ICO

Sep 04 2017

‘This Bloodbath is Your Next Opportunity’

Thus began an email that arrived – as if on cue – about an hour ago. It doesn’t quite matter that they were talking about a completely different subject; it was from one of the scores of services I subscribe to and it is so a propos to what has gone on this morning.

Prices of Bitcoin, Ethereum Drop…

But why?

Just last week, I was mentioning on Steemit that I saw a real possibility for Bitcoin to hit $5000 and Ethereum to hit $400 (again, it was already there once) by the end of Labor Day weekend. It seems, though, that China had other ideas.

China Says NO to the ICO

This is not totally surprising – China rumors have been out there for a few weeks, and what looked like a coming crackdown at the beginning of the weekend turned into an actual crackdown early this morning, as Chinese regulators – SEVEN OF THEM – said that ICOs were, in fact, illegal under Chinese law.

We can’t explain it as well as Coindesk can, so go check out their article.

This impacted Bitcoin because it’s the main currency that lots of people use, or are chasing, or have as the basis of their portfolio.

This impacted Ethereum because it seems to underpin the vast majority of ICOs and “token sales” – so of course it would drop.

This Will Impact Your Portfolio…

Just how much it will impact your portfolio remains to be seen, and depends upon how much China exposure you have, too.

For instance, one of our favorite new exchanges is Binance, and its BNB coin/token powers the exchange. BNB has been on a little bit of a roller coaster, and our own holdings have gone from 19,000 Satoshis up to 60,000 Satoshis (and then some) then back down into the 12K range today, before trading at 21,000 or so as we write this.

SIDEBAR: Here’s a REFERRAL LINK to a new exchange coming called Altcoin Exchange. Worth checking out, as you can potentially share in the trading fees if you refer enough users.

We’re prepared to weather this particular storm, but you may not be so inclined.

What About Other Altcoins?

Pick your poison: every coin on Poloniex’s list is down…except for BURST.

It might look like a bloodbath – and maybe it IS a bloodbath – but now we’re back to the point of this article…

This could be that buying opportunity you’ve been waiting for.

Ripple? 4685 Sats. (“Sats” is short for “Satoshis,” in case you’re wondering. And a “Satoshi is .00000001 Bitcoin.)

Digibyte? 420 Sats.

Bitshares? 2725 Sats.

It’s possible – possible, but Do Your Own Research – that these coins could be in ranges that they may not be in ever again. If you read up on each project and spend enough time on the forums, you could possibly convince yourself that any one of these coins might be poised for a rebound, and taking off for heights unknown.

Place Your Bets (and Hedge Them)

We have, since day one here, advocated spreading your risk around. It’s one of the reasons that we recommend the Passive Income Platforms like Bitconnect (AFFILIATE LINK over there) and Control Finance (another AFFILIATE LINK).

It’s also why we recommend having your coins on several exchanges if you’re trading, and storing them somewhere like a Trezor (AFFILIATE LINK) or in another cold storage solution if you aren’t.

AND it’s why, once you get started (usually with Coinbase – hey, whaddya know, another AFFILIATE LINK over there!), it’s never a bad idea to have your holdings spread out between multiple coins with multiple uses. (It could be one reason why the BRED Porftolio has done so well this year: four different coins, each with four different use cases.)

Is THIS the Buying Opportunity YOU Were Waiting For?

It could be. In any event, if you’re looking for a time to get off the sidelines and into the action, this might be that time.

Jul 13 2017

DIY: Your Bitcoin Hedge Fund

It’s time to update our Bitcoin Hedge Fund, which we told you about back in May. Before we do that, though, this reminder: we DO have a Facebook page, we ARE on Twitter, and we’ve been spending a ton of time over on Steemit. We’d love to have you join in on the conversation in any or all of the three.

And away we go…

Hedge Fund Background

First of all, the typical standard disclaimer: do your own research. We’re not responsible for gains or losses. Get legal, tax, and accounting advice. Don’t invest more than you can lose. These are volatile-as-f markets, y’all. Really volatile, especially the past several days, where there was at least a little bloodletting and panic.

Anyway, our original post said we’d park a small amount – in our hypothetical fund, we chose a guy named “Herbie” and his hedge fund (“Herbie’s Hedge Fund”) had $10,000 to invest. We chose this amount as ten percent of his investment capital. Is that a good amount? A bad amount? Too high? Too low?

Heck, that’s for you to decide. If you’re Wences Cesares, you’d put 1% of your net worth in Bitcoin and leave it there for several years. That may turn out to be good advice, or it may turn out to completely fizzle.

What We Started With

Our hedge fund had a nice mix of established coins – the BRED portfolio, of course – as well as some emerging coins and a recent ICO. Here’s what it looked like then:

If you have more than a passing understanding of the markets we’re in, you might think every one of those coins has gone up since May 1. And you’d be almost 100% right: using today’s prices, grabbed from CoinMarketCap.com, here’s what you’d have:

Some notes on what we see here:

Bitcoin: Holding Steady

Bitcoin is doing well enough, and it started as 30% of the portfolio – for reasons detailed in May, but, if it’s becoming the reserve cryptocurrency, then yeah, you want a good chunk of it.

What will be interesting, though, is where it goes in the next 20 days or so. Hard Fork, Soft Fork, stuff that even we admit we’re paying attention to but not studying THAT closely – the August 1 deadline date for Segwit-related movement on the part of the BTC-hemoth will mean movement in price not only of BTC, but perhaps of others in the BRED portfolio…and LTC, too.

Timing on LTC, DGB, XRP: Not Bad!

From the “blind squirrel” department, all three have done well. Litecoin was, indeed, a defensive play – you could argue that it belonged in our BRED portfolio – some folks have told us so – but it’s (in our eyes) a bit like Bitcoin and a bit like Dash. But it’s also seen as a Bitcoin alternative, so that’s why it’s here. And it has nearly doubled in the past five weeks.

And some of our success is a little bit of luck – we thought we could be too late to get into Ripple’s XRP token, but it turns out that quadrupled for us.

Digibyte went on a tear, then pulled back and is now back down to Earth – if Earth is an 11x growth in its price.

And, About Our Laggard

Win some, lose some. WeTrust is still a good product/coin/token/system/platform. And we’ll keep it here because we do think that it has tremendous potential.

But two things do jump out at us here at Metacoin HQ:

We picked the wrong ICO.
We are also missing out on a number of these ICOs because we’re in the USA.

A Word on ICOs

Initial Coin Offerings used to be all the rage a couple weeks ago. Then Ethereum pulled back and cries of bubble were everywhere.

THEY’RE BACK.

Tezos $XTZ pic.twitter.com/zswITrHUiY

— BambouClub (@BambouClub) July 13, 2017

That’s one we missed out on entirely because we’re in the USA and these will not let Americans get involved. You have to wait until they are traded on an exchange…

That could actually be a good thing – if an ICO is oversold, overblown, and overhyped, it will more than likely fizzle once it hits the markets, creating a buying opportunity for mere mortals, er, Americans.

But, and this is a message for Congress as they look at tax reform, and maybe, too, a message for the SEC: as long as there’s a ton of caveat emptor attached, what really *IS* the problem with these ICOs being open to American investors? How are they any different from, say, my deciding that Blue Apron is awesome and I want to bet my IRA on the Blue Apron IPO?

Food for thought.

Two More Things

One – our hedge fund actually looks a bit different today than it did on July 1.

Yeah, $7,000 down since July 1. This is why we updated the numbers on July 13 – it’s a more accurate picture of what’s happened over the past 12 days.

Two – your own hedge fund. We told you before that this is a hypothetical experiment and you can use this as a guide for creating your own. However, we like the basic principles here: some big coins, some smaller coins, maybe an ICO or post-ICO coin or token or two. The general idea, as always, with a hedge fund is that you want to hedge your bets.

Overall markets – stocks, bonds, mutual funds, precious metals, pork bellies – those could tank tomorrow, or explode tomorrow, or trudge along. If you have all of your eggs in one basket, you’re likely going to have trouble someday. And if you have all of eggs in the wrong basket, that could spell trouble, too.

Love to hear your ideas! Tell us on Twitter, or in the comments below.

Oh, if you HAVEN’T gotten some coins to get started, pop on over to Coinbase, use this Affiliate Link, and you’ll get a Bitcoin Bonus with a qualifying purchase.

Jun 23 2017

Anatomy of an Overhyped ICO

EDITOR’S NOTE: June 23 – 2:51 pm – It has been pointed out by a kind soul that original investors of the ICO could have bought at 0.01 ETH – meaning a price of around $3.20 per Bancor token. Thus, even though Coinmarketcap.com lists a price for a week of around $20 per coin, the ICO investors are still in good shape.

The original premise, though, is one I’ll stick with – lockup might do some of these overhyped ICOs a bit of good.

The rest of the text remains unchanged.

If you’ve been watching this space for more than a few weeks, you know that there’s a good chunk of “froth” in the ICO (Initial Coin Offering) market. That froth was on display recently – JUST LAST WEEK – when Bancor launched its ICO and sold some crazy amount of Ethereum in a matter of moments. Read more here from NewsBTC.

And if you’ve been around the financial world for any amount of time, you know how IPOs (Initial Public Offerings) work – a heck of a lot differently, and the pricing is almost always done in a matter that, while shutting out the little guy initially, enables the price to be somewhat stable over the short- and medium-term.

Well, as of this morning, Bancor is back in the news – and it’s not for a good reason. Their tokens are already trading on the open market – and here’s a screenshot from Bittrex that might scare the heck out of you.

We’ve Entered New Territory

That’s right – we have now gone where no token has gone before – from the biggest ICO ever to the most precipitous drop in recent memory.

If you judge market cap based on ICO value alone, i.e. they raised $153m, and their price when they “went public” was $20/token, that means 7.65 million tokens in the ICO (pardon my math, I know there are a lot more variables here, such as how many coins are held by the company, locked up, used to stabilize the network, etc.).

This would also mean that the ICO value went from $153m to roughly $30.6m – given the price of $4.20 a share that CoinMarketCap.com has it trading at.

No matter how you slice it – this is not good for Bancor.

Why Lockup is So Vital

If you’ve ever been part of an IPO, you know there are tons of rules in place governing the sales of shares. In an IPO, there’s always a quiet period before shares are sold. Investment banks and market makers negotiate behind the scenes to ensure that the price and number of shares will meet market demand just enough so that it’s not over- or under-subscribed.

Then, once the shares go live, those who hold them – from executives on down to rank-and-file employees – have their shares locked up. They can’t buy, sell, trade, or any of that for what is usually a 90-day period.

The goal is to encourage some stability in the marketplace: if an executive of a company that went public decided to cash in immediately, what would that say about the confidence the executive has in the company? What would that do to the stock price?

Lockup is the most vital tool in the ICO toolkit.

That’s right – are you better off raising $153 million and then seeing the value drop like a stone once it trades? Or raising, say, $30 million, holding the coins for 90 days, and weeding out those who are just looking to dump and get out for the quick buck?

What’s Next?

We’ll have to watch the market and see what happens to Bancor. Does it rebound? Do tokenholders revolt? Is this the one that causes the SEC to weigh in on this new way of raising capital?

In any event, food for thought – overhype your ICO, then don’t lock up the tokens, and you might have a recipe for disaster.

Jun 13 2017

3 Ways to Make it a Summer of Crypto

It’s not even Summer yet. We’re a week or so away – I never remember the exact date and it seems to change each year anyway, so let’s just say “a week or so” – and, if the activity in a few sub-genres of Bitcoin, the Blockchain, and Cryptocurrencies are any indication…

It’s going to be a Summer of Crypto.

Since we need to do a list to make this go viral, but we also want to get outside and enjoy the weather, let us give you three things you need to know…

3 Ways to Make it a Summer of Crypto

1. Follow the (ICO) (Token Launch) Money

Alan Greenspan would have called this market “frothy.” ICOs – “Initial Coin Offerings,” a/k/a “token launches” – have all of the excitement of the dot-com era IPO days, with none of the cocktail-napkin business plans.

Instead, business plans are replaced by teams of coders, programmers, and marketers taking advantage of the fact that ICOs don’t really need investment banks to get companies access to capital.

Yesterday’s ICO for Bancor set records: the equivalent of $150-plus million collected in record time (three hours) for a business that is in the process of launching, but isn’t fully there yet. No matter, VCs, iBanks, heck…anyone with a few (hundred) Ethereum tokens was all-in.

It’s actually a business that has a good chunk going for it; and it’s no surprise that their ICO was successful and that they seemed to be poised for success. Note that the

How to potentially profit?

Watch for new ICOs or their equivalent that – like Bancor – have an interesting story to tell, and a management team behind it with business success.

We especially like CivicKey – Vinny Lingham is one of the Influencers we have had our eye on, and his token launch aims to solve a real problem – managing and verifying online identities.

2. Hedge Your Bets on the Big Boys

Again, we’re not providing trading advice or investment advice; what we do suggest is that you keep tabs on the big players.

Ethereum hit $400 yesterday, then pulled back, now is back in the $350-375 level. It could be volatile – but it also could have more eyes on it and more money thrown its way since the Ethereum protocol/Ether token is used as the backbone for so many token launches.

And then there’s Bitcoin, which has still more than doubled YTD.

This reminds us – if you haven’t yet gone to Coinbase, go do that, use our AFFILIATE LINK, and get some crypto. Bitcoin. Ethereum. Litecoin. Make it happen. (You get a bonus with a qualifying purchase, and so do we, so it’s a win-win.)

How to potentially profit?

Gosh, people, you could just use the BRED Portfolio we’ve been tracking. It’s on fire – and the four coins don’t necessarily move in lockstep, serving as a bit of a hedge against market volatility.

Sortof. Be prepared for “BUBBLE” talk all summer, too. And don’t invest more than you are prepared to lose.

3. Be on the Lookout for Altcoins

“Altcoins” are those non-Bitcoin coins. (We used “coin” three times in that sentence.) Some have tiny market caps – heard of Ripto Bux? It’s been on our radar and currently trades in the 200-400 Satoshi range; market cap of $2 million or so – and others are meandering near the top 20, poised for a panther-like jump into the stratosphere.

OR poised to stay at a low level and not make much noise.

OR…

How to potentially profit?

We’ve shared plenty of ideas here. Plenty. We invite you to do your research and look at these coins and tokens, see if they are used in the wild, and see if there’s a reason for being. Are they solving a problem? Is there a good business case?

We can’t stress enough: do your research. If you want to take a flyer on the potential of a small altcoin with a tiny market cap, fine. Don’t be surprised if your risk capital goes down the toilet.

And even if you’re taking a chance on something in the $500-million market cap range, THAT COULD FIZZLE, TOO.

There they are: 3 Ways.

Get ready. For the #summerofcrypto.

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?