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Telegram: What’s The Noise All About?

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There has been a lot of noise lately about Telegram.  When I first looked at the messaging app, it looked a lot like just another messaging platform.  Does the world really need another one of these? There are already over a dozen. Facebook Messenger leads and that is a huge competitor.  And then there is WhatsApp and WeChat.

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I’m not a paid shill for Telegram. I write about things that are interesting to me and hopefully give you something to think about.  Like a lot of others, I am hearing valuation numbers for Telegram that seem ridiculous. It’s time to do some digging. So let’s get started.

The Biggest Asset: 200 Million Users

Over the course of the last 4+ years Telegram has connected 200 million users, mostly cryptocurrency owners.  This clearly has to be their core asset in placing a value on the company.

After that, there is just one question.  How much money do 200 million users generate?    Here is founder Pavel Durov’s answer:

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“We believe in fast and secure messaging that is also 100% free. Telegram is not intended to bring revenue, it will never sell ads or accept outside investment. It also cannot be sold. We’re not building a “user base”, we are building a messenger for the people.”  Sounds a lot like Karl Marx.

Is Telegram’s non-profit approach any different the bitcoin or Ethereum? Not really.  What makes Telegram different from the start is the valuation.

According to several estimates, Telegram is aiming to bring in as much as $1.2 billion with its ICO.  Recently an independent analyst predicted that by 2023 Telegram could be worth $200 billion. How can a company that intends to remain 100% free generate so much value?

Telegram Whitepaper Reveals Huge Vision

Once you get a peep into Pavel Durov’s whitepaper, it becomes clear that Telegram intends to be much more than a messenger app. The fact that Telegram’s 200 million users are believed to be overwhelmingly cryptocurrency or ICO owners gives Durov the perfect target audience to aim a new cryptocurrency that he believes is a bona fide improvement over bitcoin and Ethereum.  Here are several key tidbits from the whitepaper.

Neither bitcoin or Ethereum have the capacity to replace VISA or Mastercard. The current architecture limits bitcoin transactions to a maximum of only 7 transactions per second and 15 transactions per second for Ethereum. This is insufficient speeds resulting in higher transaction costs.

Secondly, new users starting to engage with bitcoin and similar technologies often get confused when trying to buy, store, and send their coins. Launched in 2015, Telegrams API represents a important gain.

Finally, Telegram claims the market of goods and services that can be bought with cryptocurrencies is limited, and the demand for crypto-assets comes mainly from investors, not consumers.  Telegram launched a payments platform in Q2 2017 aiming to change all that.

The Vision

Telegram claim to be uniquely positioned to establish the Telegram Open Network and be the first mass-market cryptocurrency based on the following properties.

Speed and Scalability

The biggest advantage appears to be the TON use of multi-blockchain architecture that allows for processing millions of transactions per second.  This is still a long way from Visa and MasterCard at over 150 million transactions per day, but a major step forward nevertheless.

Intuitive User Interfaces

Any first time user will attest to the fact that dealing with exchanges, wallets and other crypto data sources can be daunting.  Telegram believes they can change that.

A Captive User Base

Over 200 million existing users already place Telegram among the five largest messaging services.  That is as many customers as PayPal. According to Forbes, Telegram is the cryptocurrency world’s preferred messaging app.

Promising A Giant Step Forward

We can pretty much agree there are three major issues crypto investors are concerned with: regulation, transaction speed and security.  The TON addresses processing speed and like everyone Telegram claims to have the security question answered. With no disparaging intended, only time will tell.

Business Plan Or Wish List

There have been enough ICOs sporting flashy whitepapers filled with globally disruptive technologies not to mention ecosystems to follow, that Telegram’s whitepaper really isn’t much different.  

The question that is stumping the investment world is: what is Telegram worth? Various estimates have placed a value of as much as $200 billion by 2023. If Metcalfe’s Law is applied, the value in five years could go even higher.

But those interested in the ICO want to know how much is Telegram worth today.  Even though you are not buying equity, you still need to know the probabilities of Telegram achieving its goals and being worth far more in the next few years.  

Telegram’s road map is laid out below.  I am in agreement with Bloomberg News that quoted AQR Capital Management as saying Telegram’s lofty valuations require everything to go right. There is lots of technology experience and wisdom behind that statement.

I like Telegram’s audacious plan. But at some point in the future, someone will miss a deadline, there will be a platform with faster transaction speeds and lower energy consumption.  That is the time when the risk will be in your favor.

Timeline

Q2 2017  Start of the development of TON

Q1 2018  Launch of Telegram External Secure ID

Q2 2018  Launch of the Minimal Viable Test Network of TON

Q3 2018  Testing and security audits of TON

Q4 2018  Deployment of the stable version of TON

Q4 2018  Launch of Telegram Wallet

Q1 2019  Creation of TON-based economy in Telegram

Q2 2019  Launch of TON Services, TON Storage, and TON Proxy

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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4.3 stars on average, based on 60 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: Ethereum Tops $550 as Altcoins Hit New Rally Highs

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The major coins are having another bullish day after a consolidation period with all of the top 10 cryptocurrencies sporting meaningful gains. Altcoins are leading the charge higher, as the switch in relative strength that we pointed out several times seems to be a lasting phenomenon, with the ETH/BTC pair confirming a short-term uptrend.

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BTC/USD, 4-Hour Chart Analysis

Bitcoin is also up today, but while the majority of altcoins are trading on new rally highs, BTC is stuck below the prior swing high at $8400, which is also a previously established resistance level. The dominant declining trendline is also in that area, and that strong zone could hold back the largest coin for a longer period. A breakout would confirm a new rising short-term trend, with the next major resistance zone ahead between $9000 and $9200.

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ETH/USD, 4-Hour Chart Analysis

Ethereum is among the strongest coins short-term, and with smaller cap altcoins also joining the rally, the whole segment could be ready for a move higher. That said, the broader declining trend is still intact with the coin trading in a strong resistance zone between $555 and $575. A new short-term uptrend is now confirmed but with the declining trendline just ahead, the coin could be in for volatile swings in the coming days. The next target zone is at $625, while support is found at $500 and $450.

Broad Altcoin Rally Lifts All Ships

XRP/USD, 4-Hour Chart Analysis

Ripple, which was among the weakest majors for a prolonged period is one of the leaders today, climbing above $0.75, and eyeing the next major level at $0.84, with tbe coin already being above the previously dominant declining trendline.

On a slightly negative note, correlations are still high between the majors, but there are standout performers despite the concerted rally. Among the long-term leaders, Litecoin is trading near $150, while Monero added to yesterday’s gains, and it’s testing the $240 resistance as we speak.

The early leaders of the rally are slightly lagging in the current short-term swing, but that is likely a sign of rotation, as the likes of EOS, NEO, and IOTA are also higher today, while holding up wrll above the correction lows.

With all of the majors on buy signals in our trend model, we expect the rally to continue even as strong resistance zones are ahead and the road will likely be bumpy after the steep and lengthy downswing.

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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4.5 stars on average, based on 225 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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Analysis

Rally Fades in Stocks as Apple Weighs on Nasdaq

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We warned yesterday that stock markets got vulnerable as the major US indices reached short-term overbought readings, and after a choppy Wednesday session, equities turned lower today in early trading. Apple fell by more than 2% in early trading on a supplier report regarding declining orders from the smartphone giant, and the sliding stock dragged the tech segment lower.

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S&P 500 Futures, 4-Hour Chart Analysis

While the short-term technical picture deteriorated, the losses are muted so far, and the rising short-term trendlines are holding up. Volatility ticked higher, with the VIX bouncing off its two-month lows, but the index is well below the levels seen in the beginning of the month, as Syria-related fears continued to ease and the Chinese-US trade spat also took the back seat in the mainstream media.

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DAX, 4-Hour Chart Analysis

Stocks finished broadly lower in Europe, while Asian equities reversed their early gains, with trading volumes still being low across the board. The economic calendar was almost empty today, with only the much worse than expected British retail sales figure adding to the string of negative surprises coming out form the UK this week. In the US, the Philly Fed index came in higher than expected, while weekly jobless claims were in line with expectations.

Dollar Stable as Short Yields Hit New Highs

2-Year Treasury Yields, 4-Hour Chart Analysis

Treasury yields resumed their rise in the quiet environment, and as the short end of the curve continues to outperform the flattening of the yield curve continues in earnest. While forex markets are still mostly flat, the Dollar is drifting higher against most of its peers in US trading.

AUD/USD, 4-Hour Chart Analysis

Commodity-related currencies are little changed, although both the Aussie and the Canadian Dollar are off their recent highs, and should they roll over, the bullish case would receive another hit.  Despite the weakening of the risk rally, crude oil continues to hit multi-year highs, with the WTI contract getting close to the $70 per dollar level today. Gold fell back below $1350, as the choppy consolidation pattern is still intact, and the slight risk-off shift wasn’t enough to trigger meaningful safe-haven flows.

Featured image from 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 225 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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Analysis

More Chance to Go Up for Litecoin

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Litecoin short term outlook is quite positive, while in a longer term, it’s somewhat mixed. Shortly, the digital coin may face a very strong resistance at $141, being currently priced at $140. As Dmitriy Gurkovskiy, Chief Analyst at RoboForex, says, Litecoin already tried to test this level earlier this week, but did not succeed.

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In the mid-term Litecoin is trying to break out the current range, and in case it finally manages to break out $141 and stay above, it may go up to $168. Before reaching this target, however, another downtrend may be formed, with Litecoin plunging to the support at $114 again. If the bears succeed in breaking out this level, too, another sell-off target will be at $87.

Current outlook, however, is mostly positive, with the key support being at $114 and the key resistances at $141 and $168. The MACD on D1 is in its negatives, but is going up, issuing a buy signal, while the Stochastic is in the positive area and confirms its buy signal, already issued some time ago.

Fundamentally, Litecoin has got much support this week. The market started buying out the coin once the news on the token being listed at Korbit appeared. As the recent reports say, the crypto started being traded on Korbit yesterday, while withdrawal should be available starting today, Apr 19. This is important for Litecoin: first, Korbit is one of the oldest and most reliable exchanges in Korea; second, as we have already stated a few times, if the crypto becomes widespread across multiple exchanges, its liquidity gets boosted, while the accessibility simplifies the transaction processes.

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Korbit decided to hold a contest, with the top 6 LTC/KRW traders getting prizes in Litecoin (the winner gets LTC 50, the runner-up will walk away with LTC 25). Meanwhile, Litecoin being available on Korbit also helped the crypto to rise on Bitfinex.

Currently, Litecoin is one of the most volatile currencies, mostly because of it always being in the news, which does good to its promotion. As such, it was announced a few days ago that LTC would be used as a payment method, and TenX already started developing a prepaid card for that purpose.

By: Dmitriy Gurkovskiy, Chief Analyst at RoboForex

Disclaimer
Any predictions contained herein are based on the authors' particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

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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5 stars on average, based on 1 rated postsI have two degrees in Social Psychology and Economy. After graduation I worked as the Head of the Laboratory of Technical and Fundamental Analysis of Financial Markets at The International Institute for Applied Systems Analysis. The experience and skills he gained helped me to realize my potential as an analyst-trader and a portfolio manager in an investment company. At the moment I'm a financial expert, writing for various financial media sources and a Chief Analyst at RoboMarkets.




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