| Trusted by over 100,000 blockchain investors. | |
If you were forwarded this newsletter by a friend, you have excellent taste in friends. You can sign up here. | |
I am proud to announce the biggest project we’ve undertaken at Bitcoin Market Journal: our new Digital Asset Rankings, rating the top 50 digital assets for investors. Think of them like “stock ratings for tokens.” The project started last year, after we developed our industry-leading Blockchain Investor Scorecard. “What if we used our scorecard to create a list of top tokens, kind of like a Morningstar or Moody’s rating system?” I asked our editor Alex Lielacher. “The Blockchain Investor Scorecard is great,” said Alex, “but it’s a qualitative analysis, which is only half the picture. We also need some kind of quantitative metrics.” “The conjoined twins of investing,” I nodded, remembering the image from my book (pictured above). “Maybe we could find metrics that would serve like market indicators,” suggested our analyst Kevin Kelly, “in the same way that stock investors use metrics like Earnings Per Share.” Everyone agreed this was a good idea. In hindsight, it was a good idea, but we had no idea how difficult this good idea would be. First, there are no commonly agreed metrics for Digital Assets (i.e., tokens or cryptocurrencies), so we had to build everything from scratch. And that’s just math: when it comes to “matters of opinion,” as in our Blockchain Investor Scorecard, everyone had an opinion. (Just ask Twitter.) So Alex, Kevin, and our top analysts -- including Justin Caldwell and Adam Carpenter -- used our Blockchain Investor Scorecard, combined with an internal review process of thoughtful debate, helping us “find the truth together.” (Thanks to Ray Dalio for this principle.) We are incredibly proud of what we’ve accomplished, which we’re making available to everyone, free of charge. Click here to check out our new Digital Asset Rankings. Three principles guided our work. Principle 1: Usability In a nutshell, our goal is to give you each digital asset in a nutshell. Helpful star ratings (our overall, deep-dive qualitative rating) are complemented by one or more quantitative metrics. | |
By having multiple data points for each asset, you can more quickly determine at a glance whether a token is worth considering in your investment portfolio—without poring over dictionary-sized books, or wading through 60-minute YouTube videos. Each column is sortable. For example, you can sort by Token Velocityto see which tokens are changing hands most frequently. Liquidity is a good data point for whether a digital asset has a lot of active buyers and sellers – but liquidity alone would not be a reason for buying or selling. By cross-checking liquidity with our star ratings, however, you get a better picture of the overall strength of a digital asset as a potential investment. If you're interested, click to dig into our full scorecard rating. We've designed our rating system for usability. | |
Principle 2: Quality Our goal is providing digital asset ratings that reflect reality, rather than overhyping a token that we’re getting paid to promote. (At Bitcoin Market Journal, we don’t accept any paid promotion.) In other words, we're trying to identify investments that are likely to grow in the future. To do this, we used our Blockchain Investor Scorecard, which is our open-source scorecard that is used to deep-dive on the most important aspects of a blockchain-based digital asset. (Learn more about the Blockchain Investor Scorecard here.) We complemented this with our three ratios -- NVM Ratio, NVT Ratio, and Token Velocity – which you can view like stock fundamentals. Note that not all digital assets have NVM or NVT, because not all digital assets have transparent blockchains – which brings us to our last principle. Principle 3: Transparency Our goal is an open-source rating system that anyone can use. We want to be radically transparent with how we determine our ratings. You may not agree, but you at least can see our expert thinking that went into it. We believe that the days of closed, proprietary, secret rating systems are over. They lead to systemic problems where the entire economy becomes “pay to play,” as illustrated in this great scene from The Big Short: | |
Unlike Wall Street, we will not sell ratings for fees. The Telescope and the Microscope View What our team members – Alex, Kevin, Justin, Adam, and myself – bring to the table is a deep knowledge of blockchain, and a broad understanding of different assets. We’ve seen a lot of stuff. This gives us both the “telescope” and the “microscope”: the big picture and the detail view. That said, we are not perfect. Any rating system is necessarily subjective. But by using our transparent, open-source approach, you can see how we got to our conclusions, then make your own. As always, our blockchain investing principles apply: Do your homework before making any investments. Discuss ideas with other smart people (in person, not on social media). Don’t invest more than you’re willing to lose. Blockchain investing can be a roller coaster. Diversify, diversify, diversify. See our Blockchain Believer’s Portfolio for simple allocations. Consider digital assets a “slice of the pie,” your alternative assets, or “mad money.” Grow the pie. Contribute to your investment portfolio in “steady drip payments,” preferably through an automatic monthly withdrawal. The Industry Standard Our goal is for this approach – focused on quality, usefulness, and transparency – to become the industry standard. It’s way better than how the economy is run today, and it’s a massive step forward for ordinary investors like you and me. Remember: we’re giving all this work away, absolutely free. It’s our gift to investors, our gift to government regulators, and our gift to the world. All we ask in return is that you check it out. And if you find it useful, share it with a friend. | |
Health, wealth, and happiness, | |
John Hargrave Publisher Bitcoin Market Journal | |
Hey Everybody, Following yesterday's brutal sell-off, it looks like we're getting a bit of a bouncy-bounce in early trading today. The Asian and European markets are up, but the real test on whether this relief rally holds legs will come during the U.S. session. No doubt there will be many bulls who have been on the sidelines, watching the recent face-melting rally since March and kicking themselves for not taking part, who will see this latest pullback as an opportunity to get in. On the other hand, a 6% drop for both stocks and bitcoin is a clear sign that volatility isn't quite dead just yet. Today is Friday, and that means the weekend is coming up. For most traders and investors, that means there are precious few hours to decide exactly what side of the line in the sand they choose to stand on before the decision is locked in for 48 whole hours by the closing bell of the New York Stock Exchange. | |
When Normal? Economic data is in from the U.K. today, and all of it is worse than expected. Here's one sensational headline from The Guardian this morning. | |
GDP is the one economic indicator making headlines of course, but manufacturing and industrial production figures were nearly twice as bad as economists were anticipating, and construction output was squashed by a walloping 40%. All this is kind of baked into the pie though. When seen in the context of a coronavirus lockdown, it should be understood that these numbers are going to be brutal. Remember, investing in stocks isn't really about what's going to happen next month so much as it's about understanding what's likely to happen in the next few years. This is a difficult task given everything that's been going on lately. The big question is when will things get back to normal? Or, how long will it take for the economy to return to the strength it was at in February? Optimists might think that a complete recovery may be possible some time next year while pessimistic views vary. Some predictions span out as far as a decade or more. Personally, I believe there's even a possibility, though not a very likely one, that we never return to that time. For better or worse, COVID-19 may have altered the course of humanity for centuries to come. Of course, as with most truths, reality will likely play out somewhere between the optimistic and the pessimistic views. Also, it will likely be different in different places. In New York, they're clearly easing restrictions, while Houston, Texas is now considering reimposing lockdown measures. So now, see if you can decide within the next few hours how you want to position yourself for that. Now, hopefully we can understand some of the volatility that's happening. Here we can see the VIX volatility index, with yesterday's spike clearly visible even in this long-term data. | |
My shorts on the stock market are still in play, and I've reduced my exposure to the crypto market for the time being, at least until we get some better indication of where this is going. | |
Weekend Entertainment For your entertainment this weekend, I'd like to broach a subject of great social and political import that has been coming up a lot lately. Even though I've received a lot of flak on social media, I will not be silenced, because the topic is freedom of speech. Although I don't often find myself holding the same view as Facebook founder Mark Zuckerberg, in this case, I believe that he's in the right.... | |
Zuck himself has been under tremendous pressure for not censoring posts from President Donald Trump. Now, we won't go into what Trump was saying, it clearly wasn't very nice. Twitter did take the option to censor the same speech, which I believe is the wrong decision. Free speech is simply not free if it is censored. Rather than explain to you why, I will simply show you two Ted Talks that prove this point. Each from a completely opposite point of view but come to the same conclusion. So.... If you tend to lean liberal or vote Democrat, watch this video now. If you're more conservative or support Republicans, watch this video. After watching either of these videos, or both, I hope that you can come to the same conclusion I have. Indeed, it may give a bit of insight into how I like to do all my analytical thinking. Wishing you a wonderful weekend. Best regards, | |
Mati Greenspan Analysis, Advisory, Money Management | | |
|
|
| |