Welcome to this edition of Coin of the Week where we will be discussing Monero, the only truly anonymous cryptocurrency. I’ll spare you the technical jargon of how Monero accomplishes its complete anonymity, but it’s a mix of Private Send, RingCT, Stealth Addresses, Ring Signatures, and their next development, Kovri integration.
The reason we’ve chosen Monero this week is not only because the chart is looking good, it’s also because of the upcoming fork, MoneroV. While XMR has no hard cap per se, it has a functional supply cap of around 15 million coins. MoneroV will be launching with a hard coded cap to eliminate this “problem”. The fork should be happening right around the middle of March and will be distributed at a ratio of 10:1 XMRV-XMR.
There has currently been no news from exchanges about supporting the fork, therefore you’re better off holding Monero in a “My Monero” wallet or on the CLI or GUI wallet(s) on your computer to receive MoneroV. If there is an announcement that any major exchanges will be supporting the fork, that may lead to an even larger increase in the price as buying/trading XMR to receive your XMRV becomes that much easier.
Anytime there’s a hard fork with an airdrop, especially on a coin in the top 50 it’s going to generate some hype. What can we say? People love “free” money! The real concern is are they just trying to capitalize on the Monero name? Does this coin really solve a problem in the crypto ecosystem that Monero doesn’t already accomplish?
Looking at the chart (XMR/BTC) we can see that Monero is having a huge breakout. During the coming 12 days there is a high probability that this uptrend will continue, of course with some volatility in between. Our play for these forks is to capitalize on the impending uptrend, while not looking to acquire the forked coin. On a coin like Monero which can be traded on margin at Bitfinex, we would be looking to take a leveraged position and lock in the profits on the way up. You could try to time the ups and downs to hit some long and short positions but that’s probably not necessary when the uptrend is almost guaranteed, at least until the first major dump. We generally would trade this versus the USD(T) pairing on Bitfinex, however both XMR/BTC and XMR/USD look primed and could potentially break ATH’s (all time highs).
The plan outlined below to profit on a hard fork relies on exchanges supporting the fork, so it may not be relevant for this particular one.
I would like to cover one last way to attack these hard forks that might bring the best of both worlds. By swing trading the (generally) parabolic uptrend leading up to the fork and locking in profits, we can then wait post-fork and trade for the forked coin when it gets listed on an exchange. The reason this works so well is that all of the people who held for the fork scramble when wallets are unlocked on the exchanges. They try to sell as quick as possible and the price plummets leaving many selling at prices lower than what they purchased for. Those same people are now lining up on the exchange to sell their airdropped coin the second it’s available to compensate for their previous loss. This in turn leaves us in a prime position to pick up the forked coin on the cheap with some of our profits we locked in prior!
If you’re already a Monero holder, we would recommend you take your “free” coins, although if you aren’t sitting on Monero this is a great opportunity to do some swing trading with it.
So traders, are you going to play Monero as a swing trade and lock in some profits or are you focused on getting the MoneroV coins?
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