The Daily Bit: August 15, 2018

 

 

 

 

Issue #157 | August 15th, 2018
 

THE DAILY BIT

 

 

 

 

 

Tweet Of The Day

BREAKING: Ticker for Ripple being changed from $XRP to $RIP

– @mark_dow

 

 

BITCOIN (BTC)  |  3.98%  |  $6,362.31


ETHEREUM (ETH)  |  8.30%  |  $284.49


RIPPLE (XRP)  |  8.26%  |  $0.285538


BITCOIN CASH (BCH)  |  4.86%  |  $516.62


EOS (EOS)  |  5.25%  |  $4.60


STELLAR (XLM)  |  3.13%  |  $0.221267

*As of 10:15am

In the past 12 hours, there was no reason to be upset. The market went on a $15 billion rally before flattening out closer to $205 billion.

And don’t look now, but there’s a short squeeze brewing on Bitfinex.

 

 

 

WORD ON THE STREET

 

 

 

 

Lessons from a Fun(d) Guy
When the going gets tough, the tough get going. Overall morale might’ve been deep in the gutters yesterday, though there were still a number of folks out there providing value.

In the wake of a slower than usual media day (most headlines were focused on the real-time Armageddon), we’re going to dial in on trading lessons shared by Marc Dietsch, a 6-year hedge fund manager who managed $100 million in futures, options, and FX.

Appropriate position sizing. Traders don’t go bust from losing with proper position sizes – they go bust from losing with too much in the pot.

Leverage is not your pal. Don’t let the grandiose payouts distract you – most people that trade using leverage see their holdings go up in smoke. Stay in your lane, or better off – stay off the Autobahn.

Don’t trade illiquid assets. Same song as leverage. Less liquid projects move faster (i.e. higher volatility). If you haven’t traded illiquid tokens before, keep it that way – stick to those with more volume.

Use the Sharpe ratio. For those at home, Sharpe Ratio = [(average return) – (risk-free return)] / standard deviation. Portfolios with high volatility and high returns (low Sharpe) are easy to stumble upon. Ones with low volatility and high returns (high Sharpe)… not so much. Strive for the latter.

Trend or mean-reversion: Is the market trending up? Down? Or is it “sideways”, aka mean-reverting, aka “range-bound”? Different strategies can be applied to each. If it’s mean-reverting, know what “cointegration” is – more on that here.

Take profit (actually). Set targets at the beginning and stick to them. And if you think you have too much money… it’s probably time to sell. Shoutout to January and an $832 million total cap.

Do your homework. Trade setups that worked in the past aren’t entitled to future success. Map out the setup and make a call from there.

Beware of the HODL. Great for fostering community, not as great for making money. The art of the HODL applies well for bull markets but can steal your gains faster than a scamcoin pump and dump if you’re not cautious.

And if you haven’t already… read Market Wizards. You can thank us later.

 

 

 

OTHER NEWS

 

 

 

 

(1) Goldman Sachs and Nyca Partners led a $32 million Series B round for Axoni. According to CEO Greg Schvey, Axoni is “turning projects into products” using in-house distributed ledger tech.

Other investors: Wells Fargo, JPM, Citigroup, Andreessen Horowitz, Y Combinator.

(2) Peter Van Valkenburgh reminds us that token airdrops may not protect teams from a securities regulation. Airdrops are an alternative way to bootstrap network growth where teams scrap ICO public sales and send tokens straight to the user.

Here’s the thing – airdrops are nothing new (we’re not talking Call of Duty). Four “free stock” offerings were made during the dot-com rally… and all four saw repercussions from the SEC due to “valuable benefits” obtained from the distributions.

(3) Per an account from ABC International, the Venezuelan petro will soon be used as an official accounting unit. President Maduro continues to push for implementation of the digital currency despite sharp criticism from the global economy regarding the petro’s legality.

(4) AirSwap is launching an OTC platform that will allow investors to negotiate larger exchanges in private. The DEX project is looping in money transfer platform Wyre – who recently added the MakerDAO stablecoin to their rolodex – to mandate ID verifications for those involved.

(5) Cash App saturated the U.S. market, announcing that users can use the app to purchase Bitcoin in all 50 states.

Brain Fuel

  • 2 min read: Ethereum Bear Market Uncertainty (Michael Spencer)
  • 4 min read: Toward a million markets… (Jacob Horne)
  • 6 min read: The Security Token 2.0 Stack (Jesus Rodriguez)
  • 11 min read: The Great Filter: Why You Shouldn’t ICO On Ethereum (Spencer)

(Note: The information presented in this edition is not trading advice and in no way should be considered trading advice.)
 

  

 

 

 

 

 

THAT’S ALL FOR TODAY!

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