CryptoAM: Whales, CoinBene (who?), and $300M

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We swung and missed at 6.3k, sorry lads. Looking to rebound quickly because there’s no support between 6.2k and 6k. If you looking to find something to occupy yourself with other than the markets, give us feedback!

3 things you need to know:

One: Andreessen Horowitz launches a crypto fund. The fund is called a16z and will be a $300 million venture fund that invests in crypto protocols and companies. The fund is long term focused and plans to hold investments for 10+ years. a16z will be led by the first female GP at Andreessen Horowitz, Katie Haun.

  • Legit: This is one of the largest crypto venture funds to date which only servers to further legitimize crypto.

  • My thoughts: A ten year time horizon is a bit long as far as crypto goes, if you ask me. I believe this space is moving too quickly to really know what the landscape will look like a decade on.

  • Read more…

Two: The FTC held a “crypto-scam” conference in Chicago yesterday. It’s filled with choice quotes, which I encourage you read. Now, here’s a crazy statistic. The FTC estimates that $532M has been lost to scams so far, with almost $3B expected by the end of 2018. That is an huge number, and shows how far cryptocurrency is from mass adoption. It’s difficult to get consumers to adopt a technology that they are personally liable for. Credit cards offer the buffer of bank protection, and the majority of fraud cost is eaten by the bans issuing cards. With crypto, you are your own bank meaning that you are the one eating that cost.

  • Something to stick to: "If you yourself are not capable of explaining to somebody what a token's supposed to do, you should not buy the token," said Van Valkenburgh. "If you can't tell the wheat from the chaff, or what is techno-gibberish or actual innovation, you should not participate."

  • Read more…

Three: New cryptocurrency exchange fee model boosts exchanges to top of rankings. Both CoinBene and Bit-Z have introduced a new fee model where users are compensated for trading fees in the equivalent value of the exchange’s native token. At a set interval, 3% of the remaining supply is burned. After a day of using this new model, around 85% of Bit-Zs token remain.

  • Sketchy: Both Bit-Z and CoinBene did over one billion in Ethereum volume alone, which is where the majority of their total trading volume came from. It would seem that large traders are simply churning trades through the system because they know they will get compensated 1:1 for the fees they incur. With the deflationary model this guarantees the the tokens will be more scarce and (hopefully) more valuable.

  • Read more…

Also in the news:

What I’m reading today:

The 3 Types of Cryptocurrency Traders That Are Kicking Your Ass 

  1. Insider Traders: With an asset class as sentiment driven as cryptocurrency, there is bound to be insider trading. Especially during a bull market, even a minor announcement can make a coin’s price skyrocket. Insider trading is illegal if the asset is classified as a security. I’m not a legal expert so don’t quote me on this, but that should mean you can trade Bitcoin and Ethereum on non-public information all day long without worry.

  2. Whales: They’re not that easy to spot but you know they are true kings of the market, just like their ocean dwelling counterparts. From stop-loss hunting to spoofing, they are an ever-present force to watch for.

  3. Pump & Dumpers: Need I explain more? Pump and dump groups thrive in crypto. Small market cap coins with low trading volumes are prime targets for manipulation. At least the ones that get dumped on are the ones that are stupid enough to join pump and dump groups in the first place.

Around the corner:

Tell us what we should add!

Market Outlook:

The bad: We are in a definite downtrend. We broke 6.2k, indicating we are likely to retest 6k. Bulls keep getting whacked. We need a daily close above 6.3k to signal any sort of reversal

The good: We aren’t below 6k (yet), downtrend has abated on MACD, and sell volume is slowing down.

I’m pretty bearish and think we will revisit 6k, but also not trading BTC/USD because it’s in an unclear area right now and while I think it’s likely I'm not fully convinced of that call.

For you traders who are itching to make moves, slow down. Not taking a position is sometimes the best position you can take, and is always a smart move in non-trending markets.

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