CryptoAM: Litecoin Buys (part of) a Bank, GPU Slump, and Illegal Chinese Gambling

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Good morning my friends! Another red day, red like the sun roasting most of the continental United States, hot like the contents of this newsletter. Hope you brought some sunscreen.

3 things you need to know:

One: Litecoin price pops above $80 on bank acquisition news. Okay, so Litecoin didn’t actually buy a bank. What happened was the Litecoin foundation acquired a 9.9 percent stake in Germany's WEG Bank through TokenPay. They did so after announcing a new partnership with crypto-to-fiat payments provider, intended to bring cryptocurrency payment solutions to customers and working with TokenPay on its various blockchain projects.

  • One important thing: The partnership was stuck with consumer friendly crypto-payments in mind. It’s evident the cryptocurrency space is moving to the next step of development — usability. Like the internet in the 90’s, most blockchain tech is hard to interact with. Any step taken to encourage consumer interaction is a good sign!

  • Second important thing: This is adoption coming from a self described conservative institution. Matthias von Hauff, the CEO of WEG bank said the deal was not initially expected from a "very conservative" institution such as itself, and only came about after thought about the future place of cryptocurrencies.

  • Money Quote: "We have thoroughly and diligently examined the prospects of a common future, and we became convinced that the future of banking will make adoption of such modern payment methods inevitable."

  • Read more…

Two: Downturn in crypto markets leads to downturn in GPU prices. A bundle of AMD RX 580s has fallen from $3600 to $2500. The number of direct GPU shipments to miners has fallen 55.5%. This downturn has been expected by AMD and NVIDIA, whose profits, although bolstered by GPU mining, were ultimately unsustainable.

  • My take: If you’re interested in mining crypto, there’s no better time to get in than in a downtrend. Hardware prices are lower, mining difficulty is lower, and you can start accumulating coins that you believe might pump during the next bull run. Sure, short term, it might not be worth it electricity wise, but you have to think a little bit more long term than that (I was mining LTC at $4, it sure paid off nicely).

  • Read more…

Three: Chinese Gambling Ring Shutdown. A Chinese cryptocurrency gambling site had processed over $1.5 Billion worth of bets in the 8 months since its launch. A massive multi-authority operation saw the arrest of hundreds of individuals connected with the site. In China, gambling is illegal. Not only was the site illegal, but new users were attracted through a pyramid scheme-like commission structure, and the odds on the site were rigged.

  • Questions: I am curious as to how projects like Augur will fare in countries where gambling is illegal. Can the great firewall of China successfully prevent people from accessing decentralized services? What will China do if projects like Orchid Protocol are successful?

  • Answers: China will likely find a way to block access to Augurs network, and so will other countries where gambling is illegal. The question is, how effective will they be? These next months will be a true test of decentralization, as it’s obvious that Augur is facilitating illegal gambling in many jurisdictions. Governments have many tricks up their sleeves, and may end up going after Joey Krug or other influential players in an attempt to shut down the platform.

  • Read more…

Also in the news:

What I’m reading today:

A brief history of Stablecoins (Part 1)

For those of you who don’t know, Bitmex is the land of trading degenerates. They allow up to 100x leverage when trading bitcoin, meaning that only $100 in capital allows you to take positions sizes up to $10,000. A 1% change in bitcoin can either double your money or empty your account.

That kind of leverage is essentiality roulette, and I wouldn’t suggest it. However, it’s a fantastic trading platform for those who like (responsibly) speculating on the price movements of Bitcoin, and offers the lowest fees in the game.

What a lot of people don’t know is that they also put out fantastic research. Their latest piece is about the history of stablecoins, which as you know, are the holy grail of cryptocurrency. There have been many attempts to create a stable coin, none without controversy. Some people even claim it isn’t possible.

Anyways, if you feel your knowledge in the stablecoin game is lacking, read on. If you have any questions about the read, hit me up on Telegram!

Around the corner:

Market Outlook:

Quick Take

Ouch, we tested 6.3k like expected, and broke through. I hope when you saw 6.29k on your screen you remembered yesterdays CryptoAM and made the right decision…

We also see a bearish move of the 9D EMA crossing over the 20D EMA. All of this points to 6k as the likely next target, where support is reached. I’ll have some buys at 6.05k and with a stop loss around 5.95k.

If we break 6k, I’m looking for a 5.5k price target, as it will have invalidated the “reversal” from the 5.7k level and proven that sell pressure is still greater than buy pressure at those key levels.

Of course, this is not financial advice and it’s totally possible I’m wrong :)

Daily Chart:

The one hope of redemption is a daily close today or tomorrow around 6.4k, which would have the chart building higher lows.

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