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Cryptocurrency Investing

Facebook Cryptocurrency: Libra

July 25, 2019
There is still the ability to create a major change in price based on news, i.e., just by Libra coming out, we saw Bitcoin go from the high 6000s pushing above 13000 then falling back down below into the 9000s again and now climbing its way back up to 1250 after we get stabilization from that initial news.
Roger Bryan

So you do need to look at that and try to examine what happened then versus what happens, what’s going on now. There is more regulation in place. There is less ability for fake news to be disseminated, although there is still some. There is still the ability to create a major change in price based on news, i.e., just by Libra coming out, we saw Bitcoin go from the high 6000s pushing above 13000 then falling back down below into the 9000s again and now climbing its way back up to 1250 after we get stabilization from that initial news.

Good news and bad news can directly affect the price of these assets a lot more than they can in normal equity in the public markets. As Facebook pushed this news out, we saw the prices go up. Then regulators came out and asked Facebook to put a hold on this project and the prices came down. Not necessarily a direct correlation to the actual use case of value proposition of Bitcoin or some of the other assets, but an effect nonetheless.

Each month we like to dive into what’s going on with some of the other projects that are available through the Equity Trust Digital Asset Platform. We’ve talked a little bit about Bitcoin. It’s a ride on the Libra cocktails for right now in price fluctuation. Ripple or XRP has made some major announcements and some strides to do more large scale banking transactions, cross border payments successfully into establish more partnerships.

There was a conversation about whether or not something like Libra could be a challenge to XRP and really their focus in one into the consumer side of the world out of the gate, although getting the backing of some major financial institutions that could potentially leverage it for other things. Regulation of course being a key question there. Does still give XRP a run rate that gives it some future opportunity.

I did see that in the private markets, Ripple Labs, which is the company, doesn’t own XRP but it’s kind of the controlling element of XRP from a lack of a community base, is raising capital. Again, they haven’t raised since 2017. The multiples are little ridiculous, but there’s still a lot of excitement behind that project. The multiple being ridiculous is my own personal opinion and not that of anyone else.

Ethereum, which got its ride in 2017 off of the ICO craze, has been making a good strong foothold in the STO craze. ICO being initial coin offerings, which are definitely out of vogue now, into the STO, the securitized token offerings, which are becoming more popular. A lot of them are being built on the Ethereum blockchain. Some of them are being built on the Tassels blockchain or some of the other smaller private blockchains that are being launched by the individual organizations that are bringing those offers to market.

One of my favorite, personal favorite, and that is tZERO, which has made recent announcements to list its second asset on its asset management platform and then also Tassels, which has won some recent bids to use their blockchain in the financial sector for some potentially very large projects. One of them, kind of odd, is doing a race for the Atari movie, which I thought was interesting. So, a lot going on there.

Litecoin was actually one of the best performers so far this year coming into July of 2019, and it almost tripled in value outpacing all other assets, macro assets in the cryptocurrency markets. It has kind of stabilized and lost a little bit of its height from that cycle, but it’s still a strong underlying asset that should be part of any portfolio. Again, my personal opinion and not that of any of Equity Trust’s team or their partners in the dissemination of this newsletter.

The other two assets to kind of roundup the top, which are Bitcoin Cash, has really had a lackluster performance since its fork a couple months ago, and then also looking at, there’s one other one, Ethereum Classic, which is, we’ve talked about it in previous newsletters, has really lost nearly all of its momentum in its development team behind it, and is really not a great value add to anything.

We’re looking for strong growth out of Bitcoin going into the rest of the year based on my personal opinion, our team’s personal opinion and in our research in the markets. A lot of that could be carried by Libra. It could also be pushed down by regulators as they react to Libra. You’re going to see a lot of great articles in this month’s newsletter about Facebook going out and get their bid license in the state of New York, which is a big part of putting tokens into the market.

There is a lot of talk about them wanting to bring a regulator into their team in order to head part of the regulatory department to get that closer connection to things. All of those are great opportunities for the overall market. So when you round out where you’re looking this month for potential growth going into the start of Q3 and the end of Q4 if you’re looking it on an annualized basis, we love Bitcoin.

Looking at Ethereum, we’re looking a little bit at Litecoin, but we’re missing some additional forward momentum on it, and XRP as it continues to push out its partnerships and deals, looking for things that they could do to address the circulating supply, potentially with an increase in burn or further lock up or burn held assets. There’s a lot going on in the markets. For those of you that have been watching this report for the last six months, it’s been one heck of a fun ride.

As we look at the value of our portfolios continue to increase, and we continue to look at how we can participate in the markets either directly through the macro assets or by leveraging the funds in our IRAs to invest directly in private fundraises being done for the companies that will run this industry 20 years from now or the projects that are being run on their blockchain.

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