#DYOR, Crypto Thoughts, and Resource Links including to the SEC/ CFTC Chairman Statements
February 5, 2018
Bitcoin (BTC)– $6,871, Ethereum (ETH) — $695, Market Cap – $320B
If you recently purchased crypto assets, you’ve learned a few things about the crypto market and volatility over the last 45 days. The past month has seen Bitcoin move from $15,000 to under $6,900 or so today, and the trend is lower.
The overall crypto market cap has risen from $80B in July to a high of $650B in December, and now it’s under $320B (approx. 1,500 + Crypto Assets) in less than 45 days. The market is correcting, and it would not surprise me to see Bitcoin close as low as $4,000-$5,000 before we move higher.
My position has not changed, and I am taking the long view, with an outlook of 3–5 years that this asset class will see exceptional growth. I’ve included a few notes on my thoughts on #DYOR, the SEC/ CFTC Chair Letters, my Crypto picks, and a few random thoughts.
Do Your Own Research -#DYOR
#DYOR is exactly what it means. If you invest in the space, I’d highly recommend you research and learn about the underlying technology and the changing global regulatory landscape. If you are relatively new to Crypto, I’d suggest spending more time learning about the technology, as understanding the technology will help build your conviction for Digital Assets and Blockchain.
SEC/ CFTC convenes a special meeting on virtual currencies — February 6th
For ALL CRYPTO INVESTORS, I’d suggest you read BOTH of these documents below. Overall, the Chair’s recognize virtual currencies are here to stay, but more targeted regulation is coming:
SEC Chair:
https://www.banking.senate.gov/public/index.cfm/hearings?ID=D8EC44B1-F141-4778-A042-584E0F3B9D39
CFTC Chair:
Policy considerations (page 13)- “Do No Harm” policy for DLT, Virtual Currencies require more regulatory oversight in key areas.
If you invest in crypto, I’d recommend staying active on Twitter. I have a list of people to follow on my twitter feed that you may want to consider following:
The net is, Twitter helps me find various articles and viewpoints on regulation, global insight, and yes some of the crazies on Twitter.
I also follow the Bitcoin BEARS to keep perspective:
Peter Schiff, Paul Krugman, Nouriel Roubini, Robert Shiller, Warren Buffet and Jamie Dimon to name a few!
Perspective
From the CFTC Chair’s letter, perspective is critically important. As of the morning of February 5, the total value of all outstanding Bitcoin was about $130 billion based on a Bitcoin price of $7,700. The Bitcoin “market capitalization” is less than the stock market capitalization of a single “large cap” business, such as McDonalds (around $130 billion). The total value of all outstanding virtual currencies was about $365 billion. Because virtual currencies like Bitcoin are sometimes considered to be comparable to gold as an investment vehicle, it is important to recognize that the total value of all the gold in the world is estimated by the World Gold Council to be about $8 trillion which continues to dwarf the virtual currency market size. Clearly, the column inches of press attention to virtual currency far surpass its size and magnitude in today’s global economy.
Lessons Learns/ Thoughts on the downturn
The market has corrected to pre-Thanksgiving highs. As with any investment, I will add more discipline to my investing in Crypto, including building stronger cash positions when the markets reach 2–3x highs (or if we see another parabolic move). More to come in a future post.
My Crypto’s
As a long term investor, I’m taking the opportunity to add to core positions and will average in over the next several weeks and months. In my personal holdings, I own Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH) and EOS (EOS) for my core holdings. Think of Bitcoin Cash as a hedge to Bitcoin, and EOS as a hedge to Ethereum. In January, I also added NEO (NEO) and OMG (OmiseGo) to my core holdings which hold promising growth.
The following comments still apply. The Bitcoin community has two camps- Bitcoin and Bitcoin Cash. Some believe that only one will win, and I recommend diversifying across both to protect yourself. The net, I view Bitcoin as a “store of value” and Digital Gold. However, the transaction fees are too high to support being used a currency. Bitcoin Cash solves the problem and the primary holders of Bitcoin Cash are primarily aligned with the Asian markets and the large mining pools. I’m optimistic both will succeed, but there are no guarantees on who will win the battle.
NEO is a new addition, and it’s essentially Ethereum in China (and Asia). I have some concerns about China regulations, but overall it’s viewed highly regarded with an excellent management team, fairly low supply (100M maximum), and it pays a Dividend (Gas).
OmiseGO (OMG) is also a new addition, and OMG plans to offer businesses and users a mobile eWallet (electronic wallet) that will run on the OmiseGO decentralized exchange (DEX) by way of blockchain technology. Here’s a nice overview of OMG:
Finally, I’m also reviewing the tZero Whitepaper which is targeting the securitized token market. More regulation is coming, and tZero seems well positioned with a strong leadership team. The offering is open now to accredited investors and is scheduled to run through February 16, 2018.
https://www.youtube.com/watch?v=suhYcwXwV2o
Blockchain Videos
These are still two of my favorite YouTube video’s. There are a number of terrific Ted Talks that you can also find!
What is Blockchain (YouTube):
https://www.youtube.com/watch?v=93E_GzvpMA0
How Bitcoin Works Under the Hood (YouTube Technical)
https://www.youtube.com/watch?v=Lx9zgZCMqXE&t=612s
In conclusion, if you own crypto, I’d recommend reading the SEC and CFTC statements on their positions on regulating digital currencies! Very insightful, and I expect more change to come in the coming months.
As always, I am sharing information that is helpful to my friends and family. I am not a financial advisor, nor am I a long time bitcoiner…. please hack elsewhere! Continue to DYOR and hopefully things settle down over the next 30 days!
