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What is a Bitcoin ETF?

There is a huge emphasis on Bitcoin ETFs in the investment community.

Jackson Zeng, COO, Caleb and Brown breaks down the jargons to give his take on this hot topic.

  1. What is a Bitcoin ETF?
  2. Why does it matter?
  3. How does this affect the market?

1. What is a Bitcoin ETF?
A Bitcoin Exchange Traded Fund (ETF) allows Bitcoin to be traded on the stock market. A trust would hold the asset on behalf of the fund while investors can trade its shares on the exchange.

2. Why does it matter?
Trading of Bitcoin currently involves digital asset custody. Investors and Institutions are concerned about handling that risk themselves. A Bitcoin ETF provides a new option for traders to get exposure to Bitcoin without having to worry about securing the digital asset themselves.

3. How does this affect the market?
Reducing the barriers to entry enables a new category of investors to join the market, which may spell greater liquidity and positive price movement as that money enters the space. It will also be a step forward in regulatory clarity on Bitcoin

Experts views from other sources:

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Jackson Zeng is the COO at Caleb and Brown is available to guide new and seasoned investors.

About Jackson Zeng:
Jackson has five years of trading experience in the cryptocurrency space and founded Bit By Bit Capital, one of Australia’s first private trusts investing in cryptocurrency.

Call Jackson on +61 1800 849 149  or Contact Us to discuss further.

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Know Your Tokens!

This article was first published by ICOscoring on Medium

Securities Exchange Commission (SEC) – USA and Financial Market Supervisory Authority (FINMA) – Switzerland broadly categorizes tokens as per below:

Security tokens — this type is to some extent similar to securities.
Utility tokens — this type gives its holders the access to services provided by the project.
Payment tokens — this type has its own Blockchain and is often considered as a mean of payment.

Know-your-tokens

Key features of each token

Security token (SEC) / Asset token (FINMA): This category of tokens represents assets such as participation in real physical underlyings, companies, or earnings streams, or an entitlement to dividends or interest payments. In terms of their economic function, the tokens are analogous to equities, bonds or derivatives.

Utility token (SEC) / Utility token (FINMA): This category provides access to the goods & services that the project will launch in the future. Also, they can be used as a type of discount or premium access to the goods & services of the project.

Cryptocurrencies (SEC)/Payment tokens (FINMA): Usually, the tokens of this category have no further functions or links to other development projects. Speaking broadly, cryptocurrencies purpose is to be items of inherent value (similar, for instance, to cash or gold) that are designed to enable purchases, sales, and other financial transactions, They are intended to provide many of the same functions as long-established currencies such as the U.S. dollar, euro or Japanese yen but do not have the backing of a government or other body.

Depending on the type of token, organizers and participants of an ICO might have different rights and responsibilities. It is worth noticing that the safest type of token for investors is ‘security token‘. However, this type of token makes ICO more complicated and requires KYC/AML procedures. For instance, FINMA considers these tokens as a type of security and applies the same rules to them as for other securities (stocks, bonds, etc).

Important points to note for investors:

  • It is necessary to analyze the type of token and the economy behind it when making investment decisions.
  • It is a must to always remember that the price of the token is based on the basic principles of economics, such as the law of demand and fair value.
  • It is always advisable to understand the base value of token and its current and potential price in case all the targets are reached.

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Jeff Zylstra, is the senior crypto broker at Caleb and Brown to guide new and seasoned investors.

Call Jeff on +61 413 342 200 or Contact Us to discuss further.

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How to Profit from a Bear Market?

At Caleb and Brown, we pride ourselves on keeping our clients updated about the market trends, including how to take advantage of the bear market like a pro!

Our Senior Crypto Broker, Jeff Zylstra has compiled a comprehensive market analysis report with a personal example. Jeff has over 5 years of experience as a broker and been trading cryptocurrency since 2014.

December 2017/January 2018 periods were, right at the ‘Point of Maximum Financial Risk

At the moment from my analysis, it appears we are around capitulation and despondency area, very close to the ‘Point of Maximum Financial Opportunity‘.

Positioning is the most important thing in this market, giving yourself the best possible chance to maximize the effectiveness of your capital by leveraging the market cycle is extremely important for a long-term investment strategy.

It is a Rinse and Repeat scenario, example;

  • When people are greedy, you are being fearful and selling into the euphoria.
  • When people are being fearful and selling out of panic, desperation and depression.

These are the optimal times to be a buyer!

Here is a look at a Bitcoin daily price chart from this year’s market cycle so far. How many similarities do you see comparing the market cycles?

BitcoinBitcoin-Price-Cycle

If you happened to have bought during peak thrill and euphoria I would stop worrying all the time, stop watching the price every day because guess what?

You are an investor, not a TRADER. Traders care about the day-to-day, week-to-week price fluctuations.

The nature of this very market is volatile, +5% -10% is just part of the everyday background noise.

Investors are playing the long game, and HOLDING has been proven by many traders to be a solid strategy.

You just got to have the strength to keep your emotions out of the game.

When I first bought Ethereum at $26 I felt the same feelings of anxiety and panic you felt when I saw the price move all the way down to $6.

I was questioning my investment, my strategy and the market. I felt really depressed at this stage.

I was very lucky that I drowned out the negative thoughts and emotions and held strong.
This market is an amazing tool for transferring wealth from the IMPATIENT to the PATIENT.

BE PATIENT!

Moral of the story is, Ethereum hit an all-time high of $1389.00 USD ($1891.26 AUD). I hit an average of 100x my original investment in this trade, looking back I don’t know what I was worried about.

There will be no reward without risk, no glory without suffering.

If you are looking for a position, a friendly chat or further information on market cycles reach out to me.

Jeff Zylstra is available as your broker to guide you through this jungle.

Call Jeff on +61 413 342 200 or Contact Us to discuss further.

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Caleb & Brown to Take Part in Vinnies CEO Sleepout Fundraiser

Caleb & Brown’s CEO, Dr. Prash P, is set to participate in the annual Vinnies CEO Sleepout in Melbourne this year to raise funds for Australians experiencing homelessness.

The event’s Victorian iteration will be taking place on Thursday, June 21, and will see hundreds of CEOs, business owners, and community and government leaders camping out on one of the coldest nights of the year to support Australians experiencing homelessness.

“The event is underpinned by a peer-to-peer fundraising campaign, which culminates with participants sleeping on a piece of cardboard at the event and listening to the stories of real people who are experiencing poverty and homelessness,” states Ms Sue Cattermole, the CEO of Victoria’s St Vincent de Paul Society.

Dr. Prash will be one of 183 CEOs participating in the event, and is eager for the opportunity to raise awareness about the pressing issue of homelessness in Australia as well as the need to help organisations assisting disadvantaged people.

“My training as a doctor has seen me spend the better part of the last decade working in the public mental health system and as a direct result has made me face up to the dire straits of my many homeless patients,” states Dr. Prash.

“Their struggle was very real, painfully apparent and all around me. Thankfully organisations like Vinnies were always there with open arms to offer shelter and solace, but their good work can only stretch as far as the resources that we make available to them.”

The first CEO Sleepout took place in 2006 and has since grown into a major initiative that offers real solutions for disadvantaged Australians. Last year’s nation-wide events raised a massive 5.6 million dollars, with Vinnies hoping to make an even bigger impact in 2018.

CEOSleepout-beds

When you sponsor a team or CEO taking part in the Sleepout, your funds provide tangible support to people needing assistance nation-wide and help to break down the cycle of homelessness. Your donation will directly contribute to:

  • funding new Vinnies initiatives;
  • providing additional support for existing initiatives, such as food vans and emergency support;
  • expanding the reach of Vinnies services to ensure every Australian experiencing homelessness has access to shelter, meals, and emergency assistance.

According to the Australian Bureau of Statistics, over 116,000 Australians are currently experiencing homelessness. Shockingly, 60% are under 35, 44% are women, and 13% are under 12 years old. These statistics are alarming, but Dr. Prash believes that we can achieve major change by working together.

For example, $55 feeds a family for a day, $105 provides emergency accommodation for a family in crisis, $205 relocates a person sleeping on the streets to accommodation services, and $505 helps to pay rent for a family facing eviction.

If you want to help Caleb & Brown combat homelessness in Australia, head over to Dr. Prash’s fundraising page to learn more or make a donation. Otherwise, come and see the Sleepout in action on Thursday, June 21 at The University of Melbourne‘s Parkville campus inside the South Lawn Underground Carpark.

When it comes to supporting people in need, every little bit counts!

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Caleb & Brown Wins SAFAA FinTech Startup of The Year 2018

MEDIA RELEASE

Why being named Fintech start-up of the year is helping to bridge two worlds.

Last week, investment brokerage ‘Caleb & Brown’ were awarded ‘Fintech Start-up of 2018’ at the inaugural Stockbrokers and Financial Advisors Association (SAFAA) Fintech Awards in Melbourne.

This year, the SAFAA have recognised the need to represent the new technology era by including areas such as- artificial intelligence, big data, cloud, blockchain, regtech, and Crypto, with this awardplaying an important role in establishing cryptocurrency as an innovative area of the greater financial market.

Stockbrokers And Financial Advisers Association (SAFAA) FinTech Start Up of the Year 2018
Stockbrokers And Financial Advisers Association (SAFAA) FinTech Start Up of the Year 2018

Dr. Prash P, Founder of Caleb & Brown says that “This is a milestone not just for us as a company, of course it is great to be recognised by the FinTech industry, but this is a major win for the cryptocurrency industry as a whole’. The ‘old-school’ financial services industry have embraced crypto enough to say, ‘not only is this a real thing, but we will award them for their help bringing us closer to innovative technology”. By solving key problems for investors in the emerging cryptocurrency market, Caleb & Brown have demonstrated that they are helping to bridge the gap that exists between the finance industry and the new, emerging fields of FinTech.

The three-day conference which saw over 500 local and international stockbrokers and advisors descend on Melbourne for the purpose of community enlightenment and networking also had its focus on embracing technology. Andrew Green, the CEO of SAFAA stated “Technology is at the heart of change and ‘disruption’ and ‘disintermediation’ is where the (fintech) industry is being challenged to remain relevant – we need to be embracing technology, not ignoring it”.

Whilst this type of financial technology is not fully embraced and is still viewed as being ‘on the other side of the fence’, according to Dr. Prash P, awards like this are helping to “brings us out of the shadows”.

Stockbrokers And Financial Advisers Association (SAFAA) FinTech Start Up of the Year 2018

Crypto is at the pointy end of the innovation spectrum, and for some it has not been so readily embraced, however the momentum is undeniable and as Dr. Prash P says, “we can’t keep ignoring it”.

About Stockbrokers And Financial Advisers Association (SAFAA):

The Stockbrokers And Financial Advisers Association (SAFAA) advocates for ethical, efficient and stable, listed capital and debt markets in Australia.

  • SAFAA has both Principal and Practitioner Members.
  • Principal Members comprise leading stockbroking and financial advisory firms and investment banks.
  • Practitioner Members comprise experienced stockbrokers and financial advisers.
  • In addition to its Advocacy role, SAFAA provides specialist education and training for its Practitioner Members.

The Association was formed in 1999 as the Securities & Derivatives Industry Association (SDIA), then became the Stockbrokers Association of Australia (SAA), and in November 2016 became the Stockbrokers And Financial Advisers Association (SAFAA).

Since 1999, SAFAA and its predecessors have played a pivotal role in shaping the ethical and efficient development of listed equity, debt and derivatives markets in Australia.

Specifically, the Association has:

  1. Trained more than 10,000 investment professionals
  2. Convened hundreds of Workshops and Committee Meetings to discuss industry issues
  3. Submitted dozens of thoroughly researched policy papers to government and regulators – papers that have significantly Influenced policy settings

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Whether you are new to the market, or a seasoned trader, Caleb & Brown can help to realise your goals register your interest.

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How Does Blockchain Work?

When the term ‘cryptocurrency’ is mentioned, those who have had some sort of exposure to the markets can relate it to blockchain technology. However, in reality, how many people actually know what blockchain technology is?

It is important to visualise how the concept of a blockchain actually works:

In the case of Bitcoin, blocks are generated every ten minutes, and therefore there is a new addition to the existing blockchain every ten minutes. An easier way to interpret this would be to think of a simple metal chain, but instead of links replace them with blocks. Once the blocks are processed and added to the chain, the data cannot be changed, and therefore blockchain technology operates on a non-editable ledger.

Upon the generation of a blockchain, all possible public addresses and their private keys are generated. Therefore, when we open new wallets on Jaxx, MyEtherWallet and other wallet applications, we are not ‘creating’ a wallet, instead we are being assigned an address and the respective private key. Mathematically speaking, it should be next to impossible for you to be assigned an address and key which has an existing balance.

Because of the misunderstandings surrounding the above concept, many seem to think that wallets created on Jaxx can only be accessed with the Jaxx wallet, when they actually can used with any wallet app. Wallet apps only provide a means to access the blockchain, and therefore an Ethereum wallet assigned on Jaxx can also be accessed using MyEtherWallet.
Summary:
Wallet applications all connect to the same network and therefore public addresses and private keys are generic across all wallet apps.

Note:
Always verify that the wallet provider you are using/planning to use is confirmed to be safe. It is best to stick to the wallets which are confirmed legitimate. This is to protect the security of your funds.

Some Potential Use Cases for Blockchain:

  • Decentralised Payments: Because data on the blockchain cannot be altered once it is has been broadcast and processed, former banking processes such as chargebacks will not be possible. This is a double edged sword: chargeback fraud will not be possible but at the same time fraud can not be fixed through a chargeback.
  • Uneditable Ledgers: A definite use case for blockchain will be its ability to offer ledgers which are uneditable. Altering records will not be possible, which will ensure the integrity of medical records, copyrights and etc. in the future.
  • Public Accessibility: Most blockchains are public, and therefore every person is able to observe what transactions are taking place, and the balances for any address. This effectively leaves a trail for all the assets that people are moving inside the blockchain, and unless someone finds out that a specific address is linked to you, there is no way to associate it to a name. Governments will be able to link addresses to specific individuals by working together with exchange platforms, and therefore money laundering through blockchain is easily trackable.
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Bitcoin Cash and Forks

With most cryptocurrencies, there is no central governing body. Therefore, no single entity can approve of any upgrades to the network. What is required is consensus; over fifty-percent of the mining network must agree with the changes. Most of the time, there is no conflict when it comes to minor tweaks, but when there are some major implementations, contributors to the mining network will not unanimously agree. In the case that the community is divided when it comes to making a decision, a ‘hard fork’ may take place.

If you have invested in Bitcoin, perhaps you have heard of another asset called Bitcoin Cash. Bitcoin and Bitcoin Cash are completely different projects, but if you held Bitcoin on August 1, 2017, you probably now also hold Bitcoin Cash. As confusing as it may sound, Bitcoin Cash was a hard fork of the Bitcoin blockchain. What exactly does his mean?

Hard Fork: 

There are two components to sending a Bitcoin transaction: the transaction details and the transaction signature. The more transactions there are being broadcast to the network, the more block capacity is filled. Blocks are generated every 10 minutes, and given that blocks do have a size limit, if the current is full, other transactions need to wait 10 minutes to ‘hop on’ the next block. You can think of the Bitcoin network as a train station where there are trains every 10 minutes which give priority to passengers who are willing to pay more. Therefore, if you pay a high transaction fee, your transaction will be prioritised for the next block.

Bitcoin’s scaling issues were brought to light when the new influx of investors in late 2017 caused processing times to take hours, and transaction fees of up to $50. The feasibility of such a protocol becoming a future world currency was questioned, and developers working on Bitcoin with foresight of these problems proposed different solutions.

This is how Bitcoin Cash was created.

This process is when people in the mining network disagree with the proposed changes, and therefore continue to mine the old chain without the changes, whereas the remaining miners begin mining the new chain with the implemented changes. There now exist two blockchains, each of which have branched out from an old blockchain, hence the term ‘fork’.

Bitcoin Core’s (Current Chain) Solution: 

Segwit2x: Separate transaction details from transaction signatures, so that blocks can contain more transaction details and therefore process more transactions with each block, the signatures will then be contained in a separate block, essentially doubling the block size (because there are now two blocks, or ‘batches of data’).

Bitcoin Cash’s (Side Chain) Solution:

Increased Block Size: Transaction signatures and details to be recorded in the same block, but increase the overall block size. This means more data can be recorded in each block (just a simple hardware style upgrade, no changes in concept)

Because the Bitcoin Core team and Bitcoin Cash team could not come to a common consensus, the two parties decided to work on their own proposed solutions. Therefore, on August 1, 2017, the Bitcoin Core chain underwent a hard fork and saw Bitcoin Cash split off.

The reasoning behind Bitcoin Cash is fairly simple:

  • Segwit2x alters the way transactions work and changes the original concept of Bitcoin.
  • Increased block size maintains the vision of the original Bitcoin whitepaper released in 2009.
Currently, Bitcoin Core maintains above fifty-percent of the world’s hashing power (mining), and therefore it is simply known as Bitcoin. If Bitcoin Cash were to overtake Bitcoin Core in hash power, it would then be known as Bitcoin, and Bitcoin Core would subsequently be known as Bitcoin Core. The team behind Bitcoin Cash include Roger Ver (Bitcoin adoption pioneer) and Jihan Wu (mining equipment company CEO). For a hash-power shift to occur, Bitcoin Cash will need to be more profitable to mine than Bitcoin Core.
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The Largest Crypto Exchange Launches Public Blockchain

Binance, the largest cryptocurrency exchange by trading volume, announced that it is officially developing a public Blockchain to create a new decentralized exchange, according to a statement on March 13.
Binance’s vision that “centralized and decentralized exchanges will co-exist in the near future, complementing each other” inspired them to develop the Binance Chain, which will be used for the transfer and trading of Blockchain assets. The move will also push the cryptocurrency exchange toward transforming from a company into a community.

Binance is one of the leading crypto-currency exchanges providing access to hundreds of digital currency pairs on our leading exchange platform while maintaining security, liquidity and high-speed.
Binance strives to give our users access to some of the latest blockchain/DLT technologies with new cryptocurrencies being listed all the time.

Binance stands for “Binary with Finance”, integrating digital technology with finance. Just as the name suggests, we are digital currency enthusiasts having more than 20 years of combined finance, security and development experience with top exchange platforms at companies including Tokyo Stock Exchange, Morgan Stanley, Accenture and other Top 100 companies all over the world.

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Bitcoin Price – A Technical Analysis

It has been an interesting past month for Bitcoin, although the markets do seem less quiet than the period of rapid decline in February. This is to be expected, as a large portion of investors who unfortunately entered the market at December highs may have panic sold. Our fall from $20,000 (USD) saw a bottom at $6,000 (USD), before a run up/recovery to $11,800 (USD). It is important to acknowledge that as much as a parabolic rise isn’t sustainable, neither is a decline of the same magnitude.

Moving on, let’s focus on what’s going on with Bitcoin right now (14/03/18). From a technical perspective, we completed a double top formation with a peak of $11,700, causing a volatile dip into the low $8,000s (USD):

On a smaller scale, the dip was succeeded by a double bottom at around $8,400 (USD), and currently has recovered to the low end of the $9,000 (USD) range. Although from a technical perspective the rejection from the local top twice as shown above is a textbook bearish indicator, it was by no means a natural rejection.
A double top formation is only validated when the price breaks below the neckline, which is the level of the local bottom in between the two peaks (in this case ~ 9,200 USD). Although we do see a decline from the second peak, the selling pressure really increases on 07/03/18.

What happened on 07/03/18?
A bankruptcy trustee for MtGox, an exchange that was hacked for 750,000 BTC in 2014, released public reports which stated that almost 40,000 BTC were sold in December 2017 and January 2018, and had 166,000 BTC remaining which were awaiting the court decision.

Understandably, the idea of so many Bitcoin being potentially dumped on the market in the future, spread fear among investors and traders, causing them to drive the price down. However, in the short-term, the reaction may be excessive, and here’s why:

  • The selling had ceased as of January, any other selling from this dip was out of fear
  • The next court hearing for this case is in late September, and therefore it is highly unlikely that more of these Bitcoins will be sold until that hearing
  • If the court rules that affected investors are to be reimbursed in Yen, the trustee already has enough funds from selling in Jan/Dec to cover the reimbursements, and therefore no selling
  • If the court rules that affected investors are to be reimbursed in Bitcoin, there will be no selling from the trustee required (however, reimbursed investors could sell if they wanted to)
    Although a recovery of some sorts from here would not be surprising once the market acknowledges that the situation is not as disastrous as thought, it is important to realise that we are still in a downtrend from our peak last year. The key points to look out for to potentially confirm a reversal of this downtrend is $13,000 (USD).

That being said, all technical indicators should be taken with a grain of salt as the release of news can skew these indicators, take MtGox for example.

In the short-term, expectations for a full-blown recovery may be disappointed as public interest continues to decline. However, it is usually times like these where accumulation is the best course of action. If the top Bitcoin addresses in terms of holdings have been accumulating (they are), it just means that there will be less public supply in the future.

Summary
Right now, the market is in a no trade zone, the bears and bulls seem to be at a stalemate which leads to a build up of volatility, and being caught on the opposite side of the result will result in heavy losses. Instead, it is better to wake for the market to make a decision on which direction it will be moving in, and follow that path. A break below $8,800 USD would most likely result in further decline, whereas a break above $9,600 and then $9,800 USD could push us up to test the $11,700 USD range once again.