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Tuesday Inferno Analysis

The picture for BTC and the alts is looking good. As traders come back from their summer holidays, it looks like the bull is also back in town and growing stronger with each passing day.

 

On a technical level, it’s been a great couple of weeks for BTC, as traders have pushed up through multiple layers of resistance. Regular pull-backs have ensured the market doesn’t get ahead of itself too fast, making this a strong and sustainable rally. The most immediate support levels at $6,800 and $7,000 held on tests. At the time of writing, BTC is bumping against the ceiling of downward-sloping support, with the next target to break around the $7,500 zone.

 

On the daily chart, we’re sat between the 50 and 200 moving averages, and RSI is heading north – though not yet into overbought territory. A look at the daily RSI over the last several months shows that it has been an excellent indicator for buying and (particularly) selling. We would advise caution, though: in the last bull market, there were periods when the daily RSI spent significant periods of time over 70, and selling there would have meant missing out. When BTC goes into bull mode it’s a raging bull, and the rules change.

 

The technical picture is broadly positive for now, then, though breaking $7,500 and then $8,000 would consolidate that impression. Pushing above the 200 MA would give traders a confidence boost, and likely when $10k is breached there will be another wave of media interest and speculation (of both kinds).

 

Right now, volumes are still lower than they were earlier in the year or at the end of 2017. Nevertheless, the mood has changed over the last month. More longs are opening on the futures markets, with CME reporting both a reduction in shorts and an increase in longs. On top of that, another 100 million USDT have recently been printed, suggesting incoming demand. Big money (which usually equals smart money) is signposting its expectations.

 

On the other side of the coin, one other factor that has attracted interest in recent days is the movement of large quantities of bitcoins from a wallet that has been dormant since 2014. Around $100 million has apparently been moved to Bitfinex and Binance, presumably to sell for USD and altcoins, respectively. We’ll take a closer look at this tomorrow, but that could indicate considerable sell pressure in the short term. Right now, though, the market doesn’t seem to care.

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Review: Carstens ‘simply superb’ in comic role as Central Bankers’ Central Banker

Europe’s finest up-and-coming comedian is worthy of Ali G in his satirical creation as the head of the fictional ‘Bank of International Settlements’.

 

It’s not often that a comedian is brave enough to take on a subject as dry as global banking, but Agustin Carstens – a previously little-known performance artist from Mexico – has successfully done just that. For the last several months, Carstens has been touring Europe, remaining in-character at all times, delivering weighty speeches about the perils facing the global economy from an irresponsible younger generation obsessed with digital cash. We were recently able to take in one of his gigs – and were absolutely blown away by his act.

 

The genius of Carstens is not in his deadpan delivery – a style long employed by comedians, perhaps most notably the UK’s Jack Dee. It is the sheer perfection with which he walks the unlikely line he has chosen. Watching him perform, unsuspecting audiences are left with the distinct impression that Carstens genuinely believes his own message, and are uncertain whether they should be laughing with him or at him: an unsettling but simultaneously riotously hilarious experience. Just as Sacha Baron Cohen immersed himself in his comic creation Ali G – the ‘gangster from Staines’ who mocked his guests and their desperation to come across well to the public by inducing them to agree to his own shocking or ridiculous views – so Carstens takes the role of Head of the Bank of International Settlements (BIS) to a new level of post-ironic satire.

 

Carstens is simply superb as the “Head of the BIS”… His figure is larger-than-life, his demeanour entitled, his message strident, his tone increasingly desperate – his comic creation faultless.’

– Cassius (writer and entertainment critic)

 

During the course of his ‘presentations’ – delivered to journalists and groups of notable figures from the world of finance and economics – Carstens never once slips out of character, as he harangues the world beyond the cameras about the dangers of digital money and the new economic paradigms it represents. In doing so, he poses the wickedly funny question to the nascent industry he addresses: ‘How dare you try to muscle in on the profits of injustice the banks have monopolised for a hundred years?’

 

Take this excerpt of one of his most recent interviews, given to the journalist of a major Basel news outlet (the journalist, naturally, is unaware of the comedic nature of Carstens’ endeavour, tacitly accepting the existence of the fictional BIS and thereby flaunting his ignorance of the global economics it is his job to cover). ‘My message to young people would be: Stop trying to create money! … Young people should use their many talents and skills for innovation, not reinventing money. It’s a fallacy to think money can be created from nothing.’

 

With a nod to South Park’s Mr Mackey (‘Crypto is bad, mkay?’), Carstens pleads with the youth of today to give up their naive ways of creating money from nothing. And, like Mr Mackey, who ignores his own classroom diatribe and plunges himself into a lifestyle of drug-taking, Carstens smoothly glosses over the hypocrisy of the world’s central banks, for whom he is the central figure. With the effects of the Global Financial Crisis still undermining the prosperity of ordinary people – and precisely the younger generation he lectures bearing the brunt of the pain they are innocent of causing – the head of the BIS knows better than anyone that central banks have hardly acquitted themselves well. But ‘Central banks are trusted,’ he comments – his composure never once faltering with so much as a smirk at the irony.

 

It is this incisive, biting wit framed by his utterly convincing delivery that makes Carstens the rising star he is and the comedy great he is destined to become. From his evident depth of knowledge of economics (from which he naturally cherry-picks only the most convenient facts for his message) to his imposing physical presence and image as the stereotypical bankster, his commitment to his character is absolute.

 

Agustin, we salute you!

 

You can read more about Europe’s #1 financial comedian on Carstens’ website, at https://www.bis.org/author/agustin_carstens.htm.

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Inferno review: Blockfolio

This app allows you to track the value of your crypto portfolio easily. It includes all major cryptos and has real-time, accurate price feeds. Be warned, though, it’s dangerously addictive.

 

If you’re a crypto investor with several different coins in your portfolio – or potentially dozens – then you’ll need a way to track their value. There are various different apps that allow an at-a-glance overview of your current crypto net worth. Some are fine, some clunky or hard to use. Some only have a decent web interface. Some work ok but the price feeds are drawn from limited exchanges, so they miss out certain cryptos or offer distorted valuations.

 

There’s a reason Blockfolio is a market leader. It manages to provide a user experience that is (generally) slick and intuitive, while providing accurate price feeds for a massive range of crypto coins and tokens.

 

There are iOS and Android versions and it’s free to download. Getting started is easy, though there’s just one minor UX hurdle that needs a moment or two to figure out. Adding coins is simple, but sometimes the app is just a little bit too clever for its own good. It’s designed to allow you to reallocate assets within your portfolio – e.g. sell LTC for BTC – and track valuation up to and from the time of the exchange. If you’re using it for that purpose, fine, but if you just want a summary of your portfolio it’s a bit much. You can simply edit coin entries directly, but you’ll need to swipe right to the ‘Holdings’ menu and change it there, rather than alter it on the main screen for that entry in your portfolio.

 

But in general, this is by far the best and easiest way to keep up to date with the crypto markets and how they affect you. You can also access news, receive price signals and get alerts for specific events.

 

Be warned, though: in critical market conditions you’re likely to find yourself checking the app multiple times per day. It can get dangerously obsessive. You’ve been warned.

Find out more at https://blockfolio.com/.

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Bitcoin dominance is a metric of crypto failure, not success

Bitcoin dominance – the proportion of total crypto market cap occupied by bitcoin – has hit 50% again.

It’s the first time bitcoin dominance has been above 50% in 2018. The last time it was above 50% was December 2017. However, back at the beginning of 2017, BTC dominance was around 85%. It had rarely dipped below 80% in the whole history of crypto.

Bitcoin maximalists love to talk about BTC dominance. The thinking goes that bitcoin is best, and every use case for alts can and should move to bitcoin in one way or another. Thus ‘dominance’ is the best metric for the success of bitcoin: for bitcoin to succeed, everything else must fail.

 

This is a ridiculous viewpoint, for more than one reason.

  1. It’s classic zero-sum thinking. Crypto isn’t competing against crypto, it’s competing against fiat.
  2. Bitcoin can still be incredibly useful and important – and 100 times its current market cap – and still have less than 50% overall market share, or even 10%.
  3. As the number of altcoins increases, and the number of crypto tokens used by businesses for many and various purposes, the market cap of non-bitcoin crypto will inevitably increase. A million tiny but genuinely useful projects with $1 million valuation is a trillion dollars. None of these threaten bitcoin. Collectively, they don’t indicate bitcoin is less valuable either.
  4. These ‘alts’ include tokens like Tether, TrueUSD and other fiat-backed cryptos that add to market cap but don’t compete with bitcoin. As the ecosystem grows, so will the proportion of market cap occupied by stablecoins. That actually reflects demand for bitcoin, while reducing dominance.
  5. Blockchain applications and tokens do a lot of different things. A LOT. They’re not all money, or a store of value – digital gold – like bitcoin. They don’t compete for bitcoin’s #1 use case.

A higher rate of bitcoin dominance isn’t a sign of health in the overall crypto world, or a sign of the success of crypto. Higher dominance indicates less confidence in crypto as a whole, with traders exiting initiatives that might drive forward blockchain adoption. It’s akin to the market deciding that mobile communication doesn’t have much of a future, that innovation isn’t necessary or desirable, and piling into Apple shares because they have one major product that does happen to generate revenues.

 

In the future, the best case scenario would be for bitcoin to be the largest crypto – by some significant multiple, whether that’s 10x or 100x – but to occupy far less than 50% of overall market cap.

 

TL;DR Dominance is a terrible metric of success. Ratio of #1:#2 crypto is a better one.

 

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Bitmain IPO: go leveraged long popcorn

So here’s the situation in a nutshell.

Bitmain designs crypto mining chips and runs the largest mining pool in the world, Antpool. It’s a privately held company run by CEO Jihan Wu, who has carved out a reputation for himself as a vocal supporter of Bitcoin Cash, which made a failed land-grab on the Bitcoin brand name with a very public fork last year.

Bitmain holds somewhere in the region of a billion dollars worth of BCH. It has been accumulating BCH all year, mining hard and selling its BTC holdings, buying BCH and propping up the price of the currency in the process.

The company is making a massive bet on BCH. Problem is, the bear market has stuck around a lot longer than planned. The reserves they’ve built up have been dwindling in dollar value as all crypto slides against fiat.

The thing is, BCH is illiquid. The market cannot support the kind of sell volumes that BTC can. So if you’re holding a lot of BCH — say, somewhere in the region of a billion dollars worth — you’ve got a problem. Because you don’t hold a billion dollars worth. Selling any significant amount is going to crash the price and leave you with pennies on the dollar. And that is what in financial jargon is known as a ‘bummer’.

So what do you do when you’re stuck with crypto worth a billion dollars on paper, that’s losing value all the time but that you can’t sell on any exchange?

Yep, that’s it. OTC. Specifically, a special kind of OTC trade known as an IPO or, more accurately, ‘exit scam’. This involves selling the whole lot off to investors in a massive public offering, passing the bag onto unsuspecting guys who’ve heard crypto is going places but don’t understand that BCH is fighting a losing war with gravity.

All of Bitmain’s BCH — almost 6% of outstanding supply — will be sold to investors in an $18 billion offering. IPO documents suggest that this BCH accounts for around 70% of the company’s $1.2 billion valuation. Propping up the currency, which certainly doesn’t see a lot of organic use, would help inflate that price tag.

Emphasise the good, hide the bad. Like the almost-certainly mediocre Q2 earnings that didn’t make it into the IPO document.

All is not what it seems with Bitmain. And the crypto community is going to be needing a whole lot of popcorn as the truth becomes clear.

Take a look at here for more details.

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Inferno Analysis: Incent

TL;DR Low prices coincide with imminent launch and merchant adoption on this mainstream but seemingly little-known crypto project.

Introduction

Incent is a blockchain loyalty currency that exists as a token on the Waves platform. It’s designed to plug mainstream shoppers into crypto by sending them tokens as a reward whenever they make a purchase. They can also spend Incent with partnering stores. Unlike normal loyalty points, which are printed by companies like fiat money, there is a fixed supply of Incent and they are bought and sold off the open market whenever they are distributed or redeemed. Incent has been around for 18 months now, but is just about to go live with its first real-world partners.

 Disclaimer

Crypto investment is risky and the markets can be highly volatile. Do your own due diligence before buying. No responsibility is accepted for investment decisions made on the basis of this analysis.

Background

Incent held its crowdfund in October-November 2016, raising a little over $1 million in BTC and WAVES (though the value of any crypto holdings will have risen enormously since then thanks to the bull market). Few existing loyalty schemes work, because they offer poor value for users. Incent’s idea was to create a completely new kind of loyalty currency that customers would actually take the trouble to earn and use, and that would genuinely incentivise repeat business for merchants.

The key feature of Incent is that it’s a blockchain token with a fixed supply of 46 million. Unlike normal loyalty points, you can give it away to other people or sell it easily on the open market. Whenever customers spend money and receive Incent as a reward, a small proportion of the money they pay the store is actually used to buy Incent off the open market – leading to growing demand. (When customers pay with Incent, it’s sold on the open market.) As a deflationary currency, it should have a bright future – it only takes demand to slightly outpace supply, or a few coins to be lost or forgotten here or there, for the value to rise.

Incent enjoyed some interest last year as volumes rose and the price peaked at $1; it’s now trading at about a fifth of that. Incent currently changes hands on Bittrex for around $0.20, though it recently dipped below $0.17 and seems to be heading upwards. You can also find it on the Waves DEX, with INCNT-WAVES being the most liquid pair.

 

Existing features

  • Incent already has a toolbar, which you can download in the form of a Chrome extension. This rewards you small amounts of Incent just for browsing the web. The toolbar is a kind of proof-of-concept that was launched to refine the software and gain initial users, and will likely be decommissioned in the future.
  • There’s also an existing marketplace, where you can shop with hundreds of affiliate merchants. Each one offers you a rebate in Incent when you buy something – typically between 5 and 10% of your spend.
  • Incent you earn on the platform is held in a hosted wallet – you’ll need to sign up and create an account to use the toolbar and marketplace, a lot like using an exchange. This means new ‘Joe public’ users won’t have to worry about downloading crypto clients and managing their keys.
  • Incent can also be held in an external Waves wallet (you can download this from www.WavesPlatform.com, or use the web wallet at https://beta.wavesplatform.com/.
  • You can send Incent instantly and for free to anyone within the platform, or withdraw your tokens to a Waves wallet (or exchange) for a small fee.

 

Upcoming features

  • Integration with the first stores will happen at the end of July. These are small independent shops and restaurants in Sydney. (There will apparently be around 15 to start with.)
  • In November, Incent will be integrated with a number of larger Australian brands. There is currently no concrete information about which companies they will partner with.

Strengths

  • Working software already available.
  • Marketplace is easy to use, with a good UX.
  • Makes it very simple to acquire crypto for newcomers.
  • Imminent date for business integration (around 1 month from now).
  • Mainstream target market, not crypto world, so value is at least partly disconnected from crypto market cycles.

Weaknesses

  • The default hosted wallet won’t win over crypto purists, though it’s the only reasonable solution to attract mainstream users.
  • The project has been around for over 18 months now, and the development lead time means it has sunk out of view in the wider Waves and crypto community. Whilst this offers bargains to new investors just before launch, it means momentum will need to be generated to show up against the background of a crypto scene that is far noisier than it was a year ago.

Conclusion

Incent is another one of those projects where the stars align: working software with a good UX, interesting idea with a large potential market, imminent launch, and a low price, meaning high potential ROI. If it does what it set out to do, things will be very different in a few months.

There’s a long, long road between ICO and market launch, and some crypto projects never make it that far – either running out of fuel or crashing and burning along the way. Incent is basically pulling into the car park at its destination. For all that, launch should be considered the beginning of the journey, not the end, and given the uncertainties of the crypto world there’s no telling what will happen next. But we do think it’s an exciting opportunity and about as solid a proposition as it’s possible to get in crypto.

One-year outlook: Very positive

Assessment

Like all altcoins, Incent was hit hard by the downtrend and fell further than most. Prices have just come off a local low, driven by the sharp BTC sell-off, potentially posing a golden opportunity. This happens to coincide with coming mainstream business integration, which should drive price higher as it increases organic demand. Later in the year, larger partnerships are expected. It’s reasonable to believe the impact of these will be at least partially priced in upon release of that news, though there ought to be a fundamental effect in the consistent increased demand over time, too.

Action:BUY

Approach

Time is of the essence here, since Incent already seems to have bottomed out and initial business integration is coming next month. Any announcements of partnerships may impact price positively – but conversely, in the thinly-traded market it occupies, even modest sells can cause a significant fall in value. One strategy is to buy early with funds you’re happy to allocate, and sell some on the way up. If you are not happy with the risk posed by this poor liquidity, a series of smaller buys over time may prove safer. Alternatively, you can still earn a few Incent a day by using the toolbar, and purchases on the marketplace come with Incent cashback.

 

For more information, visit www.IncentLoyalty.com. There is also a Telegram channel: https://t.co/wRSqTNkGh9.

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