory services around securities issuance are costly, and that’s not going to change in the near term. Post-issuance however, there are a lot of administrative costs around ownership reconciliation. The article gives an example the Dole Foods fiasco, where there was a miscount of shareholders that led to a large headache for compliance. 

  5. Liquidity and Market Depth:  Most private assets are relatively illiquid, which means the ownership interests are costly to trade. Tokenizing private assets allow for greater liquidity and less costly trading. 

  6. Automated Compliance: Security tokens will be programmable, meaning that compliance can be automated. In fact, because of the frictionless compliance, it is not unbelievable that the SEC will actually mandate tokenization. The precedent would be the SEC mandating online compliance reports through the EDGAR system in 1996. 

  7. Asset Interoperability: Current centralized solutions for financial value transfer do not talk to each other. You can’t send PayPal to venmo, venmo to zelle, etc. Interoperability within the Ethereum protocol is facilitated by the ERC-20 token standards. It makes distributions easy.

Big picture: Asset tokenization may bring massive change to our financial system, but these things generally take time. There are other sides to this argument as well. Tokenized securities will not change everything.

Hot take: Much of this is unlikely to happen within the next 5 years, but over the next decade we will see huge transformation. As Bill Gates says, you tend to overestimate what can be accomplished in one year, and underestimate what can happen in 10. 

Around the corner:

List of upcoming crypto events/releases.

  • IOTA’s Qubic will be revealed on June 3rd. Vikram, our Chief Information Officer, feels this will likely be one the largest announcements in crypto this year.

  • The EOS mainnet will launch on June 3rd

Disclosure: We (Ledger Capital) have a position in IOTA.

Market Outlook:

Technicals: A nice rebound off the 7k level indicated a third higher low on descending volume. Translation: this relatively bullish.

Unlikely we are going on a run soon but a 1D candle closing above 7.8k could indicate the beginning of a 10k retest. 1D close below 6.6k and we’re headed for chaos, and likely going to see <6k.

Market Sentiment:

A very unscientific poll I ran on twitter has most people believing price will be bounded between 7.2 and 7.8k

Avi Felman@AviFelman

On June 1st BTC will be:

May 29, 2018
Follow me for spicy memes and occasionally thoughtful tweets.

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