Coin Report #4: Bulwark

N.B: In the spirit of full transparency, the following Coin Report is the first Sponsored Post on my blog. The Bulwark team recently contacted me with a request to write up a Coin Report on the project. At first, my concern was that the team would expect me to cover up any weaknesses I spotted, which I was not willing to do; in fact, their expectation was the opposite. After they had agreed to my sole stipulation that this report would conform to the rigour of the previous reports, with all strengths and weaknesses being explored and evaluated, I agreed to write the report.

Further, my thinking was that the periodic publishing of Sponsored Posts would benefit the blog in numerous ways: firstly, it would incentivise the ~20 hours a week I spend on compiling material for this blog unpaid; secondly, it would create a greater breadth of coverage on the blog, as material up to this point has been exclusively centred on my own interests in the space; and thirdly, any revenue from Sponsored Posts can be reinvested into the blog so that it grows more quickly and reaches more readers. I have always been fully transparent with everything I do, sometimes to a fault, and I will continue to do so.

 

Welcome to the fourth Coin Report. Apologies for the long preface, but I felt that it was necessary. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Bulwark, examining specifically a handful of significant metrics; Bulwark’s community; its development history and future; and its profit potential at current prices. This will culminate in a grading out of 5. I hope you enjoy the read!


Introduction

I first wrote about Bulwark in Market Outlook #4, but my analysis of it in that post was primarily technical. Back then, it had been range-bound for 210 days (the period during which the rest of the market was dying a slow death) and that is what brought it onto my radar. At that point, it was priced at ~12k satoshis, and price has since fallen by 25% to around 9k satoshis. Evidently, an entry then would have been an early one. Since then, I have paid little attention to the project; that was until the team approached me to write this report.

Having now compiled my research, there is a great deal to discuss regarding the various strengths and weaknesses of Bulwark as a project and as an altcoin. I hope the following report will prove to be thorough and objective where it must be, though, as is the case with these reports, I will provide commentary where it is required for the benefit of the reader.

If you’d like to know more about the project, prior to reading the report, here are some of Bulwark’s primary links:


Fundamental

General:

Name: Bulwark

Ticker: BWK

Algorithm: NIST5

Sector: Privacy Hardware / Masternodes

Exchanges: Cryptopia, CryptoBridge & Blocknet

Bulwark was launched in December 2017 –  in the earliest stages of the Winter bull cycle – with a small premine (1.81% of the maximum supply), no ICO and a Proof-of-Work consensus mechanism on the NIST5 algorithm. The launch was fair, with block rewards for the first day (minus the premine block) being set at 50% of the block reward from the following day (25 and 50 BWK, respectively). The Proof-of-Work stage lasted ~182700 blocks, with the project now operating with a Proof-of-Stake consensus mechanism, supplemented by a network of masternodes. This transition has brough with it an advantage for the speculator, as we will get into later.

Further, as Bulwark has yet to have its 1st birthday, there is rather little price-history to analyse, which I will dissect in the Technical section, but an all-time high was set in January 2018, as was the case with so many altcoins.

Bulwark, as a project, seems to be less concerned with grand ambitions and more concerned with consistency. As is stated in the whitepaper, they “offer a simple value proposition with no grandiose promise: we will deliver a privacy coin that works today and into the future.” The project is, as stated, primarily focused on privacy, with development goals centred on hardware development. Privacy is about as inextricable an ideal as you can get in this space, and, with the plethora of projects devoting their attention to it, it will take a lot to stand out. We’ll see how Bulwark deliver on that front later.

For now, let’s begin with some analysis of the metrics:


Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 10th November 2018. For anyone reading this who has yet to read a Coin Report, it might be worth reading this section of the first report, where any potentially unfamiliar terms are explained. For any terms or metrics specific to this post, I will provide explanations besides the figures. Also, Transactional Volume, NVT and Network Staking Weight have been omitted due to lack of functionality of the block explorer (and integrated privacy, obviously) for such calculations. Lastly, rich-list analysis was undertaken using https://explorer.bulwarkcrypto.com/#/top and some masternode statistics are sourced from https://masternodes.online/currencies/BWK/.

Metrics:

General:

Price: 9199 satoshis ($0.59)

Exchange Volume: $28,550

Circulating Supply: 13,566,663 BWK

Total Supply: 13,885,717 BWK

Maximum Supply: 27,000,000 BWK (the reported Max. Supply is just the Circ. Supply 5 years post-launch – there is some supply emission after this point)

% of Max. Supply Minted: 51.43%

Network Value: 1277.35 BTC ($8.21mn)

Network Value at Max. Supply: $15.965mn

Category: Midcap

Exchange Volume-to-Network Value: 0.35%

Average Price (30-Day): $0.67

Average Exchange Volume (30-Day): $28,592

Average Network Value (30-Day): $8.585mn

Average Exchange Volume-to-Average Network Value: 0.33%

% Price Change USD (30-Day): -15.6%

% Price Change USD (1-Year): N/A

USD All-Time High: $16.03

% From USD All-Time High: -96.3%

Premine % of Max. Supply: 1.81%

Premine Original Location: https://explorer.bulwarkcrypto.com/#/address/bWMiJk57wsPJuGFFJCp8MzSsvzepf7CFAi

Liquidity (calculated as the sum of BTC in the buy-side within 10% of current price across all exchanges): 3.677 BTC

Liquidity-to-Network Value %: 0.29%

Supply Available on Exchanges: 159,940 BWK

% of Circ. Supply Available on Exchanges: 1.18%

Staking & Masternodes:

Network Staking Weight: Unable to determine

Staking ROI (Annual): Minimum 38.57% (if all circ. supply minus supply locked in masternodes is being staked)*

Masternode Price: $2,956.54

Masternode Collateral Size: 5000

Masternode Count: 1533

Supply Locked in Masternodes: 7,665,000

Masternode Count Growth (30-Day): -0.58%

Masternode ROI (Annual): 59.39%**

Masternode Reward / Block Reward: 60%

Masternode Network Value: $4.532mn

MNV / Network Value: 55.2%

*To calculate minimum staking ROI for the next 365 days: ((Annual Supply Emission * 30%) / (Circulating Supply – Masternode Locked Supply)) * 100 = 2,275,986 / 5,901,663 = 38.57%

**To calculate masternode ROI for the next 365 days: ((Annual Supply Emission * 60%) / Masternode Count)) / Masternode Collateral = (4,551,973 / 1533) / 5000 = 59.39%

Supply Emission & Inflation:

Current Block Height: 314027

Block Reward Schedule: 31.25 Block Reward for next 31574 blocks (~33 days) > 25 Block Reward for 86399 blocks (~90 days) > 21.875 Block Reward for 86399 blocks (~90 days). ~4 years until final block reward stage of 1.625 BWK per block. More info on p8 of whitepaper.

Days To Final Block Reward Stage (Block 1728000): 1472

Supply Emission Until Block 1728000: 14,149,056 BWK (1301.57 BTC)

Supply Emission (Next 365 Days): 7,586,622 BWK (697.89 BTC)

Annual Inflation Rate (Next 365 Days): 54.64%

Circulating Supply in 365 Days: 21,472,339 BWK

Annual Supply Emission After Block 1728000: 569,400 BWK (52.38 BTC)

Annual Inflation Rate After Block 1728000: 2.03%

Distribution:

Address Count: Unable to determine

Supply Held By Top 10 Addresses: 5.2%

Supply Held By Top 20 Addresses: 7.39%

Supply Held By Top 100 Addresses: 15.3%

Inactive Address Count in Top 20 (30 Days of No Activity): 6

Analysis:

Well, that’s a lot to get through…

Given that Bulwark is a privacy-focused masternode coin, and thus payments are a critical component to the success of the project, it’s a shame that Transactional Volume (and thus NVT) couldn’t be measured. This is, in part, a byproduct of being a privacy coin, which does make calculating that metric far more difficult. But it’s also because the Bulwark block explorer has little functionality regarding transactions. The team are, however, developing a new block explorer (which we’ll talk more about later) and they have taken my suggestions onboard. That being said, whilst Transactional Volume has been omitted from this report, there are plenty of other meaty metrics to dig into, particularly those concerning masternodes, inflation and distribution. But, we’ll begin with the General:

The first metric I’d like to highlight is the Supply Available on Exchanges, as this is inconceivably low. Supply metrics are all well and good when evaluating prices and valuations, but what often goes without consideration is how much of this supply is actually available to buy on exchanges. Exchange trading is the primary means of acquiring a position in an altcoin for the vast majority of us, and, as such, it makes sense to monitor how much supply is on the market.

In Bulwark’s case, this is extremely little. 159,940 BWK is currently on the orderbooks across Cryptopia and CryptoBridge (the two primary exchanges that Bulwark trades on). This equates to a measly 1.18% of the circulating supply. What this implies is that the conviction to hold Bulwark is strong, and it also significantly reduces headwinds for price growth. As so little supply is available on the market, in order to purchase a significant amount, one would inevitably be forced into increasing price.

Of course, this figure is dynamic, with the supply available on exchanges shifting from day-to-day; however, the most important takeaway from this figure is that very few holders are willing to sell their Bulwark at present. Now, when we cross-compare Bulwark with some of its competitors, this figure makes more sense. Phore has 1.27% of its circulating supply available on orderbooks across its listed exchanges, and Solaris has 1.11%. Privacy-focused masternodes are in high demand across-the-board, it would seem.

Supply Emission and Inflation is of particular interest, as always, given that the primary objective for readers of this report is likely to turn a profit on a position. Analysis of supply emission is paramount in this regard. As we can see from the metrics listed above, Bulwark is currently providing 31.25 BWK block rewards, though this will be reduced to 25 BWK per block in a little over a month.

As my approach to speculation is long-term,  I like to calculate at least one year’s-worth of emission statistics before I can accurately evaluate current prices. To that end, we can see that there is ~7.6mn BWK to come into existence over the next 365 days, giving an annual inflation rate of 54.64%. Now, this is a little high, but Bulwark seems to be unusually good at maintaining prices despite such inflation, as we’ll get into when we take a look at the chart. Regardless, it must be said that inflation for the next year is indeed high.

But how does the inflation fare against Exchange Volume? ~7.6mn BWK coming into existence over the next year equates to 697.89 BTC of supply emission at current prices, which equates to ~1.91 BTC  of daily supply emission ($12.2k). Exchange Volume over the past 24 hours was $28,550, and Average Exchange Volume across the past month was a fraction higher than this. Thus, Average Exchange Volume covers daily supply emission by ~232%, and, as such, if similar levels of traded volume persist, current prices should easily be maintained. Promising.

Now, where this gets even more interesting is when you take an even longer-term view. There are 1472 days remaining before Bulwark enters its final stage of block rewards at block 1728000, at which point the reward will be 1.625 BWK per block. Between now and then, ~14.149mn BWK will come into existence, or 1301.57 BTC at current prices. On average, this equals 0.88 BTC ($5687) of daily supply emission leading up to block 1728000. If Average Exchange Volume is maintained, it would be 5x greater than daily supply emission, and thus more than enough to sustain present prices, if not indicating that price growth is inevitable.

Further, once block 1728000 is reached, annual supply emission will be 569,400 BWK; an inflation rate of 2.03%. This is not taking into account the fact that 10% of block rewards will be going into the Bulwark Governance fund once we enter the next block reward stage in 33 days.

We’ve established Bulwark’s primary purpose of facilitating private transactions, but an equally important component of the project is its masternode network. So, let’s dig into the masternode metrics:

N.B: it’s quite unfortunate that Network Staking Weight was unable to be determined using the block explorer or the local wallet, and I hope that functionality will be implemented in future releases.

Now, the first point-of-interest concerning masternodes is that Masternode Count totals 1533, with -0.58% growth (9 less) over the past month. (Note: this is due to a wallet upgrade that took place a week ago, which temporarily disabled the masternode network.) This shows that the network is at least stable in its size. Secondly, ROI on masternodes for the following year works out around 60%, given the current number of live masternodes. Whilst figures on masternode statistics websites (like masternodes.online) show an ROI closer to 90%, this is not accounting for the changes in supply emission over the course of the year. Regardless, 60% is a solid reward; not too high, not too low. It’s about the sweet spot when looking for a good ROI on a masternode, especially when the above sections on average volume covering supply emission are taken into account.

This means that entries at current prices for those that can afford the ~$3,000 masternode are doubly-attractive, as the rewards from running the MN would serve to lower the average entry price with low probability for capital loss. This is further reinforced when taken into consideration with the fact that Bulwark is 96.3% below it’s all-time high.

Lastly, and most importantly, we must look at Masternode Network Value. A deeper explanation of this concept can be found in my dedicated article. Bulwark’s MNV can be calculated by multiplying the number of masternodes online  by the collateral size of one masternode by the price of Bulwark. With 7,665,000 BWK locked in masternodes, this gives us a MNV of $4.532mn. This is equal to ~55% of Bulwark’s Network Value, which indicates a strong masternode network. For context, I calculated ALQO’s MNV to be a little under 50% in a previous report.

Before we conclude this section with some analysis of the distribution of Bulwark, there’s some house-keeping to do with remaining metrics from the General sub-section. Let’s take a look at volume against network value: for both, Exchange Volume-to-Network Value, and its 30-day average, the figures come out at around a third of a percent. As I have mentioned in previous reports, this is likely due to the current bear market, as I tend to prefer positions in altcoins that exhibit a 1% or greater EVNV. For purposes of cross-comparison, ALQO had an Average Exchange Volume-to-Network Value of 0.18%, Covesting was 0.36% and GeoCoin was 0.13%. Relative to the others examined, Bulwark is showing stronger signs of interest.

Moving onto Distribution, Bulwark seems to outshine the vast majority of altcoins in this regard. As quoted earlier, Bulwark prides itself on its fair launch and its strong emphasis on decentralisation (a trait we also saw when studying ALQO). To that end, Bulwark’s top 10 addresses control a measly 5.2% of the circulating supply, the top 20 control 7.39% and the top 100 control 15.3%. For comparison, ALQO’s top 100 richest addresses control 15.77% of its circulating supply. Fair play, Bulwark. Fair play.

Let’s explore this distribution a little more thoroughly: 6 of the top 20 richest addresses have been inactive for the past 30 days; the 2nd-richest address has recently increased position size by over 25%; the vast majority of these top 20 addresses are either staking or collecting masternode rewards; the only address distributing recently was the 14th-richest. Overall, the rich-list points at current prices being a potentially good area for an entry.

And that concludes this section on Metric Analysis. Onto the Bulwark community:


Community:

There are two primary aspects of community analysis: social media presence and Bitcointalk threads. I’ll begin with the former before moving on to the latter.

Social Media:

Concerning social media presence, there are five main platforms to examine: Twitter, Facebook, Telegram, Discord and Slack.

Bulwark doesn’t have Slack, but is present on the other four. To begin, let’s look at the various social metrics that I calculated from the Bulwark Twitter and Facebook accounts:

Twitter Followers: 8319

Tweets: 733

Average Twitter Engagement (30-Day): 0.41%

Facebook Likes: 416

Facebook Posts (90-Day): 54

Average Facebook Engagement (30-Day): 2.16%

Using RivalIQ‘s benchmark report as a point-of-reference, as usual, Bulwark’s Average Twitter Engagement rate of 0.41% is 8.9x greater than that across all industries and 31.5x greater than the Media industry (the closest industry in the report). However, it is half the engagement being shown on Covesting’s Twitter, less than a third of the engagement on ALQO’s Twitter, but twice the Twitter engagement of GeoCoin. Overall, positive against the rest of Twitter, but mediocre within the altcoin space.

Bulwark also don’t seem to have put a whole lot of effort into growing their Facebook page (416 Likes) to a similar following found on their Twitter (8319 followers), despite posting 54 times on Facebook in the past 90 days. Clearly, the intention is there and there is commitment to providing updates but perhaps the marketing hasn’t been so effective on Facebook.

Also, concerning Facebook, Bulwark’s engagement rate is 2.16%. Of course, this higher figure is natural given the smaller audience, but let’s delve a little deeper: the average engagement rate across all industries is 0.16% – Bulwark is experiencing 13.5x greater engagement; the Media industry’s average engagement rate is 0.08% – Bulwark is 27x greater. Now, let’s compare it with the altcoins from previous reports. GeoCoin had a 0.08% engagement rate on Facebook, ALQO had a 3.43% engagement rate (though, similarly to Bulwark, the page had only a fraction of the audience of that of their Twitter account) and Covesting had a 0.16% engagement rate except with 50x more page Likes. Twitter and Facebook don’t seem to be Bulwark’s strong point, at least relative to other altcoins.

Moving onto Telegram, Bulwark’s group has 2178 members. Over the past week, I noticed around 60 or so individuals forming the bulk of the conversation (2.75% of the group). I also saw consistency in team-driven updates, which was great. The Marketing Director, Jack, clearly wants to make sure the community is aware of development progress. From the community’s side, the conversation was predominantly centred on support, with questions and issues being promptly and informatively answered by the team. There was some off-topic conversation between group members, which is not necessarily a bad thing as it shows that those individuals view the Bulwark Telegram group as a place for general conversation – they enjoy spending time there.

However, I would have liked to have seen more community-driven conversation concerning the future of the project, perhaps with suggestions and proposals and some community-led marketing. What was very promising, however, was the fact that the group was used to drive votes for a masternode competition, which led to Bulwark winning the competition and beating out Phore, Deviant and GINcoin. This win gives Bulwark a fee-free listing on a new exchange. Overall, 4 out of 5. If more of the group was engaging, this would be a 5.

To conclude this section on social media presence, let’s look at the Bulwark Discord group. The group has 5224 members and plenty of internal channels that are clearly segmented and defined. This makes the Discord user-friendly and easy to navigate. The Announcements channel is updating at least every other day recently, which is good to see. The Official Links channel is incredibly useful for new users, with a comprehensive list of resources and relevant links. Weirdly, Development Updates is barely updated but the Github channel sees at least two or three new commits a week. Most conversation, as would be expected, occurs in the General channel, occuring between ~50 members for the most part. As with the Telegram group, I would like to see more of the community involved in discussion. That being said, the channel is in near-constant conversation, with very few extended breaks over the past week.

With regards to improvements, I would like to see more action in the Content Creators channel – this is a great idea for a channel, as the greater the level of commitment from the community in creating marketing and promotional resources for the project, the broaders its potential user-base and the more likely Bulwark takes on a position of permanence in the space. Overall, a solid 4.

BitcoinTalk:

Bulwark launched its BitcoinTalk announcement on 2nd December 2017, and has generated 3016 posts across 151 pages of conversation during those 342 days. That works out at 8.8 posts per day on average. However, over the past 90 days, there have been 112 posts from 32 individual posters. This shows a decrease in activity of late. That being said, the team continues to display an excellent level of commitment to providing regular updates, with numerous posts concerning developments. Further, the thread is used to push more detailed updates via Medium blog posts. With regards to general conversation, it is a familiar story: promptly answered support questions but little community input on the future of the project. Again, a 4 out of 5.

And that concludes my analysis of the Bulwark community. Time to take a look at the project’s Development:


Development:

For the following Development analysis, I will be evaluating project leadership, the website, the roadmap, the whitepaper, the wallets and finally providing a general overview:

Project Leadership:

According to the website, there are 8 core team members, including multiple developers, branding and marketing specialists and a community manager. This is slightly larger than ALQO’s core team despite Bulwark’s lower Network Value, which is positive. There is a good breadth of areas of expertise and experience. One possible improvement would be to perhaps get someone from the community to join the core team as a marketer, providing community-led updates via some form of engaging content. I would imagine this would help to drive greater overall community engagement whilst also increasing brand awareness.

Website:

www.bulwarkcrypto.com

The website is great: it’s easy to navigate with sleek UI/UX; it is informative but concise, with a backlog of resources linked in their own relevant sub-sections; there is a dedicated blog that is regularly updated with long-form progress updates. However, the block explorer needs to be more fully-functional, with greater detail on the rich-list, as well as more information on transaction history. Despite that, it’s a 5 out of 5. It’s what you want from any altcoin website, really.

Roadmap:

www.bulwarkcrypto.com/roadmap/

The roadmap is the best part of the website, as there is a separate page for the present and future roadmap and a dedicated page with a full history of past developments. Let’s begin with the present and future roadmap. It is specific, detailed and ambitious, with clearly delineated quarterly goals. With four quarters of future goals planned out, there is plenty to look into.

This quarter (Q4 2018) sees a cohesive and comprehensive design framework being created to be used with all future applications, for the purposes of creating strong brand identity. What I like about this is that not only is there an explanation of the goal itself but also a justification for the work being undertaken. The rest of this quarter will see progress being made on a new block explorer, new local wallets and mobile apps, all for release in Q1 2019. Further, the Governance system will be integrated this quarter, and research & development is set to begin for the Aegis hardware wallet and the Citadel home router. Hardware development is no joke, and this is clearly a route that could distinguish Bulwark from their many competitors if it is met with success.

Moving onto Q1 2019, the New Year will see Bulwark incorporated as a business to allow for team expansion in line with the ambitious roadmap. It will also see the release of the aforementioned explorers and wallets and applications, alongside Bastion (a centralised exchange with Bulwark pairings). Most significantly, in my opinion, Q1 2019 will see the public release of their Aegis hardware wallet. This is a lot to do over the next 5 or 6 months, and perhaps they are putting a little too much pressure on themselves to deliver so much, but they do seem to be consistent with their delivery on promises so far.

Q2 2019 will see the Secure Home Node 2 released, which is a limited edition version of their already-released Secure Home Node (the first bit of hardware they manufactured earlier this year).

Q3 2019 culminates in the release of Citadel. Looking at this roadmap, there’s certainly a lot to look forward to, but I almost feel as though the workload of the first quarter could be more evenly distributed amongst the latter two in 2019; but, if they can deliver on those promises, that will be mightily impressive.

Concerning the dedicated page for past developments, this seems to be regularly updated with clear information and relevant links for further research. It shows the most recent and significant achieved goal of Zerocoin integration, along with the release of a Staking Script, a dedicated forum, the original block explorer, the first Secure Home Node release, the establishing of the Knowledge Base, the transition to Proof-of-Stake, the implementation of masternodes and the fair launch – all in the past 11 months. The roadmap scores a 5 out of 5.

Whitepaper:

https://bulwarkcrypto.com/docs/EN_-_Bulwark_Cryptocurrency_Whitepaper.pdf

What impressed me straight off the bat was the lack of wild dreaming in the whitepaper. One of the first statements made is that they “offer a simple value proposition with no grandiose promise: we will deliver a privacy coin that works today and into the future.” If more whitepapers could begin with a fair assessment of their strengths and potential, rather than with claims of never-before-seen innovation, that’d be great. As I talk about in my book, I want to buy altcoins that do the simple things well, more than anything else, and that continue to deliver on their promises. Of course, innovation must play a factor, but not everything is original nor should it be. The focus on “results rather than hype” is promising.

The prose is jargon-free and concise, thus readily accessible to those unfamiliar with cryptocurrencies, in general. Blockchain parameters are also clearly illustrated, including the initial premine of 489,720 BWK. A nod is given to PIVX and Dash, on which Bulwark was built, and the whitepaper states that the project will differentiate itself from other privacy masternode coins by focusing on fairness and decentralisation, unlike the majority of PIVX/Dash clones that were launched at a similar time.

Potentially unfamiliar terminology is clearly explained. However, there is a palpable feeling of genericness in the whitepaper. There’s no plagiarism, but there’s also nothing that stirs excitement or genuine interest whilst reading. What I do like is that there is a clear commitment to keeping the whitepaper up-to-date, as brief notes have been added in relevant sub-sections in line with the progress of the project. It makes a change from the static nature of most whitepapers.

A solid 4.

Wallets:

With regards to wallets available, there are three local wallets (Windows, Linux and Mac), functionality for the Raspberry Pi 3, and a paper wallet generator.

The Windows wallet is functional and easy-to-use, if a little bare and bland (a bit like the whitepaper). It kind of looks like a Windows 98 application at present. I’m just poking fun, but I would imagine this will be rectified with the release of the new wallets and the design framework. Overall, it does work well and it uses very little CPU, but it doesn’t say much about Bulwark. 3 out of 5.

General:

In general, the development of Bulwark is promising. The project began with little ambition besides being a fairly-launched privacy coin that remained consistent, and it has since evolved into grand ambitions of manufacturing its own hardware wallets and other security-based kit. It is in this hardware development that I think Bulwark can really get an edge over its competition.

Where, at present, the project is funded partly via the premine but primarily via the team and community, over the coming months the project will secure funding via the Governance system (10% of block rewards) for proposals backed by the community and also from hardware sales. Funding is vital to survival in this space, and the revenue stream that could come into play when the hardware starts rolling out could be huge. Hardware wallets, in particular, are in huge demand, and there are only really three or four key players currently in the game. Watch this space…

That concludes this final fundamental section. Onto the chart:


Technical

Bulwark, as mentioned previously, has only 11 months of price-history. In fact, it has 339 days of price-history. 252 of those days have been spent inside one of the longest ranges I’ve ever seen… price has been bouncing between 9-18k satoshis for the best part of Bulwark’s existence, holding that range through mass supply emission and a macro bear market.

Bulwark is currently looking as though it wants to break below that range support, if only briefly, and is trading within a couple % of its all-time low. The fact of the matter is that there has quite literally never been a cheaper entry for this coin; but, at the same time, breaking below a support level that’s been strong for 36 straight weeks wouldn’t be the best. There is a chance that the level gives way in order to form a spring and return back into the range shortly afterwards, and, for those with lower risk-tolerance, it would perhaps be the wise thing to do to wait for that before entering.

Similarly, one could enter a position at these prices and set a soft stop loss around 8000 satoshis, in case of a Daily close at or below that level (10% below the current all-time low). Those are two possible low-risk approaches. My preferred method for midcaps is to allocate a fixed % of capital at an average entry that one is comfortable with (all-time lows are perfect for this). Then just allow time to prove you right. The downside to this is obvious: if 9k gives way without swift reclamation, we could see price bleeding down into uncharted territory. Either way, there is a lot of scope for growth from present prices; especially since the previous all-time high came one month into Bulwark’s existence, when there was little to no progress.


Conclusion

As per usual, this report has crossed the 5,000 word mark, and it’s time to draw it to a close.

My final grading for Bulwark is 4 out of 5. There was a lot that impressed me; but it also evident that there’s room for improvement in some critical areas, particularly around community engagement.

I hope this report has proved insightful and that you’ve enjoyed the read! Please do feel free to leave any questions in the Comments, and I’ll answer them as best I can.


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Market Outlook #10

Market Outlook #10 (11th November 2018)

Hello, hello. Today marks the 10th consecutive week of publishing these Market Outlook posts, and, given that milestone, I’ve decided to write up a stonker. In the following post, I will take a look at the past week’s movement in Bitcoin, Monero and Ethereum, as usual, but will follow those up with analysis of five altcoins that have never been discussed within this series of posts. Now, it’s important to stress that the analysis is exclusively technical. That being said, the alts I’ve selected are primarily largecaps, and thus they trade with ample volume and liquidity to assure the validity of the analysis (unlike lowcaps or microcaps with equivalent charts that are more prone to deviating from what makes sense). Long story short, there’s a lot of opportunity floating around at present, and the alts I’ll be looking at in this report are Qtum, Gifto, Waves, Komodo and Wings. As you’ll see, they share many technical parallels, though I can’t vouch for such equivalence in fundamental strength.

Anyways, on with the show.

Bitcoin:

Price: $6389.16

Market Cap: $110.982bn

Thoughts: In last week’s Market Outlook, I spoke about the low-volume pullback and trendline retest being textbook, anticipating a a bounce this past week. We got the bounce but price is still struggling to reclaim the ~$6550 level, which is critical in shifting short-term market structure from its present chop to a bullish state. The key support remains around $6300, and that level has held despite the more recent pullback from the short-term resistance. We have also formed a higher swing-low, which should serve to drive price above that significant pivot level. The Daily chart looks as though a reversal is imminent – perhaps in December we’ll see that resistance at $8500 tested with the launch of Bakkt acting as a catalyst. The overall picture remains positive with key support intact.


Monero:

XMR/BTC

Price: $103.35 (0.0162 BTC)

Market Cap: $1.711bn (268,508 BTC)

Thoughts: The Daily XMR/BTC chart is very interesting, as we managed to close above the recent swing-high at 0.017 BTC on rising volume, but swiftly lost all ground and returned to the short-term range. Volume on the pullback, however, has been decreasing with each day, with price now trading inside a bullish orderblock above resistance turned support at the breakout level of 0.0155 BTC. This is a critical turning point. The volume action implies that we should form a higher-low around here and make another attempt at breaking out of the range, and, ideally, maintaining the breakout level.


Ethereum:

ETH/USD

ETH/BTC

Price: $211.75 (0.033 BTC)

Market Cap: $21.838bn (3,426,123 BTC)

Thoughts: Last week, I mentioned that the unusually low volatility would likely be followed by dynamic movement. Ethereum has led the charge regarding price-action this past week, with an explosive breakout from the range on significant volume. This has occured against the Dollar and against Bitcoin, and both breakout levels have held firm. The recent pullback on ETH/USD has been on near-zero volume, and a series of higher-highs and higher-lows have been formed, confirming bullish market structure. Given that the breakout level continues to hold, I’d expect another 10-15% move up over the next couple of weeks.


Qtum:

QTUM/USD

QTUM/BTC

Price: $3.89 (60978 satoshis)

Market Cap: $345.987mn (54,288 BTC)

Thoughts: I want to preface this section by stating that I have absolutely no idea what Qtum is. Now that that’s out of the way, behold the beautiful chart and the immense upside potential on a serious largecap. Rarely do you see the possibility of a 2000% return on a $345mn altcoin, but that is exactly what is presented to us here. A clearly defined accumulation range is apparent on the QTUM/USD chart, with one 24-hour period trading almost $10mn-worth of Qtum. Further, QTUM/BTC has been range-bound for 10 weeks, and is currently trading inside the bullish orderblock that preceded its insane bull cycle in December 2017. Volume has been rising for each of the past three months, and range resistance and support continue to be respected. Bullish.


Gifto:

GTO/USD

GTO/BTC

Price: $0.06 (992 satoshis)

Market Cap: $33.617mn (5,274 BTC)

Thoughts: Similarly to Qtum, but on a smaller scale, Gifto is also experiencing a large amount of volume within a tight price range. Where QTUM traded 2.69% of its circulating supply in one day, Gifto traded almost 9%, and is currently priced only ~20% above its all-time low. There are clear levels of resistance to potentially set sells at should a reversal come, and there is over 1500% of growth to occur before the USD all-time high gets broken. Again, not a clue what Gifto is, but if it even has remotely decent fundamentals, this looks like a solid buy.


Waves:

WAVES/USD

WAVES/BTC

Price: $1.75 (27328 satoshis)

Market Cap: $175.377mn (27,328 BTC)

Thoughts: Now, a more familiar altcoin: Waves. Waves is currently trading at clear long-term support against the Dollar, with very little support beneath. Should price fall and close below $1.60, it would make sense to exit any position. But, for now, that level continues to hold strong. WAVES/BTC is currently experiencing a near-zero volume pullback towards short-term support around 24000 satoshis. That’s only ~10% below current prices, which is minor downside risk.


Komodo:

KMD/BTC

Price: $1.17 (18423 satoshis)

Market Cap: $129.882mn (20,376 BTC)

Thoughts: Komodo is in a really promising area, current trading at the lowest price that preceded the January highs. KMD/BTC has formed a range between 14k-22k satoshis, and experienced ~$10.4mn worth of supply exchanging hands within a few days, with price respecting range resistance. Price has since returned to the equilibrium of the range on low volume.


Wings:

WINGS/BTC

Price: $0.19 (3000 satoshis)

Market Cap: $17.148mn (2,691 BTC)

Thoughts: Wings is another familiar altcoin, and one that is exhibiting perfect price-action. Firstly, price formed a 10-week range, during which volume was constant. Then price broke out of the range on very high volume, with 13.75% of the circulating supply being trading during the breakout. Price then remained above the breakout level, formed a lower swing-high, and then retested the the former resistance now turned support. This recent retest saw price bounce hard on even higher volume, with 24.3% of circulating supply traded, and a clear series of higher-lows and higher-highs have formed. Most bullish.

That concludes the milestone 10th Market Outlook. I think this has been an eye-opening one for myself regarding current opportunities amongst largecaps, as I tend to stick to midcaps and lowcaps. I hope you’ve found some value in it, too! Let me know what you think.


If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. Just submit your email and I’ll make sure you’re included in the list. Cheers.

Coin Report #3: Covesting

Welcome to the third Coin Report. In today’s report, I’ll be examining in exhaustive detail the fundamental and technical strengths and weaknesses of Covesting, concluding with a grading of the project and its upside potential. And when I say ‘exhaustive’, I mean it. The previous two reports on GeoCoin and ALQO ran for ~4,000 words and ~5,000 words, respectively; this report may run for 6,000. I hope you’ll find some degree of insight in it.

Let’s crack on.


Introduction

Covesting is one of only three ICOs I have ever invested in. The entire concept of an ICO has always felt a little worrying to me as a speculator, and this was particularly the case during the ICO boom of summer 2017. Projects were raising hundreds of millions of dollars with no working products, dubious credentials and little-to-no innovation or viable use-case. And when you’ve raised $100m or more, where is the incentive to work? That was the primary reason for me steering well clear of ICOs and sticking to the near-zero or zero premine Proof-of-Work and Proof-of-Stake projects for the majority of 2017. Further, a lot of the ideas conceptualised and developed by ICO projects were also being explored by non-ICO projects, so there seemed to me to be no real advantage for the purposes of speculation; the reward-to-risk was greater for the more traditional coin launches.

However, in late November or early December 2017, I came across www.covesting.io. On the website, I found details of an imminent ICO for a copy-trading platform by the name of Covesting. Up until this point, I was unaware of any copy-trading platform for cryptocurrencies, but I knew that many in the space (myself included) used 1Broker for copy-trading BTC/USD, forex and commodities. There was a clear gap in the market, and I had been waiting for something similar to 1Broker to come along for altcoins, specifically. What I gleaned in my first impressions of Covesting was the potential for a far superior and more comprehensive, feature-rich platform than that of 1Broker. The thing that worried me was the ICO; but I knew that non-ICO projects weren’t working on copy-trading, possibly because of the capital-intensive nature of building a trading platform. Anyway, I was interested, and so I read the whitepaper to get some more details on the ICO (details I will go into later in the report). Long story short, Covesting was only looking to raise a maximum of ~$12.5mn at the time, with a 25,000 ETH hard cap. This was significantly lower than the vast majority of the ICOs I had seen, and the fact that only 13% of the tokens created were going to the team cemented my confidence in the project. There were Proof-of-Work coins launching with larger premines than 13%, and most ICOs were dishing out 25% or more of tokens to their founders. So, I bought the ICO at what worked out at roughly 5000 satoshis per COV, and I’ve been buying more over the past two months.

That’s enough back-story. Covesting as a project has innumerable points-of-interest for those of us looking for low risk, high reward opportunities in this space, and I hope that this report proves thorough and objective in establishing the project’s strengths and weaknesses.

For those that would like to learn a little about Covesting prior to reading the report, here are some important links;


Fundamental

General:

Name: Covesting

Ticker: COV

Algorithm: ERC-20

Sector: Exchange Platform + Social Trading

Exchanges: KuCoin, IDEX and HitBTC

Covesting was launched in November 2017, with its ICO selling out in its entirety on December 31st 2017. It launched, as with the vast majority of ICOs, as an ERC-20 token, and happened to get its first exchange listing when the entire market peaked in January, and, as such, has suffered a downtrend in price for the best part of its existence. We’ll dive into the limited price-history in more depth in the Technical section, but for now it is important to note that Covesting is yet to experience a full market cycle.

The project seeks to be the leading social trading platform in the cryptosphere, and a one-stop point-of-reference for all traders and investors in the space. At launch, there were no other similar, established projects. However, there have since been a number of potential competitors introduced: Blockport, Genesis Vision and Qobit come to mind. I am of the opinion that competition isn’t necessarily a disadvantage for those of us looking to capitalise on innovation in this space, as there is undoubtedly enough volume to be shared amongst a handful of social trading platforms; but it does put the onus on Covesting to deliver and surpass its promises in a consistent manner. I’ll evaluate their strengths in this regard a little later…

Regardless, the ambition is great, and the use-case is novel. Let’s see if Covesting is hitting the mark:

 


Metric Analysis:

Below are listed a number of significant metrics that will be analysed at the end of this section. Firstly, it is important to note that metrics are dynamic, and this information is accurate as of 4th November 2018. Secondly, if any of the recurring terms in these reports are unfamiliar, you can find brief explanations in the opening paragraph of this section on the first Coin Report I wrote. Lastly, the rich-list was examined using https://etherscan.io/token/0xe2fb6529ef566a080e6d23de0bd351311087d567#balances.

Metrics:

General:

Price: 13130 satoshis ($0.84)

Exchange Volume: $93, 476

Circulating Supply: 17,500,000

Total Supply: 20,000,000

Maximum Supply: 20,000,000

% of Max. Supply Minted: 100%

Network Value: 2297.75 BTC ($14.616mn)

Network Value at Max. Supply: $16.704mn

Category: Midcap

Exchange Volume-to-Network Value: 0.64%

Average Price (30-Day): $0.70

Average Exchange Volume (30-Day): $52,522

Average Exchange Volume (30-Day)-to-Network Value: 0.36%

Transactional Volume (24H): $40,486

Transaction Count (24H): 30

NVT: 361.03

Average Transactional Volume (7-Day): $7,498

Average NVT (7-Day): 1949.43

Transactional Volume-to-Exchange Volume %: 43.31%

% Price Change USD (30-Day): +47.9%

% Price Change USD (1-Year): N/A

USD All-Time High: $2.38

% From USD All-Time High: -63.10%

Founders’ Tokens % of Max. Supply: 12.5%

Founders’ Token Location: https://etherscan.io/address/0x25ed4f0d260d5e5218d95390036bc8815ff38262

Liquidity (calculated as the sum of BTC in the buy-side within 10% of current price across all exchanges): 4.61 BTC

Liquidity-to-Network Value %: 0.2%

Supply Emission & Inflation:

Block Reward Schedule: No further supply emission

Annual Inflation Rate: 0%

Distribution:

Address Count: 10189

Supply Held By Top 10 Addresses: 33.08%

Supply Held By Top 20 Addresses: 38.79%

Supply Held By Top 100 Addresses: 54.21%

Inactive Address Count in Top 20 (30 Days of No Activity): 12

Analysis:

Though the lack of staking or masternode functionality, and the fact that the maximum supply has already been minted, means that this section is a little less stacked than that of ALQO, there is still a lot of important information to look at. The Covesting whitepaper states that COV will serve as the fuel for the Covesting platform, making it, in essence, a utility token. In doing so, its value will be tied to demand for use of the platform. As such, which of the above metrics are most significant? Well, the greatest metric to determine the strength of COV would be the volume being traded on the Covesting platform, but, until the fully-functional public release comes out later this year, we’ve little to go on. There are, however, many points-of-interest for those of us looking to turn a profit on COV, particularly at its present price.

Let’s begin with the General metrics, before moving on to discuss the lack of supply emission and the distribution of the token. One of the primary means of determining interest is studying the volume traded, both Exchange Volume and Transactional Volume. Covesting traded ~$93k in the last 24 hours, or 0.64% of its Network Value. As expressed in my article on Picking Out Microcaps, I tend to prefer when Exchange Volume-to-Network Value is above 1%, as a sign of smart-money interest, but given that we are currently in a bear market, such figures are unlikely to be the norm. (Also, Covesting is not a microcap; it’s a midcap.) In my previous two reports, these figures were 0.24% and 0.28% for ALQO and GeoCoin, respectively. Covesting is trading at well over double these levels. Promising. Now, if we take a look at the Average Exchange Volume, which is measured over the course of a month, we get a lower figure of ~$52k, or 0.36% AVNV. Comparing this with ALQO’s 0.18% and Geocoin’s 0.13%, we once again find relative strength in COV. However, given that Covesting is listed on KuCoin and HitBTC (two of the larger exchanges in the space), I am a little disappointed that it isn’t hitting ~0.5% or greater AVNV. But, all things considered, there certainly seems to be some interest, and this is something we will later confirm in analysis of the rich-list. Now, if we turn to Average Price, we find that COV has traded at an average of $0.70 for the past 30 days, and is currently trading ~20% above that. This tells us that Covesting was possibly being accumulated around $0.70, and that the uptick in volume recently has brought with it the beginnings of a reversal.

Perhaps the strongest figure amongst that list of metrics is that of % Max. Supply Minted. Covesting being an ERC-20 token that launched with an ICO, this figure is 100%. That means zero supply emission post-launch, and thus zero inflation. One of the most common pitfalls I see in the space is the complete disregard of inflation when considering the price at which one should enter a position. Too often do you find faux-opportunities where everything is lined up technically for an entry, but the price you think you’re paying isn’t really the price you pay. This is due to excessive short-term supply emission – a high inflation rate – that generates strong headwinds to push back price growth. Just look at ZCash, for example. The one advantage that the majority of ERC-20 ICOs have for us, as speculators, is that they have zero inflation post-launch. No need to worry about mass supply being dumped on the market on a daily basis with potentially too little demand to maintain current prices. Returning to COV, what this also allows us to determine is the level of demand. As there is no more COV coming onto the market, if the current level of volume traded was unable to sustain prices, we would know that this is due to falling speculative interest; not because miners or stakers are dumping their rewards. In Covesting’s case, not only has price been maintained over the previous month, but it is beginning to pick up. Further, if we look at the Liquidity figure of 4.61 BTC, or 0.2% of Network Value, we find that demand at current prices seems to be greater than that of ALQO and GeoCoin, which exhibited 0.12% and 0.18% Liqudity, respectively.

Concerning NVT, Covesting scores 361.03, with ~$40k of Transactional Volume in the past day. Over the past week, Covesting has an Average NVT of 1949.43, with Average Transactional Volume of $7,498. Now, until copy-trading launches on the Covesting platform and COV begins to be transacted for its primary purpose and to its full extent, these figures are to be taken with a pinch of salt. However, it is interesting that in the past 24 hours, COV has experienced over 5x greater Transactional Volume than it has averaged over the past week. With that greater Transactional Volume, we have seen increased prices. Perhaps a sign of things to come when the platform is publically launched and COV takes on the function of its design?

Moving onto the last couple of points-of-interest in the General metrics, I found it intriguing that Covesting is currently trading around -63% from its all-time high of $2.38 (according to CoinGecko). This has both positive and negative connotations regarding profit potential. Firstly, the vast majority of altcoins are trading well below -90% of their all-time highs at present, even with the recent signs of reversal. At its lowest, Covesting traded at -76% of its all-time high. This shows strength via the genuine demand for the token, even at the deepest, bloodiest period of the current bear market; even when Ethereum itself had lost 78% of its value against BTC. Very promising. However, the risk that this brings with it is that we pay a higher price for entry, and calculable upside potential (a move back to the all-time high) is diminished. What is great about buying coins at 96% below their all-time highs is that the reward-to-risk is so high, providing the fundamentals are sound. With Covesting, we find genuine demand for the token at the worst of times, but for that we must risk paying more.

How I think this plays out, however, drawing back to something I said earlier about the limited price-history, is that there is a great deal of price discovery to be experienced above and beyond the all-time high, particularly upon successful launch of the platform and the arrival of a new bull cycle for the market. That being said, calculable upside potential puts us at around 130% given an entry at current prices. Price is currently 47% above the all-time low. This gives a calculable reward-to-risk ratio (if the position was to be sold at break of the all-time low) of 2.76. It could be better, it could be worse. Personally, I believe the upside potential to be much greater than that which we can view from Covesting’s price-history, for reasons that I’ll delve into in later sections.

Before we get onto more abstract fundamentals, let’s do some distribution analysis. Covesting currently has 10189 holders. If all of those end up users of the platform, we could be in for a treat. For comparitive purposes, Genesis Vision and Blockport (two potential competitors) have 7237 and 11849 holders, respectively. Covesting is well ahead of Genesis Vision – despite COV having a Network Value of around a third of GVT – and around 17% below Blockport, despite having a Network Value around 2.5x that of BPT. Based on this comparison alone, this would place Genesis Vision as highly overvalued, Covesting as reasonably valued, and Blockport as undervalued.

Returning to analysis of Covesting, specifically, the supply seems fairly well distributed, if you account for the founders’ 12.5% (essentially a premine). Not accounting for that 12.5%, the distribution is as follows: 33.08% of COV held by the top 10; 38.79% held by the top 20; and 54.21% held by the top 100. You can just subtract 12.5% from those figures if you want distribution figures accounting for the founders’ reward. Either way, it’s not poorly distributed. There are certainly signs of accumulation amongst the top 10 and top 20, as they control around a third of the supply, but a little under half the supply is distributed outside of the top 100 addresses.

Let’s dig a little deeper:

Of the top 20 addresses, 12 have been inactive for the past 30 days; they are neither accumulating or distributing COV at present. Of the other 8 addresses, only the 12th-richest is distributing, and the distribution over the past 30 days accounts for less than 1% of the total balance. The rest are primarily micro-buying. Further, the 12.5% founders’ reward remains untouched. This, to me, indicates that the majority of the top 20 are content with their positions, though there is some active accumulation at current prices from a few. I look forward to monitoring any changes as price rises.

That concludes my analysis of the metrics. Onto the Covesting community.


Community:

There are two primary aspects of community analysis: social media presence and Bitcointalk threads. I’ll begin with the former before moving on to the latter.

Social Media:

Concerning social media presence, there are five main platforms to examine: Twitter, Facebook, Telegram, Discord and Slack.

Covesting doesn’t have Slack or Discord, but is present on the other three. To begin, let’s look at the various social metrics that I calculated from the Covesting Twitter and Facebook accounts:

Twitter Followers: 9159

Tweets: 363

Average Twitter Engagement (30-Day): 0.79%

Facebook Likes: 20885

Facebook Posts (30-Day): 27

Average Facebook Engagement (30-Day): 0.16%

In the previous two reports, I referred to RivalIQ’s social engagement benchmarks. Let’s look at how Covesting fares in this regard: firstly, Covesting’s Average Twitter Engagement is 0.79%. This is 17x greater than the average engagement rate across industries, and almost 61x greater than that of the Media industry. Going back to previous reports, Covesting has an average engagement rate on Twitter around two-thirds of that of ALQO but over 4x greater than that of GeoCoin. Where both those coins failed, however, was on Facebook. Covesting has no such failure, publishing at a rate of almost a post a day for the past month, with 20,885 Likes and an Average Facebook Engagement rate of 0.16%. This is the exact average engagement rate across industries for 2018, and double the average engagement rate of the Media industry.

Moving onto Covesting’s Telegram group, the project boasts 7661 members (around 5x ALQO’s group size). Having spent some time evaluating the level and depth of discussion occuring, there seems to be hundreds of daily messages between members, with the group conversing almost 24/7. Much of he conversation centres around excitement for the public release of the platform, which is good to see, and the remainder comprises of support questions being swiftly answered. 5 out of 5.

BitcoinTalk:

The BitcoinTalk thread was created December 28th, 2017; a few days before the conclusion of the ICO. It has since generated 42 pages of discussion, and 822 individual posts. Over the past 90 days, there have been 64 posts by 23 individual posters; a post-to-poster ratio of 2.78. There is less recent discussion on the thread than in the ALQO or GeoCoin threads, which generated 140 and 94 posts for the preceding 90-day period from which those reports were published. However, the discussion is inquisitive, and queries are responded to quickly and informatively. There are a lot of consistent development updates being pushed out, also, with relevant links to lengthier, more thorough updates via the Covesting Medium blog. One thing I did spot that was a little fishy was the appearance of multiple posts with similar messages, all from new accounts. This is likely someone invested who is attempting to articificially generate enthusiasm about the project.

All-in-all, my impression of the Covesting community is that it is a large one with genuine interest towards the future of the project, in particular the release of the platform. Many seem to be itching to copy-trade altcoins.


Development:

For the following Development analysis, I will be evaluating project leadership, the website, the roadmap, the whitepaper and finally providing a general overview. No wallet evaluation is required as Covesting is an ERC-20 token, and can be stored in the plethora of Ethereum wallets.

Project Leadership:

The Covesting team is potentially the greatest asset to the project, and certainly one of its fundamental strengths. The executive team comprises of 3 heavily-experienced professionals: Dmitrij Pruglo – an ex-Saxo Bank trader and Covesting’s CEO; Tim Voronin – an early adopter of Bitcoin, a prop trader with over a decade of experience and Covesting’s COO; and Kurt Carlsson – an ex-Executive Director of Saxo Bank with over 25 years of experience and Covesting’s CCO. The executive team certainly has the experience and credibility required for the successful development and launch of a copy-trading platform. Further, there are 18 employees listed on Covesting’s LinkedIn, though 25+ employees are reported to be on the team on the website. 40+ employees are reported to be on the team in the October Review published by Covesting recently. Lastly, there are 8 vacancies listed on the website in an array of roles. I really like that the Covesting team continues to expand; and the depth and breadth of knowledge and experience seems sufficient for the ambitions of the project. Very promising.

Website:

Covesting.io is informative and easy to navigate. I particularly like that there is a dedicated blog with regular, long-form updates. The Crypto Intelligence portal is very useful, acting as, as stated in the whitepaper, a “Bloomberg terminal” for cryptocurrencies. There are social features, an altcoin screener, integrated TradingView charts and a regularly updated newsfeed. Further, there are free courses on trading for beginners and blockchain basics in their Academy. This all serves, in my opinion, to increase accessibility and ultimately the utility of the project for end-users. The platform itself (ref link, if you’d care to use it), though not fully launched yet, is smooth and well-designed. It is feature-rich, providing reports of all sorts, messaging and chat functionality, a dashboard with easy portfolio tracking and performance measurement and integrated TradingView charts for the exchange. I very much look forward to trying it out when it is fully-functional.

Roadmap:

There is no dedicated and permanent roadmap to be found on the Covesting website, but there are abstract forms of one that appear in blog updates and in the whitepaper itself. In this recent post, you can find a run-through of present and future goals. It seems the project was running a little late on deadlines, but this can be forgiven as much of the roadmap hinged on the issuance of a DLT License. This license was recently issued, around Covesting’s 1st birthday. Looking at the roadmap provided, the Beta launch of the platform was achieved on time, and the trading competition they hosted recently ended. Further, KYC integration is complete. A referral program has recently been launched with the imminent arrival of the public release of this platform. (You can sign up either using my ref link or via https://covesting.io/exchange.) According to the roadmap, this launch will be followed by initialisation of copy-trading functionality a month later, so that there is some trading history. Lastly, the buy-back program (which we’ll discuss at length later) will be launching this quarter alongside fiat gateways. Overall, the actual goals and targets of the roadmap are excellent, and they create a great deal of excitement about the potential of the project. However, I would have liked to have seen a dedicated roadmap on the website with specific and clearly delineated goals in a visually appealling manner. The website is the first point-of-reference for many new users, and this would ensure ease-of-access.

Whitepaper:

Here is a link to the Covesting whitepaper, for those that would like to read it prior to this section: https://covesting.io/static/Covesting_White_Paper.pdf

The Covesting whitepaper seems to be written a little like an Annual Report by a publicly-traded company, minus the balance sheets. It’s no surprise given the background of the team. The material is mostly professional but there are grammatical errors here and there; proofreading should have been done to a greater degree. However, this doesn’t detract from the jargon-and-buzzword-free prose that pervades most ICO whitepapers.

The first point-of-interest for me comes in the clear explanation of the benefits of aggregrated liquidity, which will be a feature of the Covesting platform. Aggregated liquidity will ensure the best possible prices for traders and will remove the necessity for multiple exchange accounts. That’s a plus in my book. Next, the whitepaper states that the Covesting platform will provide 24/7 live support. This, for me, is a big tick, as exchange support in this space is notoriously poor. If Covesting can deliver on this promise, that alone would distinguish the platform from the competition. Moving on, I like that the goal of the project is clearly depicted: Covesting, in essence, would like to be a one-stop comprehensive ecosystem for crypto-traders.

The value proposition for the platform is that it will allow traders
to increase earnings via “success fees”. It will also users to safely and securely follow the trades of those traders based on historical performance and their own goals, without ever having to give their funds
to others directly. Fully peer-to-peer. The financials for copy-trading break down as follows: 18% of followers’ profits are given to traders (this is the success fee); the platform takes 10% as commission; end-users take the remaining 72% as their profits. All profits are given in COV.

Concerning the ICO, the details are made transparent: 12.5% of 20mn COV tokens (2.5mn) go to the team; 75% is distributed via public ICO; and the remainder is distributed via pre-ICO, marketing, bounties and advisors. One point to highlight is that, for an ICO, this is a very small portion of tokens being given to the team. Further, proceeds of the ICO are stated to be distributed as follows: 40% to R&D; 25% to marketing and acquisition; 30% to capital expenses; and 5% to legal fees. You can find further info in the document.

Lastly, the use-cases clearly of the token itself are outlined: COV is used to copy-trade and any profits are returned in COV. 50% of revenue generated by the Covesting platform will then perpetually be used in a buy-back-and-burn mechanism, reducing the circulating supply over time. We will go into more detail on how I think this plays out in a later section.

Overall, the whitepaper is highly detailed and thorough, with visuals that ensure accessibility, but perhaps it needs an update given the past twelve months of progress and change. 5 out of 5 (just about – I’m forgiving the grammatical errors).

General:

Generally speaking, there is a lot going on at the present time for Covesting. They’ve recently achieved some of their significant goals, such as the Beta release of the platform, hosting their trading competition, the launch of their iOS app, and, most critically, the issuance of their DLT License. Moving forward, if Covesting can maintain this professional approach, it can only get better. They have their public platform release this quarter, which will bring with it copy-trading functionality and the buy-back-and-burn scheme. Also, they’re planning on an Android app release soon. Looking much further ahead, the goals don’t get any smaller: there is talk of derivatives being launched; algorithmic trading; and a global marketing campaign focused on institutional investment.

I mean, the distingushing feature of the project is, of course, the DLT License. This is what sets Covesting apart from its competitors. Perhaps there is good reason why the 1st result on Google for a search of “crypto copy-trading” is the Covesting website. I look forward to seeing the next few months unfold.

Regarding the funding structure of the whole project, it seems to me their revenue is presently set to comprise of trading fees, deposit fees and copy-trading commission. There is also talk of introducing binary options as another future revenue stream, as well as generating commissions on the trading terminal.

Other:

Now for some final thoughts on Covesting’s fundamentals, and, more importantly for us, the value of the COV token.

So, the main point-of-interest regarding the value of COV is that of the buy-back mechanism. Let’s look at how this may play out in the future with some examples:

If the Covesting platform becomes a top 100 exchange by volume on Coinmarketcap, it will trade, on average, $1.5mn daily. This would equate to $45mn of monthly volume, which would equal $90,000 in trading fees at a 0.2% average fee. 50% of these fees will be used to perpetually buy and burn COV, which would equate to $45,000-worth. At the current price of $0.84, this equals ~53,500 COV bought and burnt monthly, or 0.3% of the circulating supply.

If Covesting ends up in the top 50, it will trade, on average, $20mn daily, or $600mn monthly. This would equate to $1.2mn in trading fees at a 0.2% average fee, which would equal $600k in monthly buy-backs. At the current price, this is ~715k COV bought and burnt monthly, or 4.08% of circulating supply.

If Covesting ends up a top 20 exchange by trading volume, it will trade $95mn daily. This is $2.85bn of monthly volume, which equals $5.7mn in trading fees at a 0.2% average fee. That equates to $2.85mn monthly buy-backs, which is around 3.39mn COV at current prices, or 19.38% of circulating supply.

Now, there are several caveats. Firstly, this is only accounting for trading fees generated; not copy-trading commissions or deposit fees. Secondly, this thought experiment assumes a constant price irrespective of the volume of buy-backs. In practice, this wouldn’t happen, and the liquidity would not be there for such a volume of buy-backs without significantly raising the price of COV.

Regardless, it is easy to see how a successful launch of the platform and a future marketing campaign for user acquisition could lead to a dramatically higher value for COV based on buy-backs alone.

That concludes my fundamental analysis of Covesting. Onto the technicals.


Technical

As I mentioned earlier, there is limited price-history for Covesting, as it has only been in existence for a year, and has only been traded for ~10 months. That being said, there are numerous points-of-interest on the chart. Firstly the all-time high was one of the first prices ever traded for COV, which implies a huge amount of potential price discovery were a new bull cycle to begin. Secondly, the 3-month downtrend was recently broken in explosive fashion on announcement of the DLT License being issued. Price had previously traded back into an area of former accumulation, right at the all-time low. Price has since sustained the breakout, and has consolidated above a significant pivot level (a level that has shifted from support to resistance numerous times) at ~10k satoshis. There is significant long-term resistance around ~15k satoshis, and a close on the Daily above that level would indicate that new highs are incoming. As stated earlier, calculable reward-to-risk of an entry at current prices is 2.76, but I certainly won’t be selling my position at the break of the all-time high.


Conclusion

I believe I’ve covered quite a lot of ground in this report, and, having now garnered a better idea of the experience of the team behind Covesting, I’m eagerly anticipating future developments.

My final grading for Covesting is a solid 4 out of 5. There is so much fundamental strength that it would be easy for me to grade Covesting a 5, but I am reminded that this is not merely a fundamental report; we are speculators, and thus the technicals, and specifically the reward-to-risk, become a key factor.

Please let me know if you’ve enjoyed this third Coin Report; which sections you found most valuable; where you’d like me to develop further/refine/improve etc. And feel free to leave any questions in the Comments section and I’ll get back to you. Oh, and sign up for the mailing list if you want these delivered direct to your inbox!

Lastly, I know I mentioned it earlier, but I’d really appreciate it if, if you’re interested in the Covesting platform, you could sign up using my ref link: https://www.covesting.io/?ref=42416. Of course, there’s no obligation to do so, and I hope you’ve enjoyed the report!


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Market Outlook #9

Market Outlook #9 (4th November 2018)

Today’s Market Outlook sees us return to some short-term analysis of Bitcoin, Ethereum and Monero, followed by a couple of opportunities I’ve spotted in Vertcoin and Shield. In last week’s Market Outlook, I omitted analysis of ‘the usual three’ in place of a handful of altcoins, as market conditions were unusually stable. I can’t say things have gotten much more exciting since, but there are a few points-of-interest to discuss. The exciting price-and-volume-action seems to be occuring more frequently amongst lowcaps and midcaps at present, and, as such, I believe there is a lot to look forward to this winter in that sector of the market. Vertcoin and Shield are just two of the plethora of opportunities I’m seeing on a daily basis.

Anyway, on with the show:

Bitcoin:

Price: $6411

Market Cap: $111.288bn

Thoughts: Bitcoin’s breakout from the long-term trendline resistance has been followed by a low-volume pullback and trendline retest. This is textbook. In doing so, it has receded into the 4H bullish orderblock that led to the initial breakout, and has since formed short-term trendline resistance which it is battling with at present. A break and close on the 4H above $6500 would shift short-term market structure to bullish from its present bearish state.


Monero:

XMR/USD

XMR/BTC

Price: $106.57 (0.0167 BTC)

Market Cap: $1.763bn (276,924 BTC)

Thoughts: XMR/USD, as anticipated in Market Outlook #6, has formed a new range with resistance at prior support of $111. Following Bitcoin, it has since moved back into the 4H orderblock and bounced on gradually increasing volume. At present, we are still very much seeing chop, and the $111 level would need to be reclaimed in order for things to begin looking bullish again. Switching to XMR/BTC, the most important level (0.016 BTC) continues to hold strong, with a new range having formed with it as support and 0.017 BTC as range resistance. As long as that original breakout level holds, market structure is bullish.


Ethereum:

ETH/USD

ETH/BTC

Price: $200.73 (0.0315 BTC)

Market Cap: $20.673bn (3,246,326 BTC)

Thoughts: Lots of clean market structure on ETH/USD. Liquidity has been cleared below and above short-term swing-lows and highs, respectively, and price is currently grappling with a significant level of resistance turned support and once again turned resistance at ~$203. All of this also just happens to be occuring inside a 4H bullish orderblock. ETH/BTC is even more interesting, despite what seems on the surface to be a boring chart. All I needed to highlight here was the longest and tightest range of price-action in recent history. ETH/BTC has been stuck between 0.0306 BTC and 0.032 BTC for over 3 weeks; a range of around 4.5%. Extended periods of low volatility are most often followed by extreme volatility…


Vertcoin:

Price: $0.66 (10454 satoshis)

Market Cap: $31.097mn (4,883 BTC)

Thoughts: Vertcoin is among the oldest cryptocurrencies to exist. As I discuss in my book, it was the first coin I ever invested my own money into back in February 2014. It has since experienced numerous market cycles, and I believe we are on the cusp of a new one. Price has dropped off from its winter 2017 highs back to the low of August 2017. A tight range has formed, now lasting 12 straight weeks. Volume is low, but the duration of the range does somewhat make up for this (micro-buying over an extended period of time is one form of accumulation that differs from the high-volume, single-day accumulation seen in other alts recently, like SALT). I doubt there’s been a better reward-to-risk opportunity to buy Vertcoin in a very long time.


Shield:

Price: $0.005 (88 satoshis)

Market Cap: $2.863mn (450 BTC)

Thoughts: The parallels between the Vertcoin chart and this Shield chart are overt, as are the parallels in much of the altcoin market at the moment. Shield is a lower-midcap privacy coin that I wrote about in my book; more specifically, I talked about how I liked its consistency in meeting development deadlines and the specificity of its roadmap. It was, however, too expensive at the time to buy. Shield has fallen around 96% from its January highs, back to levels only traded during the initial months post-launch. It has formed a very tight range lasting almost 2 months despite its low liquidity, and is currently trading abbove its 6-month trendline resistance. As I say, Shield has very low liquidity, and this is likely due to its largest exchange listing being CoinExchange, but I think micro-buying at these levels is a good approach for anyone wanting to enter a position for the next bull cycle; a cycle that presents a near-30x opportunity in BTC.

That concludes the ninth Market Outlook. I hope you’ve found some value in it. As ever, feel free to leave any questions in the Comments and I’ll get back to you.


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Market Outlook #8

Market Outlook #8 (28th October 2018)

Well, it seems the big three that I would usually cover in these posts took the week off. Bitcoin has had one of its least volatile weeks in recent history, and Monero and Ethereum followed suit. So, to prevent today’s Market Outlook from being an utter waste of time, I have decided to make this one an Altcoin Special. I’ll be covering 4 altcoins, from lowcaps to largecaps, all of which seem to me to present huge upside opportunity at current prices. I’ll begin with Stratis, before covering Ubiq and Synereo, and finally a special treat that came onto my radar this week: Musicoin. In last week’s Market Outlook, I talked about the massive opportunity presented by FoldingCoin, and I think Musicoin might actually be an even better buy. But we’ll get onto that later…

First, Stratis:

Stratis:

STRAT/USD

STRAT/BTC

Price: $1.64 (25318 satoshis)

Market Cap: $162mn (25,082 BTC)

Thoughts: Stratis announced this past week that the project is now a Silver Partner of Microsoft. This, naturally, led to a huge buy-up, in which 5% of the circulating supply was traded in 24 hours on Binance alone (~$8mn). Now, this only served to reinforce my thoughts on Stratis, and I have been buying since I first wrote about the coin in Market Outlook #1, almost two months ago. Since then, price has remained within its tight range against USD and BTC, and a near-3-month accumulation range is undoubtedly in play. I believe this past week’s buy-up was merely a precursor to an imminent reversal; a reversal that would be confirmed if price can close above the major support turned resistance around $3 (which is still almost 100% away, currently). There’s a long way to go, for sure, but the signals keep appearing.


Ubiq:

Price: $0.53 (8188 satoshis)

Market Cap: $22.542mn (3,489 BTC)

Thoughts: Ubiq had a very strange moment in its price-history back in April, when 12% of its supply was bought up, but macro sentiment and the pervading bear market seemed to win the fight, and price followed the rest of the market in an extended sell-off. However, even the swiftest of glances at the volume profile on the chart can tell us that there has been almost zero volume on the decline of the past few months, and capitulation seems to have occured on the one steep day of decline towards the end of August.

Since that point, price has consolidated above the 15-month trendline resistance, finding support – strangely enough – at the opening price of Ubiq’s listing on Bittrex. Funny how these things work out, isn’t it? Small volume spikes are beginning to appear within this range, and I believe buys here will be rewarded before the end of the year.


Synereo:

AMP/USD

AMP/BTC

Price: $0.046 (718 satoshis)

Market Cap: $4.65mn (723 BTC)

Thoughts: Synereo is in a very interesting position at the moment. AMP/BTC has seen three consecutive market cycles with lower and lower peaks, forming a trendline resistance that spans two years. Price is also trading a little above its all-time low, and the endpoint of the trendline resistance has arrived. Poloniex delisting AMP sent it down below a short-term level of support, but, in the past week, a sign of renewed interest appeared: 9% of the circulating supply was traded last week (around $420k). That’s a lot of money to throw at a lower-midcap at such a pivotal point in its price-history.

A quick look at AMP/USD also indicates that prices are back within their long-term accumulation range; prices that have been rewarded without fail since Synereo’s inception. Reward-to-risk here is huge, as one could quite easily have a soft stop at a daily close below 500 satoshis (~30%), or you could use a fixed-risk approach like I tend to for lowcaps and midcaps. Comparing the two charts, peaks in AMP/USD have gotten progressively higher whilst the inverse has occured against BTC. I would imagine that, whenever the next cycle occurs, this may rebalance.


Musicoin:

Price: $0.004 (57 satoshis)

Market Cap: $4.159mn (646 BTC)

Thoughts: Finally we come to what I feel is the highest reward-to-risk opportunity I’ve seen in a while; or at least one of a handful. There is very little I need to paint on the chart except that over a third of the supply was traded in the past two weeks, with 20% being traded a few days ago. This amounts to around $1.7mn of MUSIC that exchanged hands recently. Couple this with the fact that price is trading ~10% above its all-time low, and has been holding that level for 10 weeks now, and you have a strong case for buying.

There is one weakness that I must point out, however, and that is the constant supply emission. Roughly 1.6mn MUSIC come into existence daily, or ~580mn a year. This equals to an annual inflation rate of a little over 50%. Now, this is by no means a deal-breaker, especially given the upside potential, but it’s something to consider. At current prices, daily supply emission is 0.91 BTC or a little under $6,000. To put this in perspective, MUSIC has traded an average of $80,782 daily for the past month. Its average daily volume covers its average daily supply emission by over 1300%.

I hope this eighth Market Outlook has been informative. I rather enjoyed not analysing BTC, ETH and XMR for once. Feel free to post any questions in the Comments and I’ll get back to you.


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