Waiting for Alt Season

ByteFolio 66;

ByteFolio brings together ATOMIC, ByteTrend and Token Takeaway to create ByteTree’s model portfolio, known as ByteFolio. This is a selection of crypto tokens, which are weighted according to their risk/reward characteristics. ByteFolio has a modest turnover and will not suit traders. It will appeal to investors who wish to diversify beyond bitcoin, with the aim to beat it.

It is reassuring to see the recent hype over Bitcoin clones fade away. Litecoin (LTC) is back to a 2-star ByteTrend in BTC, while Bitcoin SV (BSV) is reassuringly back to 0 stars. Yet Bitcoin Cash (BCH) remains 5 stars in BTC. I suppose a 150% rally does that. The only surprise is how the 200-day moving average is positively sloping and whether that remains so.

BCH Pump

It’s worth reminding ourselves how BCH got here. It was originally a Bitcoin hard fork which spun off on 1 August 2017. Since early 2018, from where I have a price to show you, $100 invested became $19.94, or just $8 before the pump. In contrast, BTC rose by 3.5x. There is no other way to put it, but BCH has been a colossal failure.

BCH Bust

This brings me to the next point: to remind ourselves why we need to stay patient during these troubled times in markets where liquidity is being withdrawn from the financial system.

If I include the major stablecoins, Bitcoin makes up 45% of this space, with Ethereum a further 19%. US dollars, Ripple (XRP) and Binance Coin (BNB) make up 18% leaving 19% for the other 20,000+ plus crypto projects where there is generally poor liquidity.

We are waiting for liquidity to return to markets so that the new round of winners can emerge from the green area. We know that XRP never sustains a rally because they seem to sell into strength, so our only hope to get Bitcoin and Ethereum type of performance is from carefully chosen mid and small caps when the time is right.

Be patient. The good times will return, especially with the recent ruling…

Action:

No action

Shakers

Ripple vs SEC

A US district court ruling has shaken the Securities and Exchange Commission's (SEC) stance on digital assets, specifically Ripple's XRP token. The court declared that XRP should not be considered a security when sold through exchanges or programmatic sales. This landmark judgement is seen as a significant victory for the cryptocurrency industry, as it removes the uncertainty surrounding XRP and provides relief to those who bought the token through exchanges. However, it's worth noting that institutional sales of XRP were found to have violated securities law, underscoring the need for a separate digital assets framework.

The court's decision has had immediate repercussions in the crypto market, prompting several major exchanges to announce their intentions to list or re-list XRP on their platforms. As a result, the crypto market has experienced a significant increase in XRP's trading volume, reflecting the growing confidence and interest in the token following the favourable ruling. According to CoinMarketCap, XRP is up over 50% in the last 7 days and ranks as the 4th largest cryptocurrency by market capitalisation, overtaking Binance's BNB token.

Polygon (MATIC)

The Polygon team unveiled a whitepaper on 13 July, introducing a proposal for POL, an upgraded and rebranded version of their native token, MATIC. The POL token is envisioned as a third-generation token, characterised by hyper-productivity. Like other productive tokens such as ETH and SOL, it empowers token holders to become validators, meaning they will actively contribute to securing the chain.

This upgrade brings two significant additional features to the table. Firstly, POL can be utilised to validate multiple Polygon chains, allowing validators to earn additional rewards in the form of transaction fees from those chains. Secondly, these chains can offer validators more roles and rewards, further enhancing the value and utility of the POL token. This approach aims to bolster the appeal and functionality of the POL token within the Polygon ecosystem.

Binance

According to a report from CNBC, Binance has recently laid off around 1000 employees. Additionally, the company is considering increasing the number of layoffs to a range of 1500-3000 by the end of this year. These layoffs are largely seen as a response to the regulatory scrutiny that Binance is currently encountering in the United States. Earlier this year, the exchange faced allegations of anti-money laundering violations and sanctions evasion. Naturally, this has raised concerns and made it challenging for Binance and its founder Changpeng Zhao to obtain and maintain the necessary licenses to continue operating.

The decision to downsize their workforce appears to be a strategic move by Binance to navigate the regulatory landscape more effectively, addressing any potential legal issues they may be facing. As the regulatory environment for cryptocurrencies evolves and becomes more stringent, exchanges like Binance are under increased scrutiny to ensure compliance with anti-money laundering and other regulatory requirements. It remains to be seen how Binance will navigate these challenges and adapt to the evolving regulatory landscape in order to maintain its position as a leading cryptocurrency exchange.

Celsius

In the aftermath of Celsius filing for bankruptcy protection last year, a US bankruptcy court granted the crypto lender permission to convert its approximately $170 million worth of altcoins into Bitcoin and Ethereum. The firm has already initiated the process by transferring a substantial amount of cryptocurrencies, including LINK, MATIC, AAVE, and SNX, among others, to an "OTC" wallet. This move came after the court's approval to liquidate the altcoin holdings starting from 1 July. However, the conversion could potentially exert significant pressure on the smaller token markets, given the reduced liquidity for these tokens in the past year. It's worth noting that the company's ex-CEO, Alex Mashinsky, was recently arrested on various fraud charges by the Department of Justice.

ByteFolio Asset Allocation

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