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Ethereum: Building A Lead In The Marathon

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A lot of what is written these days on cryptocurrencies fits into one of three categories. The first is a description of the latest price moves up and down.  We all know how much drama there is and that makes good headlines.  

Let’s call the second category the SegWit syndrome where we receive a description of the latest breakthrough in blockchain technology written from a developer viewpoint: hard to read and nearly impossible to understand.

In the third category is all of the other highly qualified writers and journalists that I have not already insulted.  Apologies to all.

For more than 30 years as a Wall Street analyst, hedge fund manager and Director of Research, my approach is to access things from an analytical perspective.  Technology is constantly changing the world but the things that make for long term business success pretty much stay the same.  That is why our bias tends to favor the crypto giants Bitcoin and Ethereum.

Focus On Ethereum

By now it is probably no longer necessary to describe Ethereum’s open source blockchain platform that features self executing smart contracts.  Everybody knows that by now, right?

As a business person and investor, I am drawn to the leadership already created by Ethereum founders.  Say what you will about Initial Coin Offerings, but Ethereum accounts for over 80% of that market.  But that is just surface stuff because if ICO were to stop overnight, the demand for Ether would not end.

One of the forces behind this prediction is the Enterprise Ethereum Alliance which is now just over a year old.  Membership totals somewhere near 300 companies from JP Morgan and MicroSoft down to much more modest enterprises.  The mission of EEA is to bring together Fortune 500 companies with blockchain experts.  This is a great selling tool for Ethereum and as the list grows, so does their competitive strength.

Capital And Competition

To be successful, it is critical to always keep an eye out for what is going on around your business.  It is a well turned phrase that if a business doesn’t disrupt itself, someone else will. That takes capital. These days capital is flowing into crypto in many different ways.

The Weird Journey of Algorand

Venture Capital are dying to find a way of tapping into the cryptocurrency wave.  As we pointed out in a recent article, VC’s have been wounded by things like crowdfunding and ICOs and looking for about any action.  That is when I came across MIT’s Algorand blockchain project.  It raised $4 million in seed money from two VC’s.  Now $4 million is chump change but still it made me ask, what were they thinking?

Here is how CoinDesk described the project.  Algorand constitutes a digital currency and transaction platform.  It represents the latest effort to build a wholly new blockchain aimed at tackling some of the perceived governance issues associated with distributed systems.

The Professor Speaks

The head of the Algorand is MIT professor,  Silvio Micali. In addition to spending 30 years in cryptography he is also a Turing Award winner.  So obviously he is no slouch.  But apparently all these years in academia has depleted his appreciation for Econ 101 which states that everyone behaves in a way to optimize profits.  Professor Micali and the Algorand platform appears to be forgetting the value incentives for crypto mining.

At a recent conference Macali explained his attitude and the Algorand approach in this way. “We must use incentives as a last resort.” “ When you put incentives out there, people learn how to use those incentives for making money in ways that are nearly impossible to predict.”  Wow, that sounds a lot like creative capitalism.

Crypto Socialism

Micali believes that miners who have invested lots of dough in expensive equipment are dealing in trivial computations and do not need to be rewarded.  Instead the Algorand platform uses “validators” who in return for doing trivial computations will not have to invest in expensive equipment.  

Coindesk describes Algorand as the latest effort to build a wholly new blockchain system. The best guess on a release date is sometime in the next year. Taking that statement at face value out of respect for the author, at this time,  investors in Ethereum have little to be worried about from competition.  In the meantime Ethereum founder Vitalik Buterin is working on something call a DAICO.  It is intended as an improvement on the current Ethereum ICO process.  As we suggested earlier, when a tech company disrupts itself, it reduces the chances of being overtaken by others.

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 82 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Analysis

Crypto Update: Coins Drift Sideways as Trading Activity Plunges

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Liquidity dried up in the cryptocurrency segment in recent days, as trading volumes have been declining progressively, while the major coins got stuck in tight ranges. Only a few coins show signs of activity, and the bearish short-term patterns continue to dominate the market. With a group of currencies, namely Litecoin, Monero, Dash, and Bitcoin itself clearly dragging the segment down, the short-term trend will likely continue, as the previous leaders are now showing strength either.

While all of the top digital currencies are showing some gains today, and the total value of the market edged close to $290 billion, major resistance levels are still towering above. The fact that the effect of the Bithumb hack faded away quickly is a positive here, but until signs of bullish momentum and a clear leadership forming, the short-term outlook remains bearish.

BTC/USD, 4-Hour Chart Analysis

Bitcoin continues to trade near the $6750 level, edging ever closer to the declining short-term trendline, in a bearish consolidation pattern. Bulls would need a sustained move above $7000 to negate the declining trend, but for now at least a test of last week’s lows is likely with a possible move towards the key long-term zone between $5850 and $6000.  The short-term zone around $6350 level provides support, while further resistance is ahead near $7350.

Ethereum Nears Trendline as ETC Attempts Breakout

ETH/USD, 4-Hour Chart Analysis

Ethereum has been among the strongest coins in the last few days again, and coupled with its long-term relative strength, the second largest coin is still the best candidate to lead a recovery. That said, the coin still faces strong resistance between $555 and $575, and bullish momentum is suspiciously weak. Primary support is found at $500 with further zones near $450 and $400.

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic has been positively diverging compared to the rest of the market, together with Binance Coin, and to a lesser extent Tron ever since its inclusion to Coinbase, and the coin moved above the key $16 resistance yesterday in late trading.

While ETC is slightly overbought from a short-term perspective, a consolidation above $16 and a subsequent move higher could confirm a trend change. For now, the short-term trend signal is only neutral, and traders should remain cautious given the broad downtrend in the segment

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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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Altcoins

Crypto Real Estate: The Time Is Now

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If you’re a Russian oligarch, an Asian billionaire or just a simple kid from South Jersey with giant aspirations, it is time for action in the newly emerging world of crypto real estate.  Here is why.

For the average home buyer the price of a home has increased about 1.72% annually over the past 10 years.  That is just slightly more than the 1.49% rate for the U.S. economy. Things have changed somewhat in recent time and we read Case Shiller numbers placing the rate between 5%-7%.

For investors in bitcoin, the action is taking place elsewhere in the real estate world.  It is in the world of the super high-end real estate where BTC and other cryptos can play a role.

If your soul contains an ounce of cynicism, at this point,  you are probably saying what is new about the connection between crypto and real estate?  The answer is arbitrage. Never have high-end property prices been so high and crypto prices so low.  It would be a classic arbitrage to sell high-end real estate and buy bitcoin.

Natural Buyers For Bitcoin

There are plenty of statistics on housing and loads of public records revealing who owns a given piece of property.  The US government claims that 9.6 million Americans own second homes and perhaps 16% own investment property.

But when it comes to the true high-end market, global real estate is definitely in the billions. For example, take penthouse in 432 Park Ave in New York that, when new, sold for over $100 million in cash and you get the idea.  This is a market where anonymity is prized and protected. This has long represented the “no brainer” for bitcoin to gain acceptance. And best of all, it is perfectly legal medium of exchange.

Enter Propy (PRO)

Here is a company that appears to be positioned to take advantage of transactions in the global ultra high-end real estate market. Before getting started, one thing needs to be disclosed.  I neither own or am being compensated for writing about Propy. I stumbled across the name purely by accident.

Propy.com fancies itself as being dedicated to solving the complexities of purchasing property across borders.  They claim to be the world’s first international marketplace. The PRO token is built on the Ethereum ERC20 standard. Propy raised $15.4 million with their ICO last September which places a value on the company of roundly $100 million.

So PRO may not rank with the likes of Telegram but they are not exactly chopped liver either. With the spread between the price of ultra high-end real estate and bitcoin never having been greater and the perpetual need for anonymity, the team at PRO may find itself in a sweet spot no matter if the like it or not.

The First Crypto Test In Rome On June 28

CCN.com reports that PRO has managed to team up with the Hilton family-owned real estate broker Hilton & Hyland in an auction of a Roman villa named the Palazetto Mansion aiming to snatch $38 million in dollars or crypto from the buyer.  This is not first effort of its kind but it is by far the largest.

Arbitrage In The Air

Events in Rome on June 28 will be most interesting as much for bitcoin as for PRO.  This is not to say that bitcoin is the only crypto in the world, just the largest and best known. Nevertheless, the total value of bitcoin is now just a little over $114 billion so every billion of future real estate transactions will make a difference at these levels.

Perhaps this is all wishful thinking on the part of someone who owns neither PRO nor BTC but several things are obvious.  First, those folks that put their hidden billions in real estate using corporate identities are not casual investors but savvy players with lots of high priced advisors.  Arbitrage spreads between ultra high end real estate and crypto present a pretty irresistible attraction. Just something to consider when investor psychology toward crypto in general stinks.  

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 82 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Analysis

Crypto Update: Coins Pop Higher as Consolidation Continues

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Trading activity increased in the major coins today, amid a mixed news flow, and for now, bulls scored a small victory following last week’s bearish price action. Bitcoin, Ethereum and most of the largest digital currencies gained several percents, despite the weekend’s deterioration, and although the technical setup didn’t change significantly, an immediate breakdown has been averted.

The discouraging BIS report that has been making waves today wasn’t enough to push the coins below support, but for now, the short-term strength left the trading range intact with the primary resistance levels still keeping a lid on prices. Given the uncertain long-term picture, the coming weeks will be crucial for the largest coins and the whole segment alike, with Bitcoin being in the center of attention after its long period of relative weakness.

BTC/USD, 4-Hour Chart Analysis

Bitcoin held up above the April low, despite the bearish short-term picture, and the coin the highest price level in a week, breaching the $6750 level in the process. While the most valuable coin fared relatively well today, it clearly remains a laggard from a broader perspective, and it is still trading in a declining short-term trend, with several strong resistance levels just ahead.

The $5850 is the key from a long-term perspective, with further support levels at $6500 and $6275 and resistance ahead at $7000 and $7350.

Bearish Rotation Among Altcoins

ETH/USD, 4-Hour Chart Analysis

On a negative note, the leaders of the latest rally were among the weaker coins today, and that is a sign of bearish rotation in a segment, and until major resistance levels are broken traders shouldn’t enter new positions here. Ethereum managed to rally above $500 yet again, but it remained below week’s bounce high, leaving the trading range intact, while the declining short-term trend is also still dominant.  Strong resistance is still ahead between $555 and $575, while support below $500 is found at $450, $400, and $380.

EOS/USD, 4-Hour Chart Analysis

EOS, which is one of the strongest majors technically speaking also edged higher today, but it remains stuck in the declining short-term pattern, and below key support/resistance zone near $12. The coin is well below last week’s high and until a confirmed short-term trend change, traders shouldn’t enter positions here.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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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4.6 stars on average, based on 279 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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