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#Updates, #VideoUpdates

How to Play Bitcoin’s Break Above $6,000

Bitcoin (BTC) broke through $6,000 this week. This is a major milestone I've spoken about quite a few times this year.

It signifies that the bottom is over, and that we're now in the beginnings of a choppy bull market.

Of course, we will continue to see dips in the market. But the highs will get higher and higher.

Fortunately for us, while bitcoin is up all the other cryptos are down. Since we are still accumulating, any dips in prices create opportunity for us.

To top bitcoin’s news off, it looks like Fidelity will enter crypto trading within a few weeks.

Add this to Ameritrade and E-Trade’s move into crypto (discussed in last week’s update), and suddenly you have almost 100 million brokerage accounts with access to crypto.

And this doesn't even take into account all the on ramps that are being built for institutional money to enter the space.

Two Key Takeaways

All of our cryptos are rated a buy right now. But last week, I gave you five specific buy recommendations to focus on.

This week, here is what I recommend:

1: If you don’t own bitcoin or ethereum (ETH), buy them.

Yes, there may be future dips. But once Fidelity, Ameritrade, and E-Trade launch their crypto platforms, these two coins will be hard to get at recent prices.

2: If you already have BTC and ETH in your portfolio, use the current dip to add to any other positions you have from our recommendations.

Right now, everything in our portfolio is still on sale. Take advantage before the market continues to rise.

That said, don't spend all your money in one go ― we'll be adding to our portfolio as the market progresses and opportunities emerge.

We recommend taking your yearly crypto budget, dividing by 12, and then spending that amount each month. It's a simple and well-used method to create a valuable portfolio.

Remember: The name of the game in investing is patience and discipline.

Many people fled the crypto market when prices fell, when they really should have been buying. They're the ones who buy at the highs... and sell at the low.

Those of you who stuck around will eventually sell to that same crowd once we hit the next bull market highs for huge profits.

I’m looking forward to it.

Sincerely,

Kamal Ravikant

Co-editor, Altucher's Crypto Trader

#Updates

[Video Update] Taking Profits

I have a brand-new video update ready for you. And I’m also including a write-up (below) on the specific actions I discuss in the video. I recommend that you view both.

In the first part of this write-up let’s review the 10% rule for taking profits in crypto.

The 10% Rule

When a crypto doubles, it’s time to start taking profits. You can make a lot of money in a bull market frenzy and still own most of the crypto itself.

We have three positions in our portfolio that have doubled or nearly doubled if you bought during our initial recommendations, discussed below.

Here’s what we suggest: Sell 10% when they double and take that cash off the table.

Don’t reinvest ― simply keep the profits. And get used to crypto making you money! This is important psychologically as an investor.

Here are the three positions:

#1: Bitcoin (BTC)

Bitcoin has increased 85% since we recommended it on Nov. 19, 2018.

Let’s use the 10% rule to grab some profits.
Set a limit order to sell 10% of your holdings and take profits at $10,000.

That said, if you are planning on buying more BTC as per my advice in the video, then you can skip this. But if you have enough, then take the 10% profit.

#2: Ethereum (ETH)

If you bought ethereum at $166, based on our recommendation on April 12, 2019, this applies to you.
Set a limit order to sell 10% of your holdings for $332 when it doubles. Take those profits.

#3: EOS (EOS)

If you bought EOS at $3, based on our recommendation on Nov. 27, 2018, your position has increased 125%.
Sell 10% of your holdings and take profits.

A Note on Crypto Taxes

This month, the IRS said it’s shifting its focus from large-scale tax fraud and crime (like Silk Road and scam companies) to individual taxpayer compliance. The IRS has said its “ahead of the game” on crypto.

Here at Altucher’s Crypto Trader we’ve always been ahead of the game on crypto taxes.

Because we have a long-term investment strategy, we haven’t sold a lot.

But when we do, we want to keep the records we’ll need for Uncle Sam.

In order to properly declare these gains, you need to record the price when you bought these cryptos, the price at the time of sale, and the amount at which you sold.

Keep this record for your accountant at tax time.

incerely,

Kamal Ravikant

Co-editor, Altucher’s Crypto Trader

#Updates #VideoUpdates

#Updates #VideoUpdates

What is the value of YEC?

A: We have no way of knowing what the value of YEC will be. It depends entirely on the demand for it when it’s released. Some new coins created at forks are worth very little. Others, like bitcoin cash (BCH), became major cryptos.

Sincerely,

Kamal Ravikant

Co-editor, Altucher's Crypto Trader

#Updates

Approaching Our BTC Limit Order

We said markets would be choppy for the near future ― that bitcoin (BTC) is on its way up but it won't be a smooth ride. The last few weeks have confirmed exactly that.

The good news? There's still time to buy bitcoin.

While the days of $4,000-bitcoin are over, we still have time to accumulate at dips. (Since we believe in the long-term value of bitcoin, it’s a good thing those $4,000 days are behind us.)

We placed a limit order for bitcoin at $10,000 on July 16. At the time we said that if the market dips and you can add to your bitcoin at that price, you won’t regret it.

Markets were up recently and they’re down today. This is expected. If you set a limit order for BTC up to $10,000, that order could trigger today.

If you haven’t yet set that limit order and still wish to add to your bitcoin, there’s still time to do so.

Buy bitcoin (BTC) up to $10,000.

Sincerely,

Kamal Ravikant

Co-editor, Altucher's Crypto Trader

#Updates

New Trade Alert: Consolidating into Bitcoin

In last week’s video update, I mentioned that we were soon going to reallocate and consolidate our portfolio.

We’re going to begin that portfolio consolidation with zcoin (XZC).

Zcoin remains an interesting privacy crypto, but the market conditions have changed since we first invested in April 2018. Because of this, we’re selling into bitcoin (BTC) as we head toward the next bull run.

We originally added zcoin to our portfolio for several reasons.

Although we hold two other privacy coins, there was no clear winner for that category in our portfolio and privacy is an important use case for crypto.

Zcoin’s technology is based on privacy cryptography that dates back 25 years. It can be audited, which is a unique feature, and users can earn XZC by creating a “masternode.”

It handles privacy in an interesting way ― by issuing and burning coins in certain denominations. Meaning, you’ll never have ties to an old coin with a questionable history. This also cuts ties between owners while preserving the integrity of the amounts on the blockchain.

Zcoin is also one of the oldest coins out there, dating back to 2013. Its team is made up of some of the original bitcoin coders.

At the time we invested, zcoin was gaining use in Southeast Asia. Our bet was that zcoin would be one of the winning privacy cryptos.

At this point, it’s not.

To be fair, this isn’t all their fault ― we still believe in the team and the use case behind zcoin. But some fundamental shifts in the market are preventing zcoin’s value from growing.

The Regulatory Landscape

Since our investment in zcoin, several global regulatory developments have taken place.

Japan banned privacy cryptos… Korea’s OKEx just delisted them… Coinbase UK delisted zcash over the issue of privacy… and U.S. exchanges became much more gun-shy about the types of coins they could list.

Financial Action Task Force (FAFT) regulations regarding the “travel rule” ― used to protect against money laundering and improper use of fiat ― are now being applied to digital currencies as well. In order to comply with these regulations, crypto exchanges and other crypto businesses have to report certain customer information when transferring crypto. Because privacy cryptos mask this type of information, they’re out of compliance.

Now, I’m sure you’re wondering why zcash (ZEC) isn’t affected by this.

Zcoin is private by default. Zcash, by contrast, is not. This is how ZEC has been able to secure and maintain high-volume exchange listings like Kraken, Coinbase, and even Gemini, which is regulated by the New York State Department of Financial Services (one of the hardest licenses to get).

None of these exchanges support ZEC’s “shielded” (private) transactions ― only the public transactions. ZEC thrived by having the option not to be private.

Zcoin doesn’t have that ability. As a result, it’s struggled to gain the exchange listings and use it needs to grow.

Twenty-four hour volume for zcoin is about 1.3% of ZEC and 4% of XMR, and there is only one major exchange accessible to U.S. customers that lists zcoin: Bittrex.

Additionally, this year zcoin found a cryptographic flaw which let an attacker create XZC out of thin air (about 1% of all XZC worth). The team fixed the flaw quickly, but more zcoin is circulating as a result.

Of course, 1% isn’t enough to be significant, but given the current regulatory conditions surrounding privacy coins and zcoin’s lack of volume, we don’t think it will be the winner for privacy. Our funds would be better positioned elsewhere.

Sell zcoin (XZC) and trade for bitcoin (BTC) at market prices.

Sincerely,

Kamal Ravikant

Co-editor, Altucher’s Crypto Trader

#Updates

Every week now, I look at the crypto markets and there's really nothing new to report.

But again, I promise to provide updates as needed in Alliance updates and the Altucher’s Investment Network newsletter.

The crypto journey will continue to be a great journey. I have held onto my crypto holdings since day one of this adventure and will continue to do so.

Just keep in mind that the Crypto Trader tab on our website will be going down shortly. So please download anything you wish to save as soon as possible.


Sincerely,

James Altucher

Co-editor, Altucher's Crypto Trader

#Updates

Conversational AI Comes of Age

In 1950, computer scientist Alan Turing proposed a test to evaluate the sophistication of artificial intelligence (AI).

In his paper, “Computing Machinery and Intelligence,” Turing suggested testing a computer’s ability to think by proposing a test, called the Turing Test. If a computer could effectively hold a conversation indistinguishable from one you might have with a human... it would pass the test.

Since then, the Turing Test has remained a benchmark for AI developers around the world.

In recent years, many of us have had the chance to try the Turing Test ourselves with smart devices like Amazon Echo or Google Assistant.

However, when you start to ask more challenging or strange questions like “Alexa, how many siblings do you have” or “Hey Google, what’s your birthday?” these devices predictably will admit that they don’t understand or don’t have an answer.

Soon, this could be set to change.

Earlier this summer, AI development firm OpenAI released a software package called GPT-3, which is capable of engaging in increasingly dynamic conversations.

When asked questions like, “Why don't animals have three legs?” GPT-3 is capable of producing logical responses like, “Animals don't have three legs because they would fall over.”

It can even handle more complex questions, which require knowledge about the world like, “Which is heavier, a mouse or a toaster?“

If you’re an iPhone user and ask Siri these same questions, the AI will pull up internet search results… but it can’t provide an answer itself.

That said, GPT-3 still has its limits. Unlike Alexa or Google Assistant, the program doesn’t seem willing to admit when it doesn’t know the answer. The program also displays its limits when posed with trick questions.

For example, a blogger recently posted his experience using GPT-3. The user asked GPT-3 the question, “Who was the president of the United States in 1600?”... and received the response. “Queen Elizabeth I.”

Although the answer is close, it’s still not quite there — demonstrating the very real challenges faced by scientists hoping to solve the Turing Test.

However, the advances of GPT-3 also show the incremental progress in conversational AI.

Beyond the party tricks currently offered by the Amazon Echo and others, conversational AI could ultimately become a multibillion-dollar industry, where AI is used to replace all sorts of human interactions. With advances like GPT-3, that future might be closer than we think.

Sincerely,

James Altucher

Editor, Altucher's Investment Network

#Updates #ALN