Weekly Bulletin (Mar 24, 2019)

CoinSheet #249

One ought, every day at least, to hear a little song, read a good poem, see a fine picture and, if it were possible, speak a few reasonable words.

— Johann Wolfgang von Goethe (1749-1832)


Weekly Bulletin

Hello folks,

Hope you’ve all had a great week (if you didn’t, don’t worry, spring is upon us.)

Let’s jump into it.


Bitcoin Jack

Jack Dorsey took to twitter last week to let folks know that he wants to hire a few cryptocurrency engineers and a designer.

And to show people how to do open source the right way.

Contribute to bitcoin and get paid? Sounds nice.

The reason this got so much attention is that this message is coming from the CEO of Twitter and Square.

Another reason why the response is so positive is that Coinbase has taken a ton of flak in the past for building its business on the back of bitcoin, but doing seemingly little to help the project.

And it does seem like Jack and/or his PR folks have noticed this and are playing a position to their advantage.

I do think that Square is trying to capture more of the crypto market and will eventually be one of the more competitive players.

Will these hirings have a substantial effect on the bitcoin ecosystem?

Probably not.

Are these actions/tweets most likely there to collect brownie points and garner good press from the crypto community (especially the outspoken maximalists)?

Probably.

Does this mean the Jack doesn’t actually care about bitcoin? I wouldn’t go this far, but consider the following.

Jack told us in a CNBC interview that he spends $10k on bitcoin every week.

Jack has a net worth of around ~$5.3 billion.

Jack buying $520,000 worth of bitcoin per year is roughly equivalent to a person worth $100,000 spending $10 a year buying bitcoin (to be precise, about $9.81 5.3 billion / 100k = 53,000 and 520,000/53,000 = $9.81)

Now, I don’t have a billion dollars. But I definitely have more then $10 worth of bitcoin. And I’m pretty sure so do you.

With that said, almost every expense sounds unreasonably low when compared to that of a billionaire.

What was my point? I don’t remember. Just imagine I wrote something insightful here about perspective and playing angles to your advantage.


Japan on margin crypto trading

The cabinet on Friday approved draft amendments to Japan's financial instruments and payment services laws, which would cap leverage in virtual currency margin trading at two to four times initial deposits. The new limits are in line with standards are similar to those in foreign exchange trading.

…The rules are to go into force in April 2020. Margin cryptocurrency exchange operators would need to be registered within 18 months of that date.

Source


Bitmain to deploy 200,000 miners

Bitmain is planning to deploy 200,000 units of its own mining equipment in China to take advantage of cheap hydroelectric power this summer.

The equipment is conservatively estimated to cost $80 million, but it may be more profitable right now for Bitmain to mine crypto itself than try to sell all this inventory.

Source

Good timing.

There are estimates that this could increase bitcoin’s hashrate to 70 quintillion hashes per second (EH/s), above the network’s all-time-high of around 60 EH/s.


Recommended Readings

Cycles: Hard Times Create Strong Men

The first essay in a four-part series named "Cycles" during which we are going to examine the mechanics of growth. The main focus of our journey will be the exploration of a generalized philosophical framework, rooted in observable reality.

You can check out the article here.


Market Sentiment

The TD is interesting

In the beginning of the month I mentioned that now is a good time to pay attention to the TD Sequential.

The end of March is approaching and for the monthly candle to close as a red 8, we need to finish the month with a price below the close of the previous red 4 (around 3,970).

The reason this is interesting, is because we’re on a green 7 on the weekly candles.

So on the weekly chart this indicating a bearish move could happen within the next 2-3 weeks.

And on the monthly chart this is indicating a bullish move could happen within the next 2 months.


Bitcoin (Trend Overview)

Keeping an eye on these macro-trend lines (added the yellow trend line).


Bitcoin (Moving Averages)

Nothing particularly exciting here. Bitcoin is still coasting along the 10 EMA.


Bitcoin (Monthly Support/Resistance Levels)


Bitcoin (Weekly Support/Resistance Levels)


Bitcoin (2h Volume)


Bitcoin (Macro Overview)

Below are the 3 most common bottom scenarios.

  • Option 1: Fractals analysis bottom (2,300 - 2,600)

  • Option 2: Fib extension bottom (1,700 - 1,900)

  • Option 3: Retest support of 2017 rally bottom (900 - 1,200)

As of March 24, 2019 my confidence level are:

A bottom between 1,700 and 2,600 = about 70%.
We've already bottomed = about 29%.
Retest 900-1,200 = About 1% chance.


The end

What do you folks think?

Continue the discussion in our Telegram group.

That’s all for now.

See you later space Cowboy

-Dmitriy

Weekly Bulletin (Mar 17, 2019)

CoinSheet #248

Have patience! In time, even grass becomes milk.

— Chaudhary Charan Singh (1902-1987)


Weekly Bulletin

Hello folks,

Missed you guys last week, but don’t worry, you didn’t miss anything.

I kinda want to jump into a look at the market so here are some quick snippets of events/news I thought were interesting.

ETH isn’t a security

SEC Chairman Clayton confirmed Commission staff analysis that found Ethereum (and cryptos like it) are not securities.

Like, we already knew this. But that didn’t stop shit coins from pamping.

BIS statement on crypto stuff

The Basel Committee on Banking Supervision, a group of international banking authorities, has warned that the growth of cryptocurrencies poses a number of risks to banks and global financial stability.

You can read their letter here.

Tether

Tether has updated the terms on its website, saying that its dollar-pegged USDT stablecoin may not be backed 100 percent by fiat reserves.

My stance on this remains the same. Stable coins are stupid, Tether is boring and I don’t care about it.

Cosmos

Cosmos is a decentralized network of independent parallel blockchains, each powered by classical BFT consensus algorithms like Tendermint.

The first blockchain in the Cosmos Network is the Cosmos Hub, whose native token is the Atom. Cosmos is a permissionless network, meaning that anybody can build a blockchain on it.

TL;DR - It’s a new meme coin that wants to be Ethereum soo bad.

If you actually want to read more about what it is, you can read this article.

If you’re looking for reasons to stay away, look below.


Market Sentiment

Did we bottom yet?

The public sentiment seems to be changing. Lots of industry folks are beginning to think we've already bottomed.

Maybe. Maybe we have. But I want to know why. And if you can’t make an effort and tell me why, I’m probably not going to listen to you.

So why have we bottomed? Does it have to do with hash rate? Trading volumes? Number of UTXO's? NVT? Number of active addresses?

If someone is telling you that we’ve bottomed, or that we haven’t bottomed, best ask them why.

(*In my case, I’m mostly looking at momemtum, trend and volume.)


Bitcoin (Daily Overview)

I’m still keeping an eye on this macro-trend line.

Also, in the second chart below, take a note at how shorts are increasing.

Bitcoin (Daily zoomed in)

Here I added some moving averages and BTCUSD shorts vs longs.

I’ve been asked what it would take for me to start thinking that we’re beginning to go bullish.

Pretty simple. I want to see the price cross the 200 SMA, and then I want to see a 50 SMA / 200 SMA crossover. This is one example of a scenario that would put me over the 50% threshold and I would say we’re in a bullish trend.


Bitcoin (Monthly Support/Resistance Levels)


Bitcoin (Weekly Support/Resistance Levels)


Bitcoin (4h Volume)


Bitcoin (Macro Overview)

Below are the 3 most common bottom scenarios.

  • Option 1: Fractals analysis bottom (2,300 - 2,600)

  • Option 2: Fib extension bottom (1,700 - 1,900)

  • Option 3: Retest support of 2017 rally bottom (900 - 1,200)

As of March 17, 2019 my confidence level are:

A bottom between 1,700 and 2,600 = about 70%.
We've already bottomed = about 29%.
Retest 900-1,200 = About 1% chance.


Recommended Readings

Schnorr Signatures & The Inevitability of Privacy in Bitcoin

A good read from Lucas Nuzzi on Schnorr signatures.

In this article, I provide a general overview of the multiple implementations of Schnorr signatures and their corresponding benefits. Then, I explore MuSig, a new multi-signature standard that serves as a building block for novel Bitcoin technologies like Taproot. Lastly, I describe how the fully realized version of Schnorr can break the heuristics used in blockchain analysis and, at the same time, help develop a strong fee market in Bitcoin’s main layer.

You can read the full article here.


The end

What do you folks think?

Continue the discussion in our Telegram group.

That’s all for now.

See you later space Cowboy

-Dmitriy

Weekly Bulletin (Mar 3, 2019)

CoinSheet #247

Our heads are round so that thoughts can change direction.

— Francis Picabia (1879-1953)


Weekly Bulletin

Hello folks,

What a week we’ve had. Plenty of seemingly important things to mention.

Coinbase listed XRP, Jihan Wu might be leaving Bitmain, and Facebook is planning on launching their stablecoin in H1 2019.

Let’s jump into it.


Facebook to launch its stablecoin in H1 2019

Facebook is looking to launch its coin for WhatsApp sometime in the first half of 2019.

There are rumors that Facebook is already in talks with several exchanges, suggesting that they’re probably someway far along with development.

The internal sources now claim that the new Facebook coin will be fiat pegged stablecoin. Also, its value shall be tied to three different national currencies, instead of just one.

The only thing I want to mention here is the thing most of us don’t care about.

Currency controls.

Americans (and some Europeans) are privileged enough that we don’t care about currency controls.

If you ever get a chance to, ask a Venezuelan (or a Greek, or an Argentinian, etc..) if they care about currency controls.

TL;DR - Facebook coin will make XRP look decentralized.


Coinbase and their surveillance company

Remember how last week I brought to your attention that Coinbase acquired a surveillance company?

And that their CEO was the ex-COO of a company that sold offensive intrusion and surveillance capabilities to governments, law enforcement agencies and corporations?

Yeah, so…

Coinbase gave us a great reason as to why they needed to buy Neutrino, that is, because their previous provider was selling client data to outside sources.

This is interesting.

I don't think Coinbase has previously disclosed the selling of customer's data.

And selling customers data and not disclosing the leak afterwards is a bigger problem.

Here are some tweets.

>Your face

best gif thumbs up GIF

Market Sentiment

Technicals


Bitcoin (Monthly Overview)

Looks like we’re seeing our first green monthly candle in half a year.

I mentioned in last weeks Market Update letter (subscribers only) that we should start paying attention to the TD Sequential.

For the next monthly candle to close as a red 8, we need to finish the month with a price below the close of the previous red 4 (around 3,970).


Bitcoin (Daily Overview)

I’m keeping an eye on this macro-trend line.


Bitcoin (Monthly Support/Resistance Levels)


Bitcoin (Weekly Support/Resistance Levels)


Bitcoin (4h Volume)


Bitcoin (Macro Overview)

Below are the 3 most common bottom scenarios.

  • Option 1: Fractals analysis bottom (2,300 - 2,600)

  • Option 2: Fib extension bottom (1,700 - 1,900)

  • Option 3: Retest support of 2017 rally bottom (900 - 1,200)

As of March 3, 2019 my confidence level are:

A bottom between 1,700 and 2,600 = about 70%.
We've already bottomed = about 25%.
Retest 900-1,200 = About 5% chance.


Recommended Readings

Markets Are Eating The World

A monster of a read from Taylor Pearson.

Blockchains may introduce markets into corners of society that have never before been reached. In doing so, blockchains have the potential to replace ledgers previously run by kings, corporations, and aristocracies. They could extend the logic of the long tail to new industries and lengthen the tail for suppliers and producers by removing rent-seeking behavior and allowing for permissionless innovation.

Public blockchains allow for rules without a ruler. It began with money, but they may move on to corporate ledgers, social ledgers and perhaps eventually, the nation-state ledger.

You can read the article here.


The end

What do you folks think?

Continue the discussion in our Telegram group.

That’s all for now.

See you later space Cowboy

-Dmitriy

Weekly Bulletin (Feb 24, 2019)

CoinSheet #245

Do not believe that it is very much of an advance to do the unnecessary three times as fast.

— Peter Drucker (1909-2005)


Weekly Bulletin

Hello folks,

Hope you’ve all had a great week.

Let’s get right into it.


Bitmain announces next generation 7nm ASIC chip

Last week Bitmain announced its next generation 7nm ASIC chip for SHA256 mining.

The new BM1397 chip requires lower power and can offer an energy consumption to computing ratio as low as 30J/TH. This is a 28.6 percent improvement in power efficiency in comparison with Bitmain’s previous 7nm chip, the BM1391.

A 28.6 percent improvement in efficiency.

If you’re interested in what I think about this, you can read a previous letter titled Miner centralization is a meme.

TL;DR - The whole “China mining centralization” thing isn’t the impending doom it’s made out to be.

I think shifts in economic pressure will inevitably lead to a re-decentralization of mining.

And a concentrated mining network doesn’t mean that Bitcoin is centralized.


Samsung Galaxy S10 will include private crypto key storage

As you’ve probably heard by now, Samsung’s new Galaxy S10 will include some sort of private key storage.

Now then, I’m not going to say that this is some government psy-op to steal your private keys.

But what I will say is that you probably shouldn’t store your private keys on a device that engineered to collect as much of your data as possible.

At least not yet.

The normalization of bitcoin infrastructure.

I like the sound of that.

Until then, just think of the bitcoin deflation with all them lost phones.


Ethereum Constantinople / St. Petersburg upgrade

Here’s a link to the announcement.

The Ethereum network will be undergoing a scheduled upgrade at block number 7,280,000, which is predicted to occur on Thursday, February 28, 2019. The exact date is subject to change depending on block times between now and then and could be activated 1-2 days before or after. A countdown timer can be seen at https://amberdata.io/blocks/7280000. You can monitor the network upgrade in real time at http://forkmon.ethdevops.io/.

I’m not gonna lie, I’m not particularly interested in all the technical talk about what this upgrade entails.

And most likely, neither are you.

What I’m interested in is that Constantinople will reduce the ETH block rewards from 3 to 2, decreasing new ETH supply.

Assuming all else remain equal (i.e., the complexity of what they’re working on doesn’t get any less complex), in the long run, this is decidedly bullish.


Coinbase acquired a surveillance company

Soooo Coinbase acquired a surveillance company.

Huh? Do tell? Whatever do you mean? What’s worse then that?

Arjun Balaji@arjunblj
Congrats to Coinbase on the acquisition of chain analysis startup Neutrino! FYI, the CEO, Giancarlo Russo, was ex-COO of HackingTeam (
en.m.wikipedia.org/wiki/Hacking_T…), who sold "offensive intrusion and surveillance capabilities to governments, law enforcement agencies and corporations."

Sold offensive intrusion and surveillance capabilities to governments, law enforcement agencies and corporations.

awkward cardi b GIF by Saturday Night Live

sell products that are used by authoritarian governments to commit violations of human rights and freedom of information.

This time it’s going to be something different tho. Ya know what I mean?


Market Sentiment

Technicals


Bitcoin (Daily Overview)

Here’s a link to the Market Update post I put out last week.

I’ll be sending these out to paid subscribers, and making them public the following week.

Here’s what I wrote.

Here’s what happened.

This drop happened quite suddenly (within an hour).

The next major support I’m looking at is the 50 SMA (orange line).


Bitcoin (4h Support/Resistance Levels)

Look how strange this chart looks.

Bitcoin has been ranging WAYY above what are it’s normal pivot points.

Drop was very much expected.


Bitcoin (4h Volume)


Bitcoin (Macro Overview)

Below are the 3 most common bottom scenarios.

  • Option 1: Fractals analysis bottom (2,300 - 2,600)

  • Option 2: Fib extension bottom (1,700 - 1,900)

  • Option 3: Retest support of 2017 rally bottom (900 - 1,200)

As of Feb 24, 2019 my confidence level are:

A bottom between 1,700 and 2,600 = about 70%.
We've already bottomed = about 25%.
Retest 900-1,200 = About 5% chance.


Recommended Readings

Privacy & Bitcoin

A deep-drive on privacy. A monster of a read.

While Bitcoin can support strong privacy, many ways of using it are usually not very private. With proper understanding of the technology, bitcoin can indeed be used in a very private and anonymous way.

As of 2019 most casual enthusiasts of bitcoin believe it is perfectly traceable; this is completely false. Around 2011 most casual enthusiasts believed it is totally private; which is also false. There is some nuance - in certain situations bitcoin can be very private. But it is not simple to understand, and it takes some time and reading.

You can read it here.


The end

What do you folks think?

Continue the discussion in our Telegram group.

That’s all for now.

See you later space Cowboy

-Dmitriy

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