Altcoin Analysis #2

By: Aaron Schwartz

Last Week Highlights:

Yet another exciting week we’ve had in the crypto universe. Between the launch of the Ethereum Classic Investment Trust ($ETC), Litecoin moving forward with Segwit adoption, the surge in price of Bitcoin, the Bitmain “Antbleed” conspiracy, and a number of highly visible ICOs being launched, we have a lot to cover. Let’s get started.

ETC Investment Trust

For one, we have the launch of the Ethereum Trust, which is an Ethereum Classic investment fund soley invested in and deriving value from the price of $ETC, led by Barry Silbert and sponsored by Grayscale, a US Investment firm focused on investing in emerging digital currencies. Silbert, who has emerged as a celebrity of crypto-Twitter, has earned the nickname “Shillbert” by many Twitter users due to his apparent ability to manipulate the prices of the Ethereum Classic markets with his “shilling” tweets. The coupling of Silbert’s return to Twitter along with the launch of the much anticipated investment trust has caused a great deal of buzz around the immutable Ethereum fork. To match the excitement, the price of Ethereum Classic has continued its steady ascent, climbing over 115% within the last two weeks, making it an 84% price increase for the month of April and over 322% since the initial announcement of the Ethereum Trust.

Next, Litecoin dropped a huge announcement on us with the revelation of an agreement being reached to implement Segwit immediately. According to a unanimous decision made at the Litecoin Global Roundtable Resolution, which was organized among key stakeholders in the Litecoin community, the Litecoin protocol will be upgraded to implement the Segregated Witness soft-fork, and the Litecoin block-size debate will be readdressed once the usage of the Litecoin block capacity is over 50% The decision comes as a huge relief to many Litecoin holders, as the seemingly never-ending political gridlock situation over Segwit has been resolved for the time being and the developers and community can now move onto innovating the protocol further while developing real business use-cases.

Additionally, Charlie Lee, the illustrious founder of Litecoin has recently hinted at more coming technical developments for the bitcoin fork, now that his token has officially established itself as a leader, and not a follower, to bitcoin.

SatoshiLite’s optimism is downright contagious

In fact, some are now even deeming Litecoin as the new “Bitcoin testnet” as it is pushing boundaries to technical development for cryptocurrency, among the first to adopt Segregated Witness and possibly more game-changing innovations to crypto-technology. Most notably, these developments have had a profound effect on Litecoin’s value as of late, with market cap rising to #4 by market cap and the price rising 8% since the announcement to around $15. With Litecoin on Coinbase, Segwit activation coming soon, a strong, devoted founder, community, and development team, and a number of impending technological innovations to come, the future has never been brighter for the “silver to bitcoin gold.”

Antbleed

Ok so as if we didn’t already have enough drama and bs in the Bitcoin community and our very own scaling debate, we now have a development that takes the cake of “officially sucking camel d***” to quote the movie of the century, Step Brothers. So we all hate talking about this and even thinking about this topic by now so I’m going to make it quick and easy for you. A recent leak on Reddit has revealed that Bitmain (yes the guys supporting Bitcoin Unlimited and a CEO who actively starts arguments with people on Twitter) has a built-in killswitch in all of their “Antminer” bitcoin ASIC miners to remotely shutdown a miner at any time. You’re probably thinking “that sucks but things could definitely be worse.” Let me stop you right there. Peter Todd, one of the more vocal and well-known Bitcoin core developers revealed in a reddit post that him and his buddies figured out that the remote shutdown “backdoor” that Antminer created in its products has no authentication, meaning hackers can trigger it with a MITM (man in the middle) or DNS attack. If true, this means anyone with MITM capability or the ability to change DNS records can permanently kill ~70% of the hashing power. Yeah… enough on that topic for now. For more information on how to secure your Antminer device or on the situation in general, you can checkout www.antbleed.com — a website created by some concerned community members to help remedy this issue. To conclude, this is an example of the deceiving nature of advanced technology and how we as a community must take care not to perceive the protocol as infallible and continue to focus on fixing current issues while constantly searching for potential vulnerabilities.

Bitcoin Price Rise

Also noteworthy in Bitcoin this week has been the price rise, as BTC continues to push boundaries of new all time highs on Bitfinex in Hong Kong, with the price in the US trailing around $100 behind at all times. This brings up another noteworthy point, which is the seeming absence of arbitrageurs in this market. This may be partly due to the arduous process of performing arbitrage in the cryptocurrency markets, but is most likely a sign of the immaturity of the markets. Bitcoin price has risen as high as $1500 in the last week from around $1200, representing an 18% increase. Interestingly, the altcoin markets have followed suit, and have followed bitcoin’s rise in market cap and dollar value of most assets.

ICOS

Finally in last week’s action-packed news, we had some big name ICOs take place — namely Gnosis, MobileGo, and Lunyr. Let’s take it from the top.

Gnosis ICO

• Token Name: Gnosis, $GNO
• Website: https://gnosis.pm
• Amount Raised: 250k ETH (~$298 Million)
• ICO Price:$29.85
• Synopsis: An Ethereum-based prediction market token allowing users to speculate on “anything”. Many investors feel that the ICO was unfair as only about 5% of tokens have been distributed to early investors — 95% is in the hands of the GNO team. Investors are afraid team members may dump their tokens to realize profits, decimating the price of the token. We will see the outcome on May 1st, as it will be added to several large exchanges including Bittrex and Poloniex.

MobileGo ICO

• Token Name: MobileGo
• Amount Raised: Ends in a month
• ICO Price: Amount Collected / 100M Tokens
• Synopsis: The MobileGo ICO is intended to raise $ for marketing of the MobileGo Gaming Platform and App Store which is reportedly already fully complete and quite robust with over two years of development and one million dollars spent in development. The platform will have 300 mobile games to start and projects to have up to 1000 by the end of 2017. The tokens will be used as a currency by which to purchase applications and in-app content on the app store and will enable users to receive discounts and rewards, and participate in decentralized tournaments and match play.
• Website: https://mobilego.io

Lunyr ICO

• Token Name: Lunyr, $LUN
• Amount Raised: 47923.13 ETH (~$3.7M)
• ICO Price: 44 LUN / ETH
• Synopsis: Lunyr plans to build a decentralized crowdsourced encyclopedia to rival the likes of Wikipedia. In the long term, the platform intends to be a knowledge base API that can be used by Artificial Intelligence, virtual reality, augmented reality, and other software to create content and applications. Contributors will be rewarded for their work with the LUN token, creating an incentive system for content creators. Additionally, content may only be submitted after a peer review, in which reviewers are also incentivized with tokens.

What to Watch For This Week:

Bitcoin

Topping our weekly watchlist for the beginning of May is none other than Bitcoin itself. The Bitcoin price is in the spotlight to start the next week as a great deal of uncertainty remains around the direction of bitcoin’s next move. Following a steady price rise of 18% to $1500 over the previous week, and continued developments taking place in the scaling debate as well as the global economy, many are expecting the price to continue to move. The only question is which way will it go? If it goes up, many traders fear the worst for altcoin prices, as historically the bitcoin price is negatively correlated with altcoin prices with the exception of a few that rely on the Bitcoin blockchain (Counterparty). However, in the recent price rises of Bitcoin, altcoins have kept up with BTC as of late, and imo will continue to as money continues to pour into cryptocurrencies and the market cap value of the entire industry continues to set all time highs. If the price goes down from here, many traders are expecting the start of an “altcoin mega-pump” — going back to the negatively correlated historical performance of bitcoin compared with altcoins, which has been especially pronounced in short-term corrections of bitcoin prices after a large rise.

APX Ventures

Finally, in the ICO spotlight for this upcoming week is a project called Apex Ventures, which is a “self-sustainable company specializing in cryptocurrencies and digital assets” led by crypto-Twitter veteran @AceOfWallStreet and Richard Smith, CEO of Misty Mountain Mining, who will be taking care of the portfolio management and mining operations respectively.

I was able to get in touch with Ace, who had the following to say regarding the venture: “APX is a completely new concept merging various parts of the blockchain industry into one. For example, a hedge fund would buy coins, a VC fund would fund new projects, and if you owned a mining farm you would mine coins. We’re doing all three aspects. So its hard to classify APX into one specific existing model.” When I asked him what his goals for APX are, he said, “Our goal is merging what we think are the key aspects of the industry into one, for operational efficiency. At the same time, we can also contribute positively to the entire ecosystem and help the space mature by selectively funding new projects that have an overall positive impact. The cool thing is by creating APX, we get to experiment directly with blockchain technology.” The team also features several noteworthy advisors including Ubiq, Alex Sterk (co-host of Blocktalk), @MilkyDev who will be taking care of UI/UX, and another crypto-Twitter mining and trading legend, @notsofastcrypto, who will be assisting with the mining operations.

To fund the project, the team will be hosting an ICO crowdfund and distributing an ERC20 token secured by the Ubiq Blockchain. The specifications of the token are listed below. The ICO for this token will be held on the Bittrex Exchange, starting May 2nd at 11 am PST and ending on May 22nd, 2017 or until the hard cap of 1M tokens is reached. According to their Bitcointalk forum, the ultimate goal for this project is to “launch a series of products aimed to improve the entire cryptocurrency and blockchain space.” The first product that the firm is planning to launch is a ratings platform for digital assets to assist users in reliably navigating the crypto space. “Our first project that we are funding is a crypto ratings/review platform. Something like this should be highly informative for people, especially newcomers,” said Ace regarding the upcoming project. This entire venture is definitely something that is much needed for the industry and a project and our team will be watching very closely. Here are some details of the token which will be launched.

ICO Specs:

• Ticker: $APX
• Supply: 1 Million APX Tokens (900k to donors, 30k to team, 20k to advisers, 50k to APX development fund)
• Bonuses: First Day — 10%, Second Day — 5%
• ICO Price: 681 APX / BTC; 681 APX per 5000 UBQ (calculated at fixed rate of 20k Satoshis per UBQ)
• Remaining APX not sold in ICO will be certifiably burned
• Distribution: APX will be available to trade day after ICO ends
• ICO Location: Bittrex Exchange (https://bittrex.com)

DISCLAIMER

This article in no way shape or form represents investment advice. If you plan on investing in any of the aforementioned technologies, you are doing so at your own risk.

About MLG Capital

MLG Capital is a global blockchain investment and advisory firm focused on investing into next generation decentralized assets and providing our stakeholders with long-term investment management they can trust.