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Op-Ed

Planning For The Crypto Price Recovery

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If the title seems a bit disingenuous, my apologies.  We have just finished the worst three months of crypto pricing in the history of mankind (no hyperbole needed).  What appeared as capitulation last week was followed by further selling right up to the end of the first quarter. It has been a humbling experience.

It is safe to speculate that more investors are asking the question: when will the selling end rather than how can I position for the inevitable recovery of prices? It is important to focus on the word inevitable because that belief is what got us here in the first place. Yes, prices will recover because of crypto’s underlying power to make change in our world.

So the better question should be: how to develop a strategy for that time?  Chances are unless you got started late in 2017, you probably were drawn to one or more of the thousands of ICOs; sometimes doing your own homework, sometimes getting your information from a publication like Hacked.com.

Either way, you were probably attracted by the outsized returns investors were getting.  In other words, your motive was purely making money, neither the business model or the prospects of long term success was the overriding issue.  Totally understandable; there are so many ICOs to choose from and reading white papers can be a confusing, somnia inducing experience.

Reviewing Your Crypto Portfolio

Perhaps your crypto portfolio consists of one or two of the big names and a smattering of ICOs.  What you will notice is that as poorly as bitcoin, Ethereum, Ripple and Litecoin have performed, in all probability the ICOs fared much worse.  Applying common sense would lead you to conclude that you should adjust your portfolio in favor of those beaten down ICOs. After all, aren’t they the cheapest and thus the best value.

Before making that move, consider the report from Deloitte Insights issued around the heights of the crypto price cycle.  If we could have applied the information back then, we could have saved some coin.

The report is titled Evolution of blockchain technology.  The reports focus in not exclusively on ICOs.  Rather it is on a total of over 86,000 blockchain projects over the course of nearly a decade.  

There are some interesting data points in the report that verify some of the things we have suspected all along.  Each year since 2009 there have been over 8,600 projects started on average, skyrocketing to over 26,000 by 2016.

Here is the more important data point; only 5% of these projects survived.  The average lifespan was less than 15 months. There is a message here for investors. In 95% of the ICOs from 2017,  before price levels recover for cryptocurrency in general, you chosen ICO may be out of existence.

Corroborating The Findings

The Deloitte report has been billed as the first empirical attempt to understand the evolution of blockchain.  For ICO investors this confirms that there is little difference in the success of fledgling blockchain projects from that of more advanced venture capital stage companies.

What it reminds us is that ICOs are a great place for risk capital but the risks multiply when investors overstay their welcome.  

In the world of stocks, after a prolonged bear market, the standard off the shelf advice is to buy large well capitalized companies because those are the proven companies that will lead the charge.  Over time this has proven to be a winning strategy. Even though it would be a leap of faith to compare crypto names like bitcoin, Ethereum, Ripple or even Litecoin with Dow Jones Blue chip companies, the principal is the same.

As we come to a close on the first quarter of 2018, we can look for better times going forward. Bon chance.

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 115 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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3 Comments

3 Comments

  1. BittBurger

    March 31, 2018 at 4:13 am

    Bonne* chance.

    Real-world adoption is a big factor for picking the best heavy hitter. Right now Bitcoin corners that market and surprisingly, Bitcoin Cash is the second runner up. Maybe not surprisingly. Litecoin on the other hand, has been around for nearly 9 years and only resurfaced from irrelevance because its founder worked at Coinbase one summer and talked the CEO into adding it. Literally, there is no other reason. It has seen zero adoption, zero forward progress, zero innovation, and zero adoption given its longstanding existence. Bitcoin Cash has just been added to BitPay’s offerings, enabling over 100,000 merchants (both brick and mortar, and online) to accept it as a form of payment. Numerous other companies including CheapAir, as well as most Bitcoin ATM machines across the country have added support for it.

    When picking amongst the heavy hitters, try to ignore the FUD of biased bagholders and twitter brigade armies, and focus on what’s actually seeing adoption and usage in the industry. In order of importance then, that would be BTC, ETH, and BCH. Once you venture outside of this realm, I have found that its safest to stick with “platform” coins that offer something innovative and typically have their own block chain. This would include ICON (ICX), XLM (Stellar), EOS, NEO, and others. Lastly, you end up in the ERC20 Ethereum Token world, where there are some outstanding possibilities, but nearly all of them are still in planning phase and have no product to deliver at this time.

    Unfortunately the SEC coming in and over-regulating ICO’s is probably what took the wind out of crypto’s sails. It was the very reason people swarmed in, and when you’ve got Google, Twitter, and Facebook all banning their ads, and then the SEC threatening to throw handcuffs on everyone, people tend to run for the hills. Land of the free…

    • kurecanthony

      March 31, 2018 at 9:18 am

      I agree with that statement stick to cryptos that have a purpose and have their own blockchain in effect. The big players are obsivouly Btc, Eth and Bch.

  2. DeadDuckWalking

    March 31, 2018 at 10:07 pm

    BCH will never survive because this shilled coin is an attempt to centralize Bitcoin. Former arms dealer R.Ver is only interested in power and profit, trying to take control of Bitcoin by attempting to replace it by BCH. BCH is almost exclusively in control by Chinese miners running a large percentage of the nodes on Alibaba cloud servers. At the moment one of the most centralized coins.

    BCH is hardly traded anymore and BCH trade pairs have already been removed from exchanges. It is losing ground on Bitcoin and there is almost no buy volume.or liquidity in BCH.

    People need to be aware of this and stay away from BCH because this coin will implode.

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Altcoins

Dash Price Analysis: DASH/USDT Downside Risks Linger Despite Trust Wallet Support Announcement

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  • DASH/USDT price action is moving within a narrowing range formation, subject to further downside risks.
  • Trust Wallet, Binance-owed crypto wallet provider, announces support of DASH.

Price Behavior

DASH/USDT has been trading within a $6 range for the tenth session in a row, at the time of writing. The upper part of this range should be noted at $73. Looking to the downside, the lower support of the formation is seen at $67. The price, like many of its peers within the cryptocurrency market, is stuck within a narrowing range block. They are all currently demonstrating strong downside vulnerabilities, given the current behaviour.

This trading range came after a steep fall in the market last Thursday, 10th January. Double-digit losses were seen across the board after moving within a prior narrowing range formation. DASH/USDT had a strong run from 15th – 24th December, gaining as much as 81% within that time frame. Following the high print towards the latter part of that period, at $102.50, price cooling was seen and then begun to trade sideways.

Between 26th December 2018 – 9th January 2019, DASH/USDT was moving between a narrow $86 at the high and $73 at the low. This led to the explosive breakout to the downside, where the price dropped around 20% on 10th January.

Trust Wallet Supports Dash (DASH)

Trust Wallet, a mobile crypto wallet owned by Binance, announced earlier this week that it has added support for Dash. The announcement followed after just a week ago, when the wallet provider revealed the support of Litecoin (LTC), Bitcoin (BTC), and Bitcoin Cash (BCH). In addition, the app also supports Ethereum (ETH), Ethereum Classic (ETC), Tron (TRX) and others.

The team at Trust Wallet, upon their DASH support update, also left users somewhat excited about further announcements lined up. They stated, “Going forward, we will monitor the performance and stability of our Dash release very closely, and if everything works well, hopefully, we can surprise you with more new coins in the coming weeks!”

Technical Review – DASH/USDT

DASH/USDT daily chart.

A breakout of the key mentioned levels that make up either side of the range, $72 and $67, will likely determine the next committed trend. Firstly, in terms of the next major area of support south, eyes will be on the December low area, $58. To the north, drop supply remains heading into and just above the psychological $100 mark.

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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4.6 stars on average, based on 111 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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Bitcoin

Bitcoin’s Year of Accumulation

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Although bitcoin looks poised to extend its January losing streak to five consecutive years, 2019 will be a year of slow accumulation for the virtual currency, according to Eric Thies, a well-known technical analyst. In the meantime, traders can expect the bear market to reach its climax once a new yearly bottom is breached.

Accumulation Year

In promoting the view that 2019 will be an accumulation year for bitcoin, Thies directed our attention to the major bear trend that emerged in 2015. That was the year bitcoin exhibited significant volatility, albeit in a lower range. Following the latest breakdown in price, bitcoin could be in for a similar trading pattern this year.

“Similar to 2015, 2019 may be the year of accumulation,” Thies said, according to CCN. This means bitcoin is likely to be an attractive investment in $2,000-$4,000 range – even with wild swings priced in.

Bitcoin’s volatility regime has changed dramatically in the last two months. Following a period of unprecedented calm, volatility surged to nine-month highs in the back end of December. Volatility will likely remain a factor for the foreseeable future as the technical tug-of-war continues. More on this: Bitcoin Maintains Narrow Trading Range as Recovery Faces More Resistance.

Circulation Grows

That bitcoin will remain highly volatile is supported by the recent influx of digital currency into circulation. Anonymous owners of dormant bitcoin wallets have been trading with greater frequency since October, which means their activity may have predated the November price collapse.

Data from Flipside Crypto recently showed that long-dormant bitcoin wallets have accounted for about 60% of the market’s circulating supply in the last 30 days alone. What’s more, active bitcoin supply has increased by a whopping 40% since the summer. This, of course, feeds into higher expected volatility.

If that’s not enough, consider that 1,000 addresses hold 85% of available bitcoin. As Bloomberg recently noted, many of these holders remained on the sidelines during the 2017 bull run and its subsequent collapse. If dormant accounts are becoming active again, there’s good reason to suggest that the whales are looking to re-enter the market.

Not Overnight

It’s reasonable to expect that bitcoin will become more attractive at lower prices, especially as more institutional investors access the crypto market in the coming year. But that doesn’t mean the accumulation will happen overnight. Previous bear cycles have taught us that downtrends can stretch for 1-2 years before any noticeable accumulation takes place. The only difference this time is there are more people involved, and more eyeballs on the price.

Additional reading: Crypto Winter and the Fed?

To demonstrate bitcoin’s potential at current levels, and why 2019 will be an attractive year to boost one’s holdings, it’s worthwhile to reflect on the cryptocurrency’s yearly lows rather than its highs. Below is a quick snapshot of bitcoin’s yearly bottoms stretching all the way back to 2012:

  • 2012: $4
  • 2013: $65
  • 2014: $200
  • 2015: $185
  • 2016: $365
  • 2017: $780
  • 2018: $3,200

Traders tend to focus on bitcoin’s lack of new all-time highs as evidence that the market is going nowhere, but these figures clearly show that BTC is a solid investment at almost any period in the last seven years (of course, this isn’t the case if you bought during the peak of 2018).

Make no mistake: technical analysis and market sentiment clearly show there is more pain ahead for bitcoin and the broader cryptocurrency market. But as the long-term value proposition continues to hold, there’s strong reason to believe we haven’t seen the last bull market. In the meantime, 2019 prices could represent a unique buying opportunity for those who missed the boat two years ago.

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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4.7 stars on average, based on 743 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Altcoins

Lite.IM Surpasses Facebook In Race To Support Cryptocurrency Compatible Messenger

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Since the early part of 2018, crypto traders have been bombarded with bad news.  Hacks, broken promises, and overall lack of enthusiasm have resulted in huge losses.  But more than that, some promising cryptocurrencies just haven’t survived.  As traders look to the future, they should begin looking at projects that have the potential to disrupt industries and take them to the next level.  One company that has the potential to accomplish that is Zulu Republic (ZTX).

Zulu Republic is an ecosystem of blockchain tools and platforms, designed as a place where people, businesses, and organizations can thrive on their own terms.  The company’s stated mission is to advance the development of decentralized technologies, to promote human rights and empowerment around the globe, and to reduce the global digital divide.

Well the company is off to a great start with the development of Lite.IM.

What is Lite.IM? 

Lite.IM is a project aimed at expanding global cryptocurrency adoption.  With Lite.IM, users can send, receive, and manage Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and the company’s native currency (ZTX), on Facebook Messenger, Telegram, and SMS (in the USA and Canada).  To get started managing these cryptocurrencies on the aforementioned platforms, users simply need to send a text-based command to the Lite.IM bot.  The commands are as follows:

Telegram:  @LiteIM_bot

Facebook Messenger:  @lite.im

SMS (USA and Canada only):  760-LITEIM-0

Competition with Facebook

On December 21st, 2018, Facebook announced that it was developing its own stable cryptocurrency that users would be allowed to exchange through its popular chat service, WhatsApp.  But while Facebook’s initial approach will target users based in India, Lite.IM is open to everyone in the world.  Further, Zulu Republic has previously mentioned that they expect to announce support for WhatsApp in the next few weeks.  It certainly appears as though Lite.IM has the upper hand here.  And that is before even addressing Facebook’s obvious privacy concerns.

When it comes to cryptocurrency, privacy and security have always been two issues at the forefront.  Given the rough year that Facebook has had in that regard, users must certainly be forgiven if they have trouble trusting the social media giant.  In September, 2018, Facebook announced that an attack on its computer network had exposed the personal information of nearly 50 million users.  Apparently, the hackers were able to exploit a feature in Facebook’s code to gain access to user accounts.  Even prior to this announcement, Facebook was already under Congressional scrutiny over revelations that a British analytics firm obtained access to private information from nearly 87 million Facebook users.  Not to mention Facebook’s rumored involvement with Russian election meddling.  Suffice it to say, it has been a tumultuous year for Facebook.

And while users may have concerns trusting Facebook’s ability to handle cryptocurrency data, they shouldn’t have those same concerns with Lite.IM.  Private keys are RSA encrypted with the user’s password.  Lite.IM will never ask for that information nor will it be stored.  Because of this, no third party will ever have access to that valuable information.

Conclusion

The truth of the matter is that Facebook is an absolute giant and has grown at an extraordinary rate since its initial public offering.  Facebook has hired some incredible talent, from executive positions to marketing to development.  And while one should never count them out, I simply wouldn’t be able to trust them with all of the recent issues.  Perhaps in time, after regaining the public’s trust, users could once again look to Facebook as a leader.

Fortunately, users have another strong and dependable option.  Lite.IM will allow users all over the world to manage popular cryptocurrencies via their favorite messenger platform.  Users should continue to stay tuned for future developments.

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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