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Asset Allocation in a Hornet’s Nest

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The cryptocurrency markets have provided one of the only ways for people like you and I around the world to achieve financial freedom. Through ICOs, strategic investing, or dumb luck; for better or for worse there are opportunities every single day for you to drastically increase your net worth with a minimum upfront investment.

Now that we’ve gotten that out of the way, let’s talk about investing like adults in a market that was designed for children.

First, let’s discuss the industry. The blockchain industry has designed various superhighways on the internet that allow rapid transfer of almost any form of data. Currently, the industry is fixated on money transfer and settlement, with scaled data/content sharing slowly becoming a reality. The cars that travel on these super highways are cryptocurrencies. Each car is designed to travel the highway in a certain way that will benefit it’s user. Anonymity, speed, transparency; no matter what the driver is trying to do, there is a strong possibility there is a car designed for that person. For example, there is (somehow) a successful coin that focuses on dentist transaction processing in a minimal geography.

Next, the coins. There are currently thousands of investable coins across various marketplaces worldwide. Most of the coins that you see today, including those in the top 10 in market cap, are projects. Not businesses. They are in the infancy of their business, and have crowdfunded on a scale and format never seen before. This is where things get tricky. No matter who you talk to, no one will be able to tell if a non-functioning business will ever function. Each investment in a project is completely speculative based on analyzing their road map, white paper, and team background. The price of each coin fluctuates in a way that is incomprehensible. A very common story is a coin could just launch an amazing partnership with a business to use their blockchain road, and still be down 20-30% on the day. The key word here is: irrational.

So, finally, how to be rational in an irrational market. The answer to this question is why you watch YouTube videos like smoking crack, download telegram where for every price target you get 15 spam ads, and read wonderful pieces like this one. I will not disappoint, I will provide my opinion of how to navigate this market the same way all year. 2 rules. 1. Invest in businesses, not projects 2. Circulating Supply is more important than Twitter.

1. Invest in Businesses, not Projects

I will get heat for this one. The majority of money lost in cryptocurrency is money bet on projects that do not have a product or customers. The ICO market is a complete bloodbath. An example is Porn Coin – During the ICO, the CEO vanished with all of the encrypted currency he just received – whoduhthunkit! 2018 is the perfect storm year. You don’t need to be wasting time with porn coins when there are coins that already have working businesses that are trading on the same exchange.

What are the businesses to look for? Logical ones! If it doesn’t make sense to you, then why would it make sense to the hedge fund or institution that’s going to be looking at it 2 months from now. The only investments that I have are the ones that are A. Making money B. Targets for indexing or investment by American financial companies and institutions. Those two filters alone will get you down to a maximum of 10 coins. Of those 10 coins, probably 3 will be around in 3-5 years. Never, ever, invest in one or two things. If you just want one investment, buy Ethereum. Creating an index of different functioning businesses will limit the losses you can incur in a single day. The risk over weeks, months, and years cannot be mitigated. Cryptocurrency is new.

2. Circulating Supply is more important than Twitter

The cryptocurrency market is unregulated. That is probably the first thing I tell people when they ask me about blockchain. Anything can happen here, and everything does happen. You name the scam, it’s probably happened thousands, if not millions of times. Twitter, Telegram, and YouTube have caused more losses than gains. If you listened to the first rule, you know you have very few companies to invest in. Circulating Supply is what I look at after the business. I want the price to be VERY sensitive to new entrants, in which I am incurring the risk of the price being VERY sensitive when someone exits. If I am investing in a functioning business with very little quantity, I now have a coin that is used in a functioning blockchain that not many people have. Think of all the coins you know about, and the people who you know who have invested them. Are they using them? No! of course not! These are like “GoFundMe” tokens that have purely intrinsic value. So people HOLD them. If something has 4,000,000 supply, and there are early adopters holding large percentages, then the market is now limited in supply. My bet is that prices will have to go up in order to entice people like me to take their coins out of cold storage. This is a bet. Not a fact.

Right now, that strategy has yielded me a lot. In 3/6 months, I believe that strategy will reward me much more. Don’t invest in new technology. Use your computer skills to preemptively invest in things you know deep pockets will invest in. With a low supply, you only need a couple more big boys to come in for you to reap the benefits. My heart starts pumping with a supply of anything larger than 150mm. Now, you’re saying, “But what about XYZ coin! It holds the door open for you and gives you chocolate!” I am 100% sure the coins I have invested in are not the best tech in the market. In fact, I’m probably sure of it. But I am not crowdfunding a coin that gives me no equity in their business simply for the fact it can “change the world”. Don’t chase technology. Chase money.

Conclusion

Don’t make cryptocurrency complicated. This is a highly speculative investment category that is just taking shape. Using the two rules above, you can create an index of coins that will give you the highest probability of a return. One thing pundits will say is that the market cap in cryptocurrency is going to rise. That has an inherently higher possibility than any cryptocurrency price prediction. Creating an index of already profit reaping, low supply currencies will mitigate your risk, while amplifying your returns.

This is my strategy, and I encourage you to look into it. None of what I say is financial advice. My purpose of this article is to stimulate thought, and thought only.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 27 rated postsMythological God of Lightning. Cryptocurrency/Blockchain writer, evangelist, and friend. May the odds be ever in our favor.




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4 Comments

4 Comments

  1. andrewmayne1

    January 13, 2018 at 10:14 am

    Thanks for the article. Two questions –
    1) When you say business rather than project, are you saying that it has to be able to make money beyond the premine? Ie be sustainable? Or that it has a working product which allows use of the token

    2) How do you determine the circulating supply? Presumably that’s the amount of the crypto that’s on the market ie not premined to fund the the project. Bitcoin has a relatively low supply of coins, but I would I be right in assuming that you’re talking about low market cap coins?

    Thanks

    • Raiden

      January 14, 2018 at 4:49 pm

      Hi Andrew

      1) I want businesses with customers. The ICOs are crowdfunding, and somehow we have decided that the crowdfunding tokens we bought have value and should be traded. I think what you said was correct “Working product which allows use of the token” I believe it is use OF and use BEYOND the token (DAPPS/Smart Contracts are just the beginning). This all goes back to the intended target market of the token. who do they want to adopt their blockchain/currency and why would the target market do it? Are they already doing it? If they aren’t already making money from volume/customers, there are some that are. I choose to go with the safer bets in general.

      2) coinmarketcap.com total circulating supply. You are completely correct Andrew, there is absolutely no way to determine what is actually on the market at a given time. But, it is extreme peace of mind that when the total supply can reach only reach in the 10s or low hundreds of millions. some coins incentivize by deleting one coin per transaction, etc. This is a strategy some employ, obviously not for everyone.

      Not recommending XMR or any other currency. Talk soon! -R.

  2. efipm

    January 14, 2018 at 8:20 am

    Great article. It is the first one here on Hacked that “teaches fishing rather than offering a free meal”!
    What is your social media presence RAIDEN? Love to follow you everywhere.

    Give us an example of how we could guessestimate the Circulating supply.
    Maybe using an example like CIVIC coin and or IOTA (App layer and protocol layer).

    Thanks alot

  3. Raiden

    January 14, 2018 at 4:55 pm

    Gonna start up a twitter soon, will keep you posted.

    My strategy is bare bones simple. I am not trying to figure out how much is there at what time. I just see how much can be made in total. I think CVC is 1,000,000,000 if I am not mistaken. I think current circulation is 343,000,000ish. Each coin/token is different. This one has split it into thirds, each piece can be used (in their bi-laws) for a distinct purpose towards their business.

    hope this helps talk soon -R.

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EOS Price Forecast: EOS/USD Heading for Another 300% Move?

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  • EOS/USD price action via the 4-hour chart view has formed a bullish flag pattern.
  • The price is moving around levels seen back end of March to early April, before a bull run of over 300%.

The past six sessions for EOS/USD have been erratic to say the least. It has been subject to a high amount of volatility, swinging aggressively in both directions. There has been a lack of commitment from either the bear or bull camps of late. As the market continues to trade with such behavior, it appears to be trying to find its feet, ahead of a potential chunky firm trend.

EOS DApp Hacked Again

An EOS based gambling DApp, EOSBet has been hacked, with $338,000 being reported as stolen. This isn’t the first time; just back in September, hackers managed to get away with a reported 40,000 worth of EOS, which at the time had a value of $200,000. It has been said that they were able to exploit their smart contracts, having found security vulnerabilities.

Technical Review – 4-hour Chart View

EOS/USD 4-hour chart

EOS/USD price action has formed a bullish flag pattern, which began taking shape on 15th October, after the aggressive price behavior stabilized. The bulls at the time ran the price well up into $6 territory. Consequently, it then met the breached ascending trend line, failing to move back above this area. This followed the sharp breakthrough to the downside, which occurred on 11th October. As a result, a drop of over 15% was seen, forcing EOS/USD to retreat in a demand area, within the $5.0000 level proximity.

Looking to the upside, small near-term resistance is seen at around $5.6100, which is the upper trend line of the mentioned bull flag pattern. A breakout will likely open the doors to a retest of the broken ascending trend line, tracking around $6.1100. Support can be eyed at $5.4600, which marks the lower trend line of the flag. Furthermore, should this fail to hold, EOS/USD could likely fall back down to the serving demand area, within the lower $5.0000 territory.

April 2018 Bull Run

EOS/USD April bull run

In April of this year EOS/USD entered a chunky bull run, gaining over 300%. From the back end of March until 11th April, the price had been stuck within consolidation mode. Resulting in the price trading within a tight range, at levels of where the price is currently seen today.

Something quite astonishing started to unfold. Between the period of 11th April to the 29th April, a bull run of around 290% was seen. Over this time frame EOS/USD went from $5.9500 up to a high of around $23.0811. The price is currently demonstrating a similar behavior to that of what was seen during the mentioned period. It is interesting to note that the price did have historical levels to break through, as it had already run higher during the period of December 2017 and came back down. Finally, this is not to say EOS/USD will observe the same bull run. However, it is an interesting observation to be aware of.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 33 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Stellar Price Analysis: XLM/USD Has the Potential for a Short-term Rally, Though Bearish Set-up Eyed

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  • Stellar’s XLM potentially has further room for upside, within the short-term view.
  • Danger still looms for XLM/USD, as the daily chart suggests of a bearish technical pattern set up.

Steller’s native token XLM, has failed to commit to any sustained trend. This has been the case since the start of July. Bull rallies that have been witnessed were quickly sold by the market bears. This led the market to trade within a generally long running form of consolidation. Price action is narrowing, given the unsustainable short-term trend runs that have been witnessed. It comes as somewhat of a surprise, as the Stellar foundation have certainly been busy.

Stellar Developments

It was reported recently, blockchain security company BitGo, announced their support of Stellar Lumens (XLM). Being added to the BitGo’s list, Stellar now receives custody solutions. Their users will be able to generate wallets for Stellar Lumens. This is said to be starting at some point within the next couple of weeks. Elsewhere, as previously reported, the Stellar foundation at the start of this month released their heavily anticipated decentralized exchange, StellarX.

4-hour Chart Technical Review

XLM/USD 4-hour chart

Looking via the 4-hour chart, price action has formed a bullish pennant pattern. This comes after the surge higher between September 20-23. XLM/USD has since entered consolidation mode, trading within a range-bound nature. The price is coming very much towards the end of this technical pattern seen, raising the case for an imminent breakout. Near-term support can be observed around $0.2350 area. This is the lower tracking trend line of the mentioned pennant. A failure of the support could very likely see a fast fall to $0.2050. XLM/USD was last trading in this territory between September 12 – 20. The mentioned period was during a time of consolidation, prior to the mentioned breakout higher.

Resistance is seen just ahead of the current price. The above descending trend line of the pennant pattern is tracking around $0.2460-70. Enough bullish momentum to see the breach would likely force the price running to $0.2650. This is seen as an area of resistance on the 4-hour chart view. Looking further to the north, eyes would be on the supply heading into the $0.3000 mark.

Daily Chart Technical Review

XLM/USD daily chart

Taking into consideration the 4-hour chart view, there is still room for another squeeze higher. Despite this, danger appears to still be looming for XLM/USD. Risks on the daily chart point to the downside. The view of this is that a longer-term bearish pennant pattern is containing the price. XLM/USD support on the daily chart can be seen just sub of $0.2000. A long-running supporting trend line can be seen. The price having required assistance on June 29 and several occasions from September 8 – 12. To the upside, resistance can be seen around $0.2900. XLM/USD was rejected already on a few prior occasions, by the above descending trend line. July 25-2 and then most recently September 23, all saw respective bull runs halted.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 33 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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IOTA Price Analysis: Current Behavior Raises Concerns of Another Drop in the Price

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  • Current technical indications still point to downside risks for IOTA’s MOITA price.
  • Near-term chart view sees a rising wedge pattern. The daily chart observes a bearish pennant formation.

The IOTA price remains at risk for now of a breakout to the downside. It appears more likely that downside pressure will be seen, in comparison to any upside surprises. Despite this, IOTA’s native token has made solid recovery in just over a week of trading. Since 25th September, it has gained 8%. Trending higher has been observed from a low of around $0.5200, up to current levels around $0.5600.

IOTA Developments

Most recently, Bitpanda announced they now offer deposit and withdrawal services for IOTA. Bitpanda is fintech company based in Vienna, Austria. They specialize in selling and buying Bitcoin and other cryptocurrencies. Becoming Europe’s leading retail broker for Bitcoin, Ethereum, Litecoin and more, boasting a user base of over 900,000 users. “We are very pleased to announce not only withdrawal and deposit functionalities for IOTA on Bitpanda, but also that Bitpanda now officially supports the latest IOTA tech — IOTA Hub,” as stated in their most recent blog post.

This move goes to show the growing presence IOTA is having across the market. The market acknowledgement of the foundation’s technology. IOTA’s MOITA is currently the 11th largest cryptocurrency by market cap, which is seen at $1.5 billion.

Elsewhere, as covered previously, the foundation is very close to revolutionizing the car insurance industry. They presented a new project in which they have been working on at bIOTAsphere. This was a proof of concept technology, known as Tangle. Full details mentioned in the previous article.

Near-term Technical Review 

IOT/USD 60-minute chart

Looking via the 60-minute chart, current price action has formed a rising wedge pattern. This price behavior makes it susceptible to a breakout to the downside. Should the bears manage to breach the lower support, sellers could pile in. To the downside, support in this view can be seen tracking around $0.5650. Further to the downside, 60-minute support should come into play around $0.5420.

Daily Chart Technical Review

IOT/USD daily chart

For over a month now, price action, as clearly seen on the daily chart view, has been firmly within consolidation mode. The range is getting tighter, building up the likelihood of an imminent breakout. Resistance is sitting just ahead around $0.5850, very close to current levels. Support eyed at $0.5430, a breakout could see the price tumbling. A potential downside target would likely be around the $0.4000 territory, testing 14th August low.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 33 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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