In this newsletter, we are profiling IOTA. In previous newsletters, we have profiled Bitcoin, Ethereum, Litecoin, Polkadot and many others. Access all our newsletters in our archives at madcapx.substack.com.
The Short of It
IOTA is moving forward with more features that could leapfrog it ahead of several other alts. But is it enough to get it out of a bear trend that has been going down almost since it began trading?
This portfolio section gives you an idea of what sort of return you can get when investing in crypto assets.
BTC/USD FUND is up 353% since October 1st, 2020. Since this is a long-term holding, it is best kept in cold wallet storage or a safe custody solution. We continue to see a long-term hold position as our best stable alternative. This past week bitcoin has been ranging between $43,000 and $54,180 USD in value. BTC did not hit an all-time high this week. It has been going down every day except today. It seems like $43,000 was the low for this correction and now seems to be heading back up toward $50,000.
FUND 3 started on November 16, 2020, with $1000 USD in value and invested into BTC, LTC, ETH, and ADA. The total amount of BTC value from the four coins has a gain of 55% since the start. This portfolio continues to add more BTC value weekly. Against USD, it is up 352% since the start. We will hold these positions to see how well it does against our BTC-only portfolio. LTC continues to slide down and is now in the minus by 17% against BTC. ETH is up 15% against BTC since the start but down from last week. ADA continues to be the star, from up to 198% last week, to now at 322% since the start against BTC and 1116% against USD. ADA is rolling out their newest additions to their blockchain right now. It reached 3rd on the coin market cap behind only ETH and BTC in total value.
Last week we were introducing this basket of coins and calling it BLWX Fund. They all are assets we have profiled in the last few months, and we are interested in how they will perform in 2021 against BTC. When we made this portfolio, crypto, in general, started a downward move for the week. BAT and XMR have outperformed BTC as you can see in the chart that BAT is up 14% and XMR is up 7%. Overall, against USD, the portfolio is down 8.14%. Let’s see how this is next week.
Overall, Bitcoin should be your first choice as an investment in crypto. As a long-term investor, we see it as our largest investment. Several altcoins will out-perform BTC, and hopefully, as we bring you this newsletter, you will find some great ones to invest in. Madbyte does have its own token called MADX and is available within our member website.
Officially launched in 2016, IOTA was the first cryptocurrency to take advantage of the devices that are connected to the Internet-of-Things (IoT). The founders are Sergey Ivancheglo, Serguei Popov, David Sønstebø and Dominik Schiener. IOTA is not your typical blockchain but rather a Directed Acyclic Graph (DAG), which ensures speed and high scalability. Being feeless, tamper-proof, and having low resource requirements, makes it ideal for microtransactions on small devices.
IOTA has a maximum supply of 2,779,530,283. Their network is nicknamed “The Tangle,” and transactions within it are feeless, but requires users to approve the previous two and perform a small amount of Proof-of-Work (PoW). You might see MIOTA used on the exchanges, which just equates to 1,000,000 IOTA.
One major point of contention is that the network is currently not fully decentralized, as consensus is ultimately decided via a coordinator node operated by the IOTA foundation. This is a single point of failure for the network, and there is a solution being worked on called Coordicide, which will replace the current coordinator node with node voting on double-spend attempts. Without the coordinator or Coordicide, IOTA would struggle with safety.
With a number of partnerships with companies such as Jaguar / Land Rover, DELL, Trade Mark and many others, you can be sure the network will continue to be used far into the future. They have also developed optional Winternitz signatures, which allow IOTA to be resistant to future developments in quantum computing.
Nano is the original competition to IOTA, but it is not DAG-based. Rather, Nano has a single chain per user address that only the owner can append blocks onto. While IOTA may currently have its drawbacks in being ultimately centralized, with the upcoming release of IOTA 2.0, which no longer depends on the coordinator node, the network becomes fully decentralized. Along with that comes their layer 2 protocol stack (Qubic), which will allow smart contracts.
With the exploding growth of everything being interconnected, we see a bright future ahead for IOTA.
The chart below shows the IOTA/BTC one-week chart since 2018. Losing 90% of its value (from the solid candlestick highs) to the current price. In the last 20 months, the losses have been a lot less, but the trend lines have been bearish. Since the beginning of 2021, we have seen volume increase dramatically, pushing the price higher from the bottom of the support. Those who were paying attention to IOTA would have seen this change and bought some.
On the daily chart going back about 13 months, we see the current trend down. Like many other altcoins, IOTA bottomed at the end of 2020 and went up very quickly. For a total of 282% gain. But unlike some altcoins, IOTA did not break the top of the trend line as of yet.
Here’s a chart below from someone who was paying attention and their comments related to IOTA's entry point. The pink area shows the 11 days after the chart was published. The chart and user comments are also found here.
At the beginning of February, the market gave us a great opportunity to earn extra profits, which is exactly what we did.
We at Pennygene turned our attention to the IOTA/ BTC chart back in early January 2020 and have kept watching. What attracted our attention was that this asset was falling fast almost all the time from August till the end of December 2020, but then the first 1W bar of January showed us that the price reached good support at 0.0000094. Also, it was the lowest price point since the launch. After a month of waiting, our efforts paid off. At the beginning of February, we placed our long positions at 0.0000143, of course using a stop loss. And now we have been in the position for more than two weeks. At the moment, PNL is 102%, and we are not going to exit this long position yet.
Important: Never be guided solely by the notion of the "lowest price in the history of the asset" this price floor can be updated at any time. Your strategy has to take into account a combination of several factors. Especially when it comes to a low-capitalization altcoin, at this point, we cannot recommend you to go long on this asset because much of the growth has already happened.
In any case, if you are interested in IOTA, you need to wait before placing a new order. Maybe the last 7 days after the active growth is just a consolidation and liquidity gathering for further growth. Maybe after that, you will get a new opportunity to enter this asset.
MadCapX research newsletter is written by the Madbyte Team. You can learn more about Madbyte and MadCapX on our websites. This weekly newsletter is a paid subscription and supports the team and the Madbyte projects. The regular cost is $5/month or $50/year. Cancel anytime.
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Disclaimer: Nothing in this newsletter is intended to serve as financial advice. Therefore, do your own research and due diligence before applying any of the techniques highlighted in this post. Any risks or trades based on this newsletter are committed at your own risk.