CryptoAM: King Trex, Privacy Coin Ban, and Rich People

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Hey hey heyyyyyy. Wassuppp wassup wassup!!!!!!! We’re mostly in the green today bitties. Sorry XMR.

Check out that pre-Qubic pump ;)

3 things you need to know:

One: Bittrex is rolling out USD- BTC pairings. Once the biggest crypto exchange in the world, Bittrex is now at the bottom of the top 10. In an attempt to regain former glory, they are rolling out fiat buys.

  • This is big news: On Thursday, Bittrex will become the first major American exchange to have a two step process for buying complete shitcoins. Deposit your USD, buy BTC, and then any coin on the Bittrex exchange is yours. One thing to note is that it will only be for institutional investors at first. The average bear will have to wait a bit longer for the service.

  • King Trex: For a long time, Coinbase was the only major exchange to allow direct buying of cryptocurrency with fiat. They did so by keeping strict adherence to regulation and having minimal coins on their exchange. If Bittrex can get it’s UI/UX experience down, it will have a major advantage over the Coinbase because of the sheer amount of coins traded on its platform.

  • Be smart: Coins that are accessible generally trade at a premium. It’s one of the reasons Binance listings pump coin value — more people are able to buy it. Lesser known coins (that are good products) on Bittrex are likely trading at a discount right now, and have room to appreciate due to USD pairings giving retail investors easy access.

  • Read the announcement…

Two: Japan bans all privacy coins. So it begins. The Japanese Financial Security Agency announced a ban on cryptocurrencies that provide a sufficient degree of anonymity to its end users. The ban will go into effect on June 18th.

  • Why this is significant: Japan will not be the only country to ban privacy coins. Privacy coins, although functionality wise are much simpler to understand than cryptos such as IOTA or VeChain, have just as much of a potential to impact the world. Privacy coins make it much easier to store large amounts of funds that you want to keep hidden from the public; for legal, or not so legal purposes. The current preferred method of hiding funds are through complicated networks of foreign banks and holding companies, or simply keeping it in cash.

  • Ban, Schman: In practice, all a ban does is give a government legal precedent to prosecute if they find out you are using privacy coins. Unlike a centralized service, which can easily be raided by a government or blocked by ISPs, privacy coins will exist and be usable as long as there are people to use them. Sure, most exchanges are centralized and under some government’s jurisdiction, but two years from now I fully expect decentralized exchanges to have a much larger and legitimate presence than they currently have.

  • Rainy day: Don’t be surprised if in ten years privacy coins become the new $100,000 of cash hidden in grandma’s wall or $1,000,000 in gold buried in crazy Joe’s backyard.

  • Read more…

Three: 35% of high net worth individuals investing in crypto assets. A study published by DeVere has determined that 35% of high net worth individuals from across the globe either already have or plan to be invested in cryptocurrencies by the end of 2018. The survey was conducted among over 600 deVere clients.

  • Impact: New money coming into crypto is always a bullish signal. As long as people keep buying other people’s bags, we will se growth.

  • What are HNWIs buying? DeVere’s very own crypto app supports the buying and selling of Bitcoin, Bitcoin Cash, Ethereum, EOS, Litecoin, Ripple, DASH, Monero, and Stellar Lumens. Now these institutional investors certainly aren’t making their massive buys through the app, but the app’s listings may be indicative of what crypto assets deVere’s clients have been interested in.

  • Read More…


What I’m reading today:

Let’s talk about 51% attacks.

There have been a number of 51% attacks on prominent blockchains in recent history

  • Bitcoin Gold: 1 attack, over $18 million stolen

  • Verge: 2 attacks in the last two months, over $1.7 million stolen

If you need a brief reminder of what a 51% attack is, it’s when a miner or unified group of miners gains over half of a network's hashing power in order to double spend their funds. Investopedia Link.

Two of these attacks have occurred in the last week. It seems that malicious actors are starting to catch onto the fact that attacking proof-of-work blockchains may not be so difficult after all. Previous estimates of the cost of executing a successful 51% attack were quite high, to the point where it wouldn’t make much economic sense if your goal was purely profit. However, those estimates did not take into account the fact that you can rent hash power, significantly reducing the cost of an attack. 

Redditor /u/xur17 created a website, crypto51, which keeps track of the cost per hour of a 51% attack for proof-of-work coins. An attack on Ethereum Classic is estimated to cost between $3000 and $10,000 per hour. For a coin with a $2 Billion market cap, this is completely unacceptable. Additionally, due to the fact that Ethereum Classic shares the same hashing algorithm as Ethereum, anyone who controls just 2.5% of the Ethereum hashing power, would control over 51% of the Ethereum Classic network if they switched over all of their miners. 

Takeaways

  • Proof-of-work coins are at extreme risk of 51% attacks until they secure large amounts of hashing power.

  • Proof-of-work coins with large amounts of hashing power are still at a high risk of losing it due to price fluctuations which often make another coin more profitable to mine and thus causing the network to lose significant hashing power.

  • When deciding which coins/tokens to invest in, make sure you understand the consensus mechanism used to secure the asset’s network. Do not dismiss a 51% attack as theoretical situation, because it is very much real and it will happen again. 

  • Verge is only down about 50% over the last month, which is very near what many coins have experienced during this most recent bear trend. This is further evidence to support that this market is highly sentiment driven, and the sentiment of many crypto investors is, “Eh, it’ll 10x in a year” (This is a bad mentality to have btw, you will get burnt). 


Around the corner:

List of upcoming crypto events/releases

Here’s a reminder that Bloomberg is always about 24hrs behind when it comes to crypto news:

Why yes, that is their front page article.

Market Outlook:

In an effort to understand human psychology and behavior in this market, we at Ledger Capital are excited to release the first effort at creating a comprehensive Fear/Greed Index rooted in traditional finance.

However, unlike other Fear/Greed indexes that have been calculated, we think that the nature of these markets requires two types of Fear/Greed indexes: one for longer term trends (i.e. using and updating daily) and one for shorter term trends (i.e. using and updating hourly).  We’ll be sharing the long term F/G index here in CryptoAM everyday.

Our creation of this index, and usage of it, is based on two assumptions:

  • Fear can be a sign that investors are overly worried, indicating a potential buying opportunity. (Red Zone)

  • Greed can be a sign that investors are overconfident, indicating a correction may be around the corner. (Green Zone)

If you want to learn more about the short-term index, feel free to reach out to us. For a comprehensive breakdown of the metrics, here’s our medium article.

Looks like the market is still slightly oversold. Look for support @7.2k and 7.8k. A strong break on high volume of either of those would indicate a sustained trend in that direction.


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For financial advice, do not email cryptoampm@gmail.com. We cannot give out financial advice. None of this is financial advice. Seriously. Don’t email us.