Is Ethereum a buy at 400?

Today is Thursday, March, 29th, 2018 which is the last trading day of the quarter for U.S. stocks.  Today is an up day for the S&P 500, but it is down about three percent for the quarter.  Crypto currency are down much more than that in the same time frame.  There was a time in February in which stocks and cryptos looked to be trading with a high correlation.  That correlation has been lost over the past several weeks.  Hopefully this breaks any correlation there was, and allows cryptos to trade as a separate risk asset class.

The current charts of the biggest crypto currencies do NOT look good at all.  Since early January they have made a series of lower highs and lower lows.  In Ethereum (ETH) this $400 level has not been seen since November of last year.  We feel that if ETH holds this $400 level for the next several days, then you can put new money to work here with a stop just below $400.

This drop in Ethereum from $1,400 to $400 has created many great trading opportunities.  These opportunities will remain as long as the volatility remains at this extremely high level.  We recommend actively trading and using these ten-to-twenty percent swings to add to your total coin count.  even is you believe, like we do, that ETH will trade back to $1,400 this year, that is no reason to stop trading.

If you had purchased two coins when ETH was at $900, it could take you months to get back to even.  However, if you actively traded ETH you could have easily turned those two coins into 5 coins.  Making your break even point much lower, and realizing a sizable profit when ETH regains that $900 level.

For tips and tricks on trading feel free to contact us.

Bitcoin Regulation is a good thing.

In recent days there has been a lot of talk about the regulations that are certainly heading to the crypto currency trading markets.  As these assets become more well known, governments will look to “protect” their citizens and get their share of the pie.  Government regulation in a decentralized market is currently being viewed as a bad thing.  Regulation will certainly remove some of the investors who are looking to hide assets and those who are looking to stay off the grid.  However, regulation will pave the way for large institutional investors to jump in.

If this asset class is going to grow in a meaningful way, we need institutional money.   The crypto currency market has assets of roughly five hundred billion dollars.  While that is a lot of money by most standards, when compared to the over one hundred trillion dollars invested in stocks, it doesn’t even register.  The crypto currency markets need the types of investments and valuations currently afforded to the internet markets.

Investing in crypto currencies in 2018 is equivalent to investing in Google in 1998 or Facebook in 2004.  We encourage everyone to embrace the coming regulation and get invested before institutional investors release billions of dollars in to this asset class.  Don’t make the same mistake millions of people made in the 90’s and miss this life changing investment opportunity.

We are more than happy to help guide you through the early stages of crypto investing.  Please don’t hesitate to contact us.

 

Crypto Currency ETF’s, Why Can’t You Find One?

The short answer is that the United States Government will not allow Exchange Traded Funds that invest their assets in crypto currency.  The reason why the Government wants to keep the average person from becoming a millionaire is a debate for another time and place.  What you need to know now is that due to the vast interest in crypto currencies there has been a push to get ETF’s listed on the New York Stock Exchange.  As a result you do have a few ETF’s that invest in stocks, such as Square (SQ) or Overstock (OSTK), which have some exposure to the crypto currency markets.

Obviously these types of ETF’s are not what you are searching for.  You are looking for a fund that is directly invested in crypto currencies such as Bitcoin (BTC), Litecoin (LTC) or Ripple (XRP).  A fund that is diversified in many different coins will allow you to take advantage of the enormous returns we have experienced over the past two years, while being protected from the huge losses we have also seen in individual coins.

While you can NOT buy directly in to an ETF from you standard brokerage account,  you CAN find what you are looking for.  The best way for you to do this is by finding a crypto currency investment club and joining it.  These types of funds typically cater to investors with $100 to $25,000.  Making them the perfect place for the average person to get exposure to this very lucrative asset class.

Click here to join a club today.

How to protect your crypto currency investments

As we sit here having another great day trading, thanks to $LTC which moved from $155 to $175, most of which came from 5pm to 6pm.  We knew we had to help you protect your crypto currency investments.  After all, if it can move ten percent to the upside in sixty minutes, then it can move 10% to the down side even faster.  Today we are going to talk a little about using stops for active traders and using cold storage for our long-term holders.

We will start with the long-term investors of crypto currencies.  If you have no desire to actively trade your crypto, and you are not one to let the daily swings negatively effect your attitude, then you should keep your crypto in cold storage.  In simple terms, keep your coins OFF of exchanges.  All you have to do is get a wallet to store your coins.  Some are free, some cost money up front and others charge based on coins placed in the wallet.  Find one that is right for you and move your coins into it.  As always, if you need help please feel free to contact us.

Now for our active traders.  We are going to speak briefly about using stops.  Some exchanges combine stops with limit orders, while others have separate stop tabs.  First things first, ALWAYS use limits to buy or sell your coins.  This ensures that you will get the price you are looking for.  Market orders can often to filled one-to-two percent away from the spot price you are looking at.

When you buy any coin for a trade, immediately identify what percentage loss you are willing to take.  Once you know that level, set a stop there.  For instance if you purchased $LTC at $155 and you were willing to risk 10%, then you would set a stop near $140.  This will sell your coins if $LTC trades down to that level.  This strategy helps protect you from taking on the 50% losses that can sometimes come in crypto.  It also leaves your money to reinvest when the currency settles in at a lower support level.

Soon we will go over different ways to read support and resistance levels on the standard candlestick charts.  Feel free to contact us with any questions.

Quick guide to Bitcoin investing and other crypto currencies

This is a quick step-by-step guide for those of you who want to begin trading crypto currencies on your own.  If you are just looking to take advantage of the large returns crypto has to offer, but prefer to have someone else make the trades, then we suggest you join the NJOYcryptoFund.  For those of you who are reading to grab the bull by the horns please continue reading.

If you are an active trader who is familiar with stock, bond, option and especially currency trading platforms, then you will have an easy time adjusting to the way most crypto currency exchanges operate.  If you do not have any online trading experience, don’t worry, we will be here to help you.

The first thing you will need to do is open an online trading account.  We recommend open accounts at several different exchanges, as not all coins are offered at all exchanges.  New regulations in the crypto world, coupled with an enormous increase in demand, has lead to this process taking from what used to be minutes to now taking weeks.  Here is a list of some popular exchanges, both US based and those from other countries.

  1. GDAX (you automatically get this exchange with a Coinbase account)
  2. Poloniex (is also US based and has a quick set-up time, you do need a computer with a webcam)
  3. Bitstamp (registration is currently taking 5-6 weeks)
  4. Bittrex (as of February they still aren’t accepting new clients, this will hopefully change soon)
  5. Kucoin & Huobi (quick and easy to join, as are most exchanges in Hong Kong)
  6. Livecoin (London based exchange that is easy to join)

Step two is where things first start to get a little tricky to US based investors.  Most of the exchanges do NOT allow deposits directly from your bank account or credit card.  You will need to set-up an account at any of a number of sites in order to buy crypto coins, and then transfer them in to your desired exchange.

  1. Coinbase (you can buy and sell Bitcoin, Ethereum, Litecoin and Bitcoincash on this site. We recommend that you try and keep the fees to a minimum and use your bank account to transfer money to your wallet.  Bank transfers take 8 days on average, but have the lowest fees. Then transfer that money to GDAX where you can set limit pricing.  If you do not want to wait the 8 days, you trade instantly by using your debit card to purchase one of the coins directly.)
  2. Cash App (from Square.  This allows you to buy and sell Bitcoin.  Once you own Bitcoin you can transfer that Bitcoin to any exchange through their deposit page)
  3. CoinMama (registration here is currently taking 6-7 weeks. You can purchase Bitcoin or Etherum and transfer those to any exchange)
  4. Tether (registration is currently closed.  They allow you to purchase the USDT coin which can be transferred to most exchanges.)

Now that you have several exchanges set-up and funded it is time to start trading.  This is where currency trading experience is helpful.  Some of the more popular crypto coins are traded in dollar terms.  Buying them is similar to buying stocks or rather more like buying in to mutual funds.  You can easily see the price, for example BTC (Bitcoin) at $10,235, and you can invest any amount of money in that coin.  You do NOT have to buy a single coin.  You can invest $100 and receive a fraction of a BTC.  However, for the majority of coins you will need to trade them in pairs like you would on a standard currency exchange.  Much like you can trade USD/EUR at its current rate of $1.25, you can trade BTC/DASH at its current rate of .06655735.

We hope this is a helpful guide to get you started.  Feel free to email us your questions and we will do our best to answer them.  Coming articles will discuss things like how to read charts and the importance of using stops.