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Energy

ICO Analysis: MyBit

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As we previously noted in our analysis of Suncontract, the demand for electricity is expanding exponentially. From electric smart cars to artificial intelligence, everything is going to need more electricity. MyBit notes in their whitepaper that Elon Musk, a man who knows a fair bit about electricity, says that there will be 20-30 million rooftops installing solar panels annually, globally. MyBit, like Suncontract, believes these people should be empowered to contribute their solar power to the grid. While Suncontract intends to build infrastructure in order to create a decentralized network of producers and consumers, MyBit is more focused on linking the nodes in such a network – and by that easing use, guaranteeing payments, and incentivizing innovation.

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Centralized financing systems have worked well for most of the history, but we are reaching a tipping point where they will no longer be able to scale with demand. Our proposed solution is to utilize Ethereum’s Blockchain and smart contract functionality to enable decentralized crowdfunding and revenue sharing for infrastructure that is already generating revenue. This enables the energy infrastructure to scale as needed to keep up with growing demand. It is not restrictive to location (from a financial infrastructure perspective), incentivizes investors with realtime revenue distributions, and enables decentralized energy solution providers to sell more units.

Mybit and the Future of Energy Consumption

Studies show that energy consumption is moving to countries not affiliated with the Organisation for Economic Co-operation and Development, and such countries also warrant the most difficulty in satisfying demand. This creates an economic opportunity for renewables to flood into these markets as demand grows.

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The MyBit token will be used to buy and sell the renewable energy, and 1% of all transactions will be redistributed amongst the token holders, by percentage of stake. Thus, the profitability of the MyBit token is directly related to the success of the platform – the more systems added to the network, the more energy bought and sold by those systems, then the more profit each token will yield. These profits holding actual value is, of course, dependent on market exchange rates – thus, severe volatility in the Ethereum market could make it difficult to develop part-time businesses around the model, but passive users might profit handsomely with little extra effort.

Beyond Energy

The MyBit system is not only intended for decentralized energy, however.

Similar to the process outlined above for commoditizing decentralized energy, we plan to use our model to foundationally drive the evolution of AI infrastructure implementation.

It is unclear exactly what is meant by “foundationally drive the evolution,” but it would seem that at least computational resources could be made available to AI companies in this way. Several other ideas are floated in the whitepaper, as well:

  • Infrastructure Investment Swaps
    • “In traditional investment models, profits are not truly realized until an asset is
    • paid off, sold, etc. and the initial principal is not available to the investor until after this period. This decentralized model utilizing Blockchain tokenization creates liquidity from the beginning, which is an immensely valuable and powerful function.”
  • Machine-to-Machine Payments
    • Imagine a robot paying another robot to repair it, or a vending machine paying a delivery robot for restocking.

In day to day to use, MyBit’s design calls for agnostic payments. Any currency should work, although all funds eventually become $MyB tokens. Any situation where there are barriers between entrepreneurs and funding, or people and resources, the MyBit platform will have opportunities to return value. Unfortunately, it will be among a sea of competing interests, and a lot of things have to go right for it to actually succeed long-term.

MyBit Team

Prague-based (American) founder Ian M. Worrall has a few credits to his name, many of which are blockchain related. One of his first ventures was Auction Pyschic, which he says he grew and sold within 8 months. His last position was with Encrypted Labs, who acquired his firm Adorn Labs in August last year. Notable as to his business chops is that he was deemed “a top 20 student Entrepreneur in the USA by the [Global Student Entrepreneur Awards] in 2014.”

CTO Ching Pong Siu has a lot more of a career behind him. In April, he finished a stint working for iSunTV as an Engineering Manager. iSunTV is tangentially related to MyBit, as it is “rebuilding the media industry on blockchains.” Before that he apparently worked on Bitcoin gambling type applications, for Bitgames. Dating back to 2011, he has held significant positions in regards to technological implementation everywhere he has been.

Reporting to him are a litany of developers for every aspect of the project, already on board and apparently on salary. Among these is Alex Dulub, who “brings 10+ years experience in designing high-performance and functional enterprise applications. ” This is encouraging.

Token Distribution Details

5,000,000 $MyB tokens will be put up for sale on July 17th.

Our goal is to limit purchaser risk to the extent reasonably possible. Brave New Coin is managing the escrow release schedule and if at any time the MyBit team does not meet development expectations, then the remaining funds still held in escrow will be returned to contributors.

The whitepaper does not describe what becomes of any tokens that are not sold. Tokens will be made available at the conclusion of the crowdsale – which ends either when all tokens are sold or when 30 days have passed (August 15th). The tokens will entitle you to 1% of any transaction that takes place on the MyBit network, minus Ethereum transaction fees.

The Verdict

There is a lot to like about MyBit. Like Suncontract, MyBit wants to leverage obvious market trends and incidentally do a lot of good for society. Expansion of renewable resources is a cause that even governments might tap the MyBit Foundation and MyBit.io to help with it. However, MyBit will not be the only one in this market – not by a long shot. The advent of AI and increased presence of decentralized markets/market opportunities are going to spawn the birth of dozens upon dozens of companies serving similar or parallel needs. MyBit’s ultimate success will be in specializing in a few of these use-cases it envisions and fomenting the marketplaces therein, thus a big part of our assessment must be on how much faith we have in the team to get to the 100-yard line.

Risks

  • Regulatory resistance.
  • Adoption could be too slow to stimulate token valuation, resulting in a downward spiral.
  • Suncontract or other plays crowding MyBit out of the market.
  • Large players like Google or Amazon taking an interest in the idea and instantly offering it to their billions of users.
  • Ethereum volatility could make it difficult for market participants to realize their earnings. A market crash could result in a user exodus/token slaughter. Nothing would prevent MyBit from moving to another platform if necessary, however, such as, say, NEO.

Growth Potential

  • The platform’s agnosticism towards application and currency make it nimble; likely to be used in surprising ways once out in the wild.
  • Capitalizing on emerging markets and their demand for resources will be a net positive for the token; focusing on a few, as they intend, is very good business sense.
  • Machine-to-machine payments will be spearheaded by players with lots of capital – this could lead to quick spikes in growth as MyBit is tapped to implement solutions.

Disposition

One wishes there were more known quantities behind the scenes at MyBit, more people with history in such monumental innovations, but it doesn’t matter. The fundamentals are all there, all that is required is a proper execution. Taking into account the above listed risk potential, the author feels comfortable giving MyBit two separate ratings.

The first rating is in regard to its potential versus Suncontract in the decentralized energy business – 4.9 to Suncontract’s 5.0.

The second rating is in regard to the MyBit platform more generally and its potential to make serious money after being implemented in at least a few industries – 6.25.

Investment Details

The MyBit token sale sale begins on July 17th. If your investment is within the first 9,375 Ether sent to the smart contract address, you will be issued an extra 33 $MyB per Ether. After that the rate will be 100 $MyB to one Ether. If you believe you’re going to get involved in MyBit, it might be wise to create your account before the launch, because the servers will be experiencing extra load at the time of the sale.

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1 Comment

  1. embersburnbrightly

    July 9, 2017 at 5:45 pm

    Another well-researched, well-written, and well-reasoned article; thank you!

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Energy

ICO Analysis: Suncontract

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Suncontract is a concept whose time is quickly approaching – a peer-to-peer marketplace for renewable energy. The push to renewable energy is global. According to Bloomberg, over 70% of the more than $10 trillion projected to be injected into new energy sources will go to clean energy by 2040. Analog energy sources will become less and less common, demand will increase with the rise of electric cars, and so renewable energy will become the new norm.

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The project itself is incredibly ambitious as far as ICOs go. It involves dozens upon dozens of challenges – legal hurdles, building the network, interconnecting generators, interfacing with outdated electricity grids, and so forth. It is monumental in scope, and therefore needs a suitably high amount of raised capital to get off the ground and running – which assumes it does not hit some governmental brick wall down the road. For all the goodness there is in this concept, we immediately are entering a heavily-regulated industry where said regulations vary widely.

Let’s see how they handled the hurdles so far.

(more…)

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Commodities

The Aftermath of the Qatar Ultimatum

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The ultimatum that Saudi Arabia and its allies gave to Qatar expired on Monday, and the leaders of the nations participating in the “diplomatic blockade” gathered in Cairo yesterday to discuss the answer by the Gulf state. Investors all over the world were watching carefully, as the event had the outside chance of a significant risk event, with the Irani-Saudi-Turkish power struggle being in the background of the chain of events. The crude oil and natural gas markets are in the forefront of the crisis as well, and the prices of those crucial commodities were closely following the events in the past few weeks.

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Qatar Calls the Bluff?

As Qatar dismissed the demands of the Saudi alliance, the blockading nations faced a situation where they needed to show strength without triggering anything that they didn’t want in the first place. Yesterday they decided to “maintain the sanctions” but did not escalate the crisis for now, despite stating that they would take further steps in the appropriate time, and saying that Qatar’s answer lacked any substance whatsoever.

We would say that Qatar “won” this round by reading the signs well, as the superpowers verbally intervened, trying to calm tensions and avoid a regional conflict that could destabilize the energy complex and the whole Middle East. That might be the reason of this kind of pointless ultimatum that first seemed to be a “casus belli” for more drastic measures.

The Oil Price Tango of Saudi Arabia

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The OPEC’s oil production cut, that was aimed to stabilize the energy segment is still in jeopardy, as Iran is one of the most crucial players in the deal, as the country is still in the ramp-up phase following the lift of the Western sanctions. On an interesting note, it was precisely Saudi-Arabia who launched a price war against the shale industry in 2016, driving crude prices down below $30 per barrel. Now the kingdom got an unexpected help from the global central banks, in the form of rising yields, as the leveraged players in the rising shale industry already started to curb their expansion as credit conditions started tightening.

What Happens Next?

Oil already staged a strong rally in the face of the risk-off shift of the last few days suggesting that investors are removing their worst case scenario bets that would be the collapse of the fragile OPEC deal. That said, we expect oil to remain rangebound in the coming months, as the supply situation is only partly determined by the OPEC, and the slightly shaky shale industry still gives a flexibilty to global production that was impossible in the previous decades. The 4-week production average of the US tells the story, as in the last couple of years the output

The 4-week production average of the US tells the story, as in the last couple of years the output remarkably followed the moves in the price of oil, while before that there was a very low correlation. That fact should cap the price of the crucial commodity and it is unlikely that we see the per barrel price go over $60 anytime soon, barring a full-blown default wave in the sector.

Who Will Rule the Middle East?

The more pressing issue for the world is the question of the precarious balance of the region that could turn upside down if oil and natural gas prices remain “lower for longer”. With the new leadership of Saudi Arabia, the strong but politically divided Turkey, and the recovering Iran all in for dominance, the Qatar crisis might be an important step towards a solution- for better or worse. But for now, the imminent threat of a major conflict seems to be low, and that could cause a sigh of relief across the globe.

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Analysis

Quarterly Long-Term Outlook: Gold, Stocks, Oil, and the Dollar

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Traders benefit the most when they trade a trending market. Trading markets are known to be notorious in hitting stop losses on either side, unless one enters near the lower or upper end of the range. In order to help our readers trade on the right side of the trend, we have analyzed the four most followed asset classes – the US dollar, the S&P 500, gold and crude oil.

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  • Go long the US dollar index (DXY) near the 94 levels with a stop loss of 91.9
  • Remain long on the S&P 500 if it stays above 2400 levels. Go short only if 2400 level breaks down
  • Look to buy gold in July, as August and September are cyclically strong months
  • Avoid swing trades on crude oil, as it is likely to remain volatile and range bound

We have analyzed both the long-term and the near-term charts and provided our recommendations. Read on to find the best sectors to profit from in the third quarter of this year.

The US Dollar

The US dollar has just ended its worst quarter since the third quarter of 2010. The Dollar lost strength as the central banks of other developed nations like Canada and Europe hinted on an end of monetary easing. Additionally, if the economic data weakens, traders will lose confidence that the US Federal Reserve will be able to hike once more in this year. Doubts remain on the promised tax reforms by President Donald Trump.

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Weekly Chart

The US dollar has been stuck in a range for the past two and half years. The breakout in November of last year could not be sustained and prices fell back into the range. Currently, the dollar index is in a strong downtrend that can take it to the 94 levels, which can be a good entry point to play for a bounce as the RSI is close to the oversold zone. However, any pullback will face resistance at the downtrend lines, as shown in the chart.

Daily Chart

After reaching the top on January 03 of this year, the dollar index has been in a steady downtrend. The fall gained momentum and the pullbacks were stemmed at the downtrend line, as shown in the chart. The dollar index will remain weak as long as it trades below the downtrend line.

However, between the current levels and 94 on the lower side, the dollar index will find a bottom. It should offer us a good entry point close to the lower end of the range that can be played on the long side with a stop loss placed beneath the lows of 91.9.

How to Trade the Dollar Index

  1. The Dollar has not fallen for three consecutive quarters since 2009.
  2. Hence, we expect the dollar to rebound in the third quarter.
  3. Traders should go long once price nears the 94 levels.
  4. Stops should be maintained below 91.9 levels and a target of 98 can be expected

The S&P 500

July has notched an average gain of 1.5% on the S&P 500 from 1928-2017. However, as the quarter progresses, the results tend to weaken and finally turn negative in September, according to the chart from Yardeni Research.

Additionally, the post-election July has seen an average gain of 2.2% since 1953, according to the Jeff Hirsch, Stock Trader’s Almanac & Almanac Investor Newsletter and a Research Consultant at Probabilities Fund Management, LLC.

Now, how do we see the third quarter panning out?

Weekly Chart

The S&P 500 is rising inside an uptrending channel. Its trend is clearly up. However, it has not pulled back towards the 50 week EMA since end-October. Therefore, a negative divergence on the RSI becomes that much more important. 2453.8 is the level to watch out for on the upside. If this level is broken out, then a move towards 2480-2500 is likely, where the index will again face resistance. Let’s zoom and see the same chart for more insight.

Weekly Chart

The S&P 500 has formed a wedge, which is a bearish pattern. The index is threatening to break below the trendline support. If it does, the index will start the much-awaited correction.

Daily Chart

The daily chart shows that the 2400-2415 level is currently holding up well, however, the index faces selling pressure close to the 2450 levels. We expect the index to start a correction in the third quarter and reach 2320 levels if it breaks below 2400 levels.

How Should you Trade the S&P 500 in the Third Quarter?

  1. As long as the 2400-2415 level holds, go long on dips.
  2. If 2400 level breaks, look to sell on any rallies for a target of 2320.
  3. A swift pullback at 2320 is likely, hence, close shorts at 2320 and wait for the next setup.

Analysts Forecast for the S&P 500

S&P 500 forecast in March poll S&P 500 forecast in June poll
Mean 2394 2444
Median 2410 2460
Maximum 2600 2630
Minimum 2100 2100
No of forecasters 43 51

The details of each forecast can be seen here.

Gold

Traders should look to buy gold on dips in the month of July. But why?

Since 1975-2016, the second quarter has been the worst for gold and the tide turns in the third quarter, which is the best quarter in the year followed by the fourth, as shown in the chart below.

When we dig further, we find that July is a relatively calm month for gold. Activity picks up in August and peaks in September, which has a good history of strong performance, as shown in the chart below.

What can we expect from gold in the third quarter of this year?

Weekly Chart

The weekly chart shows that gold is stuck in a downtrend, bound within the falling channel. It has been attempting to breakout of the channel for the past one year, but has not been able to do so. A breakout from the channel will signal a change in trend. Let’s zoom-in on the chart and then analyze again.

A Closer Look

On zooming, we find that gold has formed an equilateral triangle pattern. A breakout from the triangle has a pattern target of 1600 on the upside, however, 1400 is likely to act as a stiff resistance in between.

On the other hand, a breakdown from the triangle has a lower target of 840, with major supports at 1120 and 1050. So, what can we expect in the third quarter?

Daily Chart

If we look at the near-term charts, we find that gold has formed an ascending triangle pattern. A breakdown of the triangle will signal a range bound action between 1200-1300 levels for the third quarter. The 20 and the 50-day EMA’s have been crisscrossing each other, which

On the other hand, if the yellow metal finds support at the trendline, it is likely to trade higher towards the 1300 levels.

So, How should Traders Approach Gold?

  1. Look to buy gold on dips in July. We expect higher prices in August and September.
  2. First level to watch is 1235 on the trendline. If this level doesn’t break, we should look to buy on any uptick and move above 1250. The stop loss can be placed below 1230 levels and the target price is 1300.
  3. If, however, the trendline breaks, the traders should look to add close to the 1210-1220 range and keep a stop loss below 1190 levels. The first target price will be 1260 and 1300 thereafter.

Though we are positive on gold for the second half of the year, Robin Bhar, head of metals research at Societe Generale holds a different view. He expects gold to average $1225/toz in the third quarter and $1200/toz in the fourth quarter. He points to the Fed tightening, either by means of higher interest rates or balance-sheet deleveraging as the reason for the fall in gold prices from the current levels.

Crude Oil

Crude oil continues to be in a crisis, as the supply glut has failed to resolve even with the production cuts by OPEC and its allies.

The investment banks are scaling back their lofty forecasts given in December of last year and in the first quarter of this year.

A Wall Street Journal survey of 14 Investment banks have forecast WTI to average $52 per barrel in 2017, a decline of $2 from a similar survey in May.

Goldman Sachs has cut its forecast for the third quarter to $47.5 per barrel from an earlier forecast of $55 per barrel. Similarly, Bank of America has cut its sky-high forecast of $70 per barrel to $47 per barrel for the third quarter. Others like Citigroup, JP Morgan Chase and Societe Generale have also cut their earlier predictions. Where do we see crude oil in the third quarter?

Weekly Chart

Crude oil has been trading in a range of $42-$52 per barrel for more than a year. After breaking out of the range in December, oil spent most of the first quarter above the range. However, in the second quarter, it fell to the lower end of the range as crude oil inventories showed no signs of reducing.

In the third quarter, we don’t expect the range to be broken on either side, unless OPEC and its allies decide to deepen their production cuts or Saudi Arabia abandons the production cuts and starts pumping oil.

Daily Chart

Crude oil is not showing any clear pattern to suggest a trade at the moment. The current pullback is likely to face resistance at the 46.71 and at 48.4. The next fall towards 42 levels will be a buying opportunity. However, traders should wait for a successful retest of the lower end of the range before buying.

What is our Advice for Crude Oil?

  1. Range bound trading is likely to continue in the third quarter.
  2. Difficult to swing trade oil unless we get an opportunity to go long near the $44 per barrel levels

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Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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