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SEC Meeting and Aftermath: My Thoughts

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On Feb. 6, the U.S. Senate Banking Committee met with the SEC and CFTC on how to regulate cryptocurrency. The meeting was surprisingly better than expected from where I am sitting. They are going to be letting the free markets dictate a significant amount of the outcomes of these coins, but regulate in the places where they think they can help investors not get screwed over. The two initiatives that they seemed to be interested in were primary offerings and secondary market monitoring.

Primary Offerings

If you were thinking of offering a coin any time soon, things got a lot trickier. The key point in the meeting was that any token/coin that comes out should be classified as a security. Don’t be fooled by vague language on utility tokens vs. security tokens. You can still raise the GDP of small countries with these instruments, which means they want you to classify them based on what they are capable of doing. This is a big issue.

When you classify something as a security, you have to go through an advanced offering just like any other non-blockchain company. You need buyer personal information, tax information, and you need to begin reporting your inflows/outflows to the government so they can tax you properly. The way you offer the coins will be through something called a “Regulation D” offering, which gives you the ability to solicit accredited (another word for somewhat-wealthy) investors. In other words, the government has put a “you must be this tall to ride this ride” sign up for all offerings. This limits the amount of buying parties in an offering, and will most likely affect the scale of fundraising compared to what we have seen in the past.

The days of someone opening up a website and asking for ether in exchange for ICO tokens is all but gone. I am very nervous about security ICOs for one verifiable reason. In order to get on an exchange, you need to have legal proof you are not a security. Ask CZ at Binance if you don’t believe me. So, if you’re an ICO investor, you have to perform extreme due diligence on how the coin is being offered, and where it is being offered from.

If the coin is being offered from the Caymen Islands and you don’t need to do any paperwork to get in, you probably should go ahead and skip it right now. The SEC has already started calling out companies that are doing this, and there is no reason to give away precious ether for such a large risk of intervention.

Buying a coin as a security is not much better. A Regulation D offering is to ensure that anyone who bought the coin understands the risks. But how does the investor sell when no exchange in town is willing to touch them with a 10 foot pole? Perhaps we may see a Robinhood or Coinbase offering security tokens/coins on their exchange. No one knows just yet, and I am not betting on the outcome.

Secondary Market Monitoring

Regulators’ mention of secondary market monitoring was something I viewed as positive. There is wide scale market manipulation by people who have large amounts of bitcoin, and wield it like a sword whenever there is volatility in an exchange. There is also a significant amount of hacking, as we saw with NEM getting taken for more than $400 million. The sooner we can get identify bad actors and get them out, the sooner we can get mom and pop to invest portions of their IRAs in cryptocurrency ETFs. It will not happen until the playing field has been leveled, and the government feels that they have made a good marketplace for all investors, not just accredited ones.

What was purposely left vague in this meeting is how the coins that are already out going to be classified. These Asian marketplaces would be all but shuttered if the U.S. government holistically reclassified all coins as securities. Their businesses would be instantly in violation of the law for running unlicensed securities marketplaces, which means your money is now in jeopardy. This is where my strong suggestion will come in handy.

My To-do List for All Investors

I have mentioned on Twitter many, many times the importance of cold storage. There is absolutely no reason to have any money on an exchange right now. We just saw Binance shut down for “technical reasons” and I can assure you that this will not be the last time it happens. If you buy a Ledger Nano S/Trezor (Ledgers were sold out last time I checked their website… a good sign), you can store your coins via USB and never worry about anything having to do with hacks, exchange technical difficulties, and of course, it helps you hodl that much better when the opportunity arises.

Get out of short term plays. If you are trying to make a quick buck on the new privacy coin either in an ICO or secondary market trade, it just is too risky right now. We have bitcoin still under $10,000 with fantastic news, so why not just let the storm die down a little bit? We can wait for bitcoin to dust itself off, and then take a look at what deals we can get on certain coins.

Set alerts on Ethereum. The only thing I would ever buy right now is Ethereum at a good price. That price for me is $500 (okay maybe $550). If I see a price in that range, I will be buying. The Ethereum blockchain has so many people/companies working on it, that I think it’s place in blockchain is probably the least vulnerable right now. About 70-80% of all market cap in tokens is Ethereum-based tokens. Solidity, the coding language of Ethereum, seems to be very popular on job boards. People are looking for people to help them with Ethereum projects. To me, this means great things, and I will buy at good prices. No need to buy at $900. If it goes to $1,500 in a couple days, I will not feel bad. The risk will not match the reward.

 

None of what I am saying is financial advice. I am giving you life advice in saying that a cold storage wallet is vital. We may see some shady characters trying to make money from shutting down their exchanges and taking money with them. I think the next time I need to sell my coins will be when I can go to a regulated trading desk and ask them to slowly sell my holdings, and do carry forward losses so I am not destroyed with a 40% tax bill at the end of the year. It’s time to start thinking strategically, not financially.

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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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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