Ethereum

Apr 27 2017

ETF News: Ethereum, or Bitcoin, or Both?

The cryptocurrency chatrooms and websites were abuzz yesterday with a double whammy of potentially good news: the SEC (the US Securities and Exchange Commission) was considering two separate exchange-traded fund (ETF) applications, one for Ether (Ethereum) and one for Bitcoin.

You can read more about it – and you may want to bookmark these sites, too – as other sites that cover the space were discussing the implications for the crypto community, blockchain developers, and traders as well:

Zero Hedge on the Ethereum (ETH) price surge
Coin Telegraph on the possibilities for both ETH and Bitcoin (BTC)
Coin Desk says the original ETH ETF application was filed in July 2016.

What happened last time?

Funny how the crypto space moves lightning fast. While it may seem like “way back when” that the SEC ruled against the Bitcoin ETF, it was actually only on March 10, 2017. That’s not quite seven weeks ago.

The price of Bitcoin did some crazy things in the weeks leading up to the announcement (“buy the rumor, sell the news,” though the rumor was that there was a chance of it being approved), then saw a precipitous drop once the news was announced.

Coidesk Chart — Thanks, Coindesk. March 1 through March 13, 2017 BTC price.

Reading the trading tea leaves

You don’t have to be a wizard to see that this type of rumor – and the subsequent news – can drive prices north. Here’s a 24-hour chart (from Poloniex) detailing what’s up with ETH:

Bitcoin has moved up, too – though not at a double-digit rate over the past day – and now trades on Poloniex at a shade above $1400. (This, too, can change in an instant.)

These things take time, though: rumors of a BTC ETF were rampant for months before the announcement, and you would expect the SEC to take its time on the ETH ruling. (You can also read the SEC’s document, from January 13, here: SEC notice.)

Long-term implications

Really, price speculations in any market are nothing new. For every cry of “bubble,” there’s someone else with a lofty prediction that might seem preposterous.

And the Bitcoin and Ether markets really aren’t any different in that regard to the gold market: Warren Buffett supposedly hates gold, while speculator Doug Casey thinks gold could double this year.

Of course, we’ll be watching this very closely. Our bet, though, is that FOMO will win big once either, or both, ETFs get approved. The flow of legitimate capital into a market that is perceived to be part of the underground is just the beginning.

Apr 26 2017

BRED or ICO – Which Path?

We’re tooting our own horn…just a little.

If you have followed this site for the past month (and THANK YOU for doing so), you know that we have been talking about two sides of the “coin” when it comes to cryptocurrency. One the one side, the big behemoths, led by Bitcoin, which soared to north of $1400 US this morning. (NOTE: we realize there are some…issues? questions? with Tether and the USDT price on some sites. We’re going with Poloniex’s numbers from a little before noon Central time today.) On side two: the little guys, be they altcoins or ICOs.

AND YES…there are three sides to every coin, o wise one. Side three is the edge of the coin, where many of you might currently be. Reminder to get started with Coinbase, buy some Bitcoin or Ethereum, and get rolling! They’ll give you a bonus and we’ll get a bonus for referring you.

Back to the tooting of our horn: we believe we’re onto something with the BRED portfolio.

BRED is on a TEAR

When we first came up with the concept, we picked four of the coins with the highest market cap, but also four that could fall into different buckets. The same way that Facebook, Amazon, Netflix, and Google make up FANG – with each bringing a different dish to the table – Bitcoin, Ripple, Ethereum, and Dash all have something a little different about them:

Bitcoin – “first-mover advantage”
Ripple – “banks are using it”
Ethereum – “smart contract” (banks also using it)
Dash – “most consumer-friendly”

Simple enough, can fit this on a napkin. So we thought, let’s create a portfolio of just these four, give them 1/4 each of our investment, and leave it alone.

Here’s what it would look like right now:

Yes, you read that correctly. A $10,000 investment, spread equally between these four coins, made on January 1, would be worth more than $51,995.12 today.

Oh, and if you sat on the edge of the coin and waited until April 1 to buy, you’d still be up 22% THIS MONTH.

But what if you’re waiting for an ICO?

Some ICOs Had INSANE Weeks

While some of this could be the start of a bubble – and our pal Roger Aitken talks about that in this post on GNO – ICOs are on a tear, too. Well, some of them…

GNO set records, rising to a valuation of $300m
TaaS has raised $6.1m US, all of it outside of the US
MobileGo has raised more than $6m in its first week
Exscudo* stumbled a little on day one, but is nearing the $1m mark in only its second day.

* We are participating in Exscudo’s “bounty program” and have purchased a small stake. Also, we wrote about it in more detail over here.

What’s the Takeaway?

If you think things are just getting going, you may very well be right. Bitcoin’s market cap is above $20b, but, with fixed supply and companies still scrambling to get involved in blockchain technology, the four members of the BRED portfolio seem to be hitting the gas pedal.

And these four ICOs, each with their own different angle and spin, could also be poised to make serious news of their own – I mean, in addition to the news they’ve made already.

BRED or ICO?

What about both?

Apr 25 2017

Using Coinbase – A Primer for Bitcoin Newbies

We’re going back to basics today. And we thought we’d use this opportunity to share our Coinbase link – so, in the interest of full disclosure, we could be compensated if you sign up with this link. But, once you spend $100 worth on Bitcoin or Ethereum, you’ll get $10 worth of Bitcoin, too. Win-win.

Basics: What is Coinbase?

Veterans of this space might be surprised when they realize that Coinbase has been around since June 2012. Here’s how they describe themselves.

Founded in June of 2012, Coinbase is a digital currency wallet and platform where merchants and consumers can transact with new digital currencies like Bitcoin and Ethereum. We’re based in San Francisco, California.

And, oh my goodness do they have a foothold on this digital wallet space, having raised more than $117m from leading tech investors and venture capital firms. You can see a complete writeup on Crunchbase, one of our favorite tech info sites.

What’s a Wallet?

It might seem obvious, but it’s worth a mention nonetheless: a wallet is where you store your coins. Read this from Coindesk if you’re looking for more advanced info, but, for now, just think of the basic idea as an old school wallet, like the one you’d put in your pants pocket or purse.

In the typical American wallet, you’re likely to find cash – FIAT CURRENCY! – identification, and maybe some credit cards. Some of what’s in a physical wallet is innocuous, right? I mean, everyone holds onto a fortune from their last trip to the Chinese restaurant, don’t they? But it’s that other information that you guard carefully – your ID card is a pain to lose, and you wouldn’t just give out your credit card number or the CVC code on the back to any random stranger.

Your digital wallet can be looked at the same way – in fact, some of the information that moves Bitcoin (or Ethererum, we’ll use Bitcoin throughout this article as a catch-all for the digital currencies on the Coinbase system) back and forth is better thought of as in a safety deposit box or a safe.

The public component to your wallet is the Bitcoin address, and this is something you can give out to anyone and everyone. This is INBOUND. You can use it as a tip jar, you can ask your Uncle to send you that five bucks worth of Bitcoin he promised for your birthday (ha!).

Here’s our Bitcoin address:

1G8Ayc15sqoyGzN4DFUeheRkgFeS9t6oSW

And our Ethereum address:

0xf0940C79d93E88450aA366238ef8C298Da11EB74

Note that those two look different. Because they’re completely different languages and sets of code.

Adding to your account

Here’s where the FIAT CURRENCY comes in: you’ll need to send money to your account using one of a couple methods. One is to link a bank account, and then your Bitcoin will appear in a few days, once the banking systems talk to each other and confirm your account. The other method is to use a credit card. There’s a fee attached – as there is to the bank account method – but the upside is that your Bitcoin will appear almost instantaneously.

Using Coinbase as your “hub”

If you’re brand new to Bitcoin, you can totally use Coinbase as your online hub, your gateway to the vast world of cryptocurrency. As you see above, you can get the current price quote, you can buy and sell – trade – your Bitcoin, you can send Bitcoin to folks you owe money to, and request it from folks who owe you money.

Here’s a snapshot of some of our recent activity.

But, as you might have guessed from some of our other posts here, this is only scratching the surface of our cryptocurrency activity. You can use your account to send money into one of the trading platforms, like Poloniex or Bittrex – two of the ones we use. Or you can invest in an ICO, such as the Exscudo or Sikoba coin offerings we have talked about here.

Only Two Coins?

Despite what the rumor mill might tell you, right now only two coins are on the Coinbase platform: Bitcoin and Ethereum. So if you want to get into other coins, you’ll have to convert them via a trading platform (or an ICO; Gnosis used Ethereum tokens yesterday to raise a crazy amount of capital in their auction). But that’s pretty simple to do.

Pretty simple, right?

Yes, the fine folks at Coinbase have actually made this dummy-proof. Which is one reason they’ve raised so much capital and they’re the wallet of choice here. (It’s not just from that link up there that can score you a Bitcoin bonus with a qualifying purchase, and will also score us a Bitcoin bonus with your qualifying purchase. There’s that “win/win” again.)

Other Coinbase developments

This was mentioned by leading VC Fred Wilson the other day, and, given the growth of Ethereum as the backbone of blockchain applications, it’s probably worth checking out. Token launch from Coinbase.

Last month, we covered the GDAX launch from Coinbase – it’s an important institutional investment milestone for the company.

We’ll keep an eye out for other coins added to the Coinbase site, too.

Apr 07 2017

Quadruple Your Money with the BRED Portfolio

When we stumbled upon this idea this morning, our first instinct was to play it rather cool with the headline. Something like “Introducing the BRED Portfolio: A Buy-and-Hold Bitcoin and Altcoin Investment Strategy.” And that sounds very straightforward, by the book. It’s also boring.

So we went with the clickbait headline.

Read on:

Why “BRED”?

There are a couple reasons behind this one – and it’s not just because these four letters fit together nicely. (They do, though. Props to us.)

Think about one of the best business and investment acronyms out there: FANG. Jim Cramer claims to have created the acronym several years ago, used to put four “new economy” stocks into one nice bucket. Facebook. Amazon. Netflix. Google.

It’s easy to remember, but it also includes four really solid tech stocks – and four companies that are, you could argue, doing quite a bit differently while still being in the same category.

We thought the same thing when creating this portfolio strategy: let’s get four of the biggest cryptocurrencies out there and put them in one bucket.

BUT, let’s do this with an eye toward the ones that have the best chance of long-term staying power.

While “BRED” works nicely as an acronym, these are also four coins that have managed to stick around in the crypto space.

We’re not just rationalizing…

B is for Bitcoin, and you couldn’t have a portfolio like this without Bitcoin, since it started this whole shebang, right?

R is for Ripple – which, for some reason, doesn’t have a ticker symbol that starts with “R” – and Ripple’s USDT price developments of late don’t tell the whole story; consider it the best chance of becoming the backbone of all crypto transactions throughout the world.

E is for Ethereum, whose “smart contracts” were, you could argue, the first yin to Bitcoin’s yang.

D is for Dash – “digital cash” is a very easy and consumer-friendly value proposition. We will argue that this one could win out based on the strength of its community alone.

Look at the rankings, though – if you visit Smith and Crown this morning, you’ll see that these are four of the five largest cryptocurrencies – in terms of market capitalization – in the world. In fact, going back to January 1, you would still have been picking four of the 7 largest cryptos, as shown in this chart from CoinMarketCap.com.

Argue with us if you’d like, but we’re going with this acronym. You’ll see why in a second.

Structuring the BRED Portfolio

To keep it simple, we used January 1, 2017 as our starting point. And, as opposed to weighting the portfolio by market cap – which would have had Bitcoin at about 92% of the portfolio, defeating the purpose – we went with a straight 25% invested in each.

To get the prices, we grabbed a chart from TradingView.com – our first-ever visit to the site, which is bloody easy to use, we might add – and use their figures for open price on January 1.

TradingView BRED Chart — Thanks, https://tradingview.com

So there we are, a simple portfolio with four of the biggest crypto assets. But…how did it perform?

Quadruple. Your. Money.

What will remain to be seen here is whether or not this is an aberration – past performance not indicative of future results and all that.

But holy buckets this thing is on fire.

$10,000 invested equally on January 1 in four cryptocurrencies – Bitcoin, Ripple, Ethereum, and Dash – would have grown to $42,567.69 on April 1.

So…Now What, Smart Guy?

Yes, hindsight is 20/20. Looking back, the woulda-shoulda-coulda factor with the coins that aren’t named Bitcoin is pretty huge. And the volatility is such that today’s number on the BRED portfolio is more like $44,000 – and that’s due in part to the Ripple developments over the weekend.

But here’s our take – and we’re not investment professionals, nor do we provide legal advice – on what to do with this information:

Buy and hold. It doesn’t have to be these four cryptocurrencies, but you should consider having a few coins or tokens that you simply leave alone. Don’t trade them, keep them in cold storage, and worry about them only a little.