Sankalp's Blockchain & Bitcoin Snapshot - Issue #6

Thank you to everyone for joining us at Crypto Friends Meet in Delhi on Saturday. It was really awesome to see all of you. A big thanks to the team for arranging this. You can check more details at Argo World

Or email me on sankalp@shangariventures.com 

“Money is the most successful story ever invented by humans, because it is the only story everybody believes” -@harari_yuval

Given the exponential rise of crypto currencies and more importantly the Bitcoin, this newsletter is dedicated to trading of crypto assets. You can always reach out to me for further help or any advise generally on Blockchain. 

BY NO MEANS THIS IS ANY SECURITY TRADING ADVISE AND YOU ARE SUPPOSED TO TAKE EXTRA PRECAUTIONS AT YOUR OWN RISK. YOUR MONEY YOUR RESPONSIBILITY. NO ONE ELSE TO BLAME

Cryptoassets and Tokens. Crypto trading is very volatile, we have all seen that but with limited liquidity and a very small cap. So this ca be more risky than normal equity or Fx trading. Most of the guys coming into Crypto trading today want to make quick bucks. Its possible, definitely, but you have to be very disciplined and understand your goals, its market behaviour and where and how to trade. You can either trade on fundamentals or you can trade on technical analysis, But young people coming in this trade to make quick returns lack both today. I hope this article will help. 

Another Caveat, I am not a trader by profession. Yes I have been a banker, but not a professional trader. Believe me, its not rocket science as you will see below. I can boast about all my returns and how much I have made over the years trading BTC but there is no point. Its been worthwhile though.

1. Learn Blockchain and how it works. Get your basics right. Don’t just jump into trading. It will really hep you to get both fundamentals as well as Technical Analysis right. Couple of great articles below here: 

2. Basic Trading starts with BTC and always is the major part of your portfolio. As I write BTC market cap is above $50 bn now. Thats phenomenal. There is no other asset that has given better returns over last 8 years. The best strategy so far has been mostly Buy and Hold. The key word here is mostly. It’s still the best in my opinion for someone who doesn’t have much patience and time. Ofcourse then there have been volatile periods like over the last 30 days. Much money was to be made. I’m proud to say that our analysis has been mostly right. Its publicly published on Linkedin. Clients as well is have been best served. If you want to be more brace, learn more and have more patience, then make sure BTC ia still over 75% of your portfolio. Nothing less. All ICOs bar one have yet to prove their worth. That means all ICOs bar Ether have yet to deliver. Ether = another 10-15% of your portfolio. Keep remaining for ICOs. 

They all require BTC or Ether to get in - BTC because Ether needs BTC in the end. So they must rise. Others coins could give good returns as well if you have the eye to research and patience to read white paper and ability to hold on for 2-3 months post ICO. Otherwise back to basics and stick to BTC and some Ether love. There is still a lot of room for BTC around go to 5k by year end and 50K in 3-4 years. So hold and behold. 

Here is a full circle rule - when you start new. Open an account, get some BTC via exchange, sell back and get money to your account. So that you know how much exactly it costs and how the entire thing works. After buying on an exchange store in a cold storage and buy and sell there as well. This is very important. Because in the end if you can’t buy beer with the money, it ain’t money. 

Another important Mantra. Don’t get greedy. Invest within your means. True for any trading rule but I thought I will mention again here. Within Your Means. 

Huge opportunity lies ahead. Invest as much as you can in Crypto. This could be your best advise for retirement. Thank me once there and send me some $$$Love. 

Specifically for another star Ethereum,I don’t know. While I’ve advocated 10-15%, it’s an individual perception in the end. ETH will never do as well as BTC because it’s not as centralised at BTC. Simple. Everything still goes to a centrally controlled Ether Core with Vitalik still as the chief advocate - that is Ethereum Foundation is still en entity and not complete from some influence. I don’t trust. 

3. Taking Profits and Earning some Regular Income - we are all trading to make money. What better than making regular money and paying off some bills. To do that, take off some regular profits. As a banker, crypto trader and entrepreneur, I’ve seen enough. While there is only one way up from here for at least next 2-3 years, you never know. Never say never. Again, it’s not profit till you can’t buy beer. Get your targets set and take off that minimum amount every month or on a weekly basis as you need. 

Every dip is a buy here - till I again come back here and tell you so. Keep your stops at about 10% and leverage up (more on leverage below). In a steep fall, the markets are even in backwardation amd that’s great to play the Futures market. Still in nascent stages but best played at Bittmex Exchange in HK.

4. Technical Analysis helps as well - here is the basics of that

That is a whole new study in its own. No need to make your life complex. These basics are good enough in this simple article by The Wolf

5. Now you have bought the BITCOINS - where to store them? This is very important aspect of trading. DONE LEAVE THEM ON THE EXCHANGE. DONT. I Cannot stress enough. When you store the BTC in wallets, you are actually giving away your private key for them to manage. That is not right. Storing small amounts is OK, but all the money - No No No. Four ways to store your Crypto Currency safely: 

Great article by Alex below:

6. Never forget the basics of computing and specifically of security - Here are some basics:

Strong Passwords - because all your money depends on that now.

No strange Anti-Virus softwares. They do more harm than good.

Never share your Private Key, Never

7. A Word on ICO: Handle with Care

They are all very difficult - two men and a dog mostly. Most are based on Ether Smart Contracts. You need Ether to get in, for that you need BTC to get Ether. if you can’t read and judge from the white paper or you have another Solid reason that your GF is issuing them, stay away as a trader. Better off holding Ether and Bitcoin. 

But newly released ICO’s can sometimes be wonderful. Look for a great Whitepaper that even my grandmother can be proud of. See that the source code is open. Otherwise its not decentralised to begin with and might be just a theory. Above all, a great team and strong advisors. There are other factors as well but then I might as well write a book on ICO’s. 

Let me just say that this is a complex topic which makes me passionate about this story. It is hard to explain in one line. But you should pay attention to it, yeah.

Economic model.

This is an interesting area, due to which this industry will grow very quickly. Also it is the subject for a whole separate book. In General, the economic model needs to be effective, the system must have all necessary economic incentives to achieve the desired goals!

The structure of the distribution.

If founders want to own 90%, that is a centralized thing, and the risks increase. The norm in ICO is the reward of the team in the amount of 10% -20%.

A technological approach.

Some comrades are trying to create their own independent network of one feature. Or on the contrary try to implement over an existing network, which requires an independent network. Here it is necessary to pay attention, since architectural mistakes in the design of the blockchain system very quickly kill a potentially interesting project.

Generally, all these criterias are not exhaustive. However it is enough to understand that making such decisions requires analysis and understanding of whole picture.

Guys from cyber.fund collect significant ICO in their radar

8. Leveraging In Cryptos: Be Very Careful

Risk vs Reward, simple. But if we tread carefully, it can be great. Cover with stops and sell to make decent profits regularly. Don’t get carried away with 100X leverages at Bitmex. You can avoid large margin calls by simple Stop orders or Guaranteed Stops.