Hi, Miko here.

I know people have been talking about crypto spring and enjoying the warm weather and rise in the price of Bitcoin. None of this blog post should be considered investment advice.

There is even talk of a “V” shaped recovery, or sharp rebound.

I think we have seen a recent lift, as a superwhale blasted through resistance levels and in fact liquidated 500M dollars worth of short positions. Those positions are likely blown out never to return.

Good thing about a wipeout like that is that we had an overhang of short sellers who will probably never return to this space… these were the “Bitcoin Zero” crowd who were convinced they could short Bitcoin all the way to zero.

Having cleared away the ghosts of “Bitcoin zero” we are still not in smooth sailing territory. We are still being lifted and lowered by speculation and by pump and dump. We wont see sustainable recovery for some time, and we will continue to see resistance levels as people previously burned try to get out at various price levels.

There are certainly major potential upside “dark horses” such as increased volume from areas like Brazil, Argentina, Venezuela and other countries where the local currencies are experiencing hyperinflation.

But the long awaited institutional adoption is slow in coming, there’s no sizable liquidity in “Security Token” and major crypto companies like CoinBase and Kraken have lost their heads of institutional product, suggesting that their businesses in those areas are not growing like gangbusters.

One of the hopes on the horizon for mass consumer adoption is the appearance of crypto payment associated messaging products such as Facebook, Telegram, Kik Messenger, Line, Kakao, Signal and others, all who have been written about as having significant blockchain projects in the works. When the messengers become wallet providers, significant volumes can be attained and new platforms will be formed.

Another promising area that may be combined with messengers (and wallets and exchanges) will be gaming (including but not limited to gambling). We will see the convergence of messengers which will bring users, platforms which will bring cryptographic assets and wallets and games which will bring functioning in-game economics. At the moment we principally have currencies that are looking for economies, but no real robust economies. In gaming we have lots of in-game economies but not enough currency. We will see the rise of game platforms that combine cryptographic assets with messengers within 2019 and many more larger ones in 2020.

Until we see some fundamental growth in volume, whether driven by nations, institutional adoption or by messengers and game platforms, we will continue to be in a purely speculative pattern, and we may see what I call the “Elmer Fudd” W shaped recovery which looks like WWWWWWWWWW (Wabbit).

The “V” shaped recovery I call the “Crypto Winter” thesis, because after winter there’s spring.

The “W” shaped recovery I call the “Nuclear Winter” theory. I think we may have many W shapes in a row because even with the “Ghost” of Bitcoin Zero banished, we still have ghosts like for example the ghost of Tether. We are still weeding through all of the scam ICOs.

One vector that may contribute to the rise of fundamental value in the cryptographic asset space is the rise of the IEO or Initial Exchange Offering. While at first I was skeptical about such offerings, speaking with the CEO of a major exchange and the CEO of a company that successfully completed an IEO actually got me to thinking that this might be a positive thing. Unlike ICO where there was virtually no diligence and no discernment, the diligence is now being outsourced to Exchanges. While historically exchanges have no track record doing diligence on companies, in the long run, exchanges that launch lots of shitcoins will impoverish their user base, which will eventually run out of money or realize they are being scammed over and over. Exchanges that exclusively list very good companies that add value to the economy will enrich their user base and eventually will increase their assets under management.

The last shape of recovery which we can theorize is what I call the “L shaped recovery” which is the thesis that it stays flat and simply doesn’t ever recover, at least for a long time. This scenario I call “Ice Age”, where winter goes on and on for years until the entire planetary biosphere is changed and the fate of species on earth is forever altered.

At the moment, I am favoring the W shaped thesis, with a possible multiple W time until we see the rise of mass adoption through messengers, gaming and the like.

The post Cryptocurrency “W Shaped” Recovery Thesis appeared first on gumi Cryptos Blog.

Here are the books I would recommend that would help you understand how we think.

Required Reading about Early Stage Investment

This book explains the power law distribution of venture returns which is powerfully instructive about how VCs behave and why, and what job they do on behalf of their partnerships. It describes phenomena like contrarianism, “secrets” and the last mover advantage. A distinct and innovative set of thought processes from an original person.

Another classic, Jason Calcanis is instructive about the math associated with early stage investment and the kinds of questions you will face when raising money from this class of investor. Very seminal treatise on how to navigate this complex asset class, early stage venture startup equity and convertibles.

Another all time classic, this book is essential for understanding the mechanics of technology adoption and provides a foundational set of metaphors that technology entrepreneurs must understand in order to navigate most efficiently across this divide.

Required Reading about Blockchain

This is on the required reading list if you want to do business with gumi Cryptos. For anyone interested in the emergence of a new fundamental internet protocol and the mindset of its creator in his or her own words. As an industry, the so-called “blockchain industry” has been bad at reasoning based on fundamentals, and this book will take you through a tour-de-force whirlwind tour through the considerations that went into one of the greatest inventions of this century.

Required Reading about Entrepreneurship

Another all-time classic, Guy Kawasaki lays it all out there. In a prescient way he lays out the groundwork for the lean startup manifesto with the quotable quote “Eat like a bird, Shit like an Elephant”.

The CEO Topic: Brilliant and entertaining read, instructive about the concept of “Wartime” and “Peacetime” CEOs and a great way to understand what experiences shaped a great venture capitalist.

The CEO topic, but mostly instructive on company culture and brand, but also on execution. Reads like an adventure novel, so fun and worthwhile.

The Sales Topic: One of the great classics that ushered in the period of modern sales automation.

The Product Topic: This book is instructive on the product market fit process and how emotionally and intellectually challenging it is. Not for the faint of heart and for people who have been there and continue to choose to go there. The true entrepreneurs.

Extra Credit

This one is yet another classic, Brad Feld presents a very entrepreneur friendly way of looking at deal structuring and legal terms. Required reading.

I like Ori Brafman and this is a good book that will help business people reason about the concept of “leaderless” organizations and it provides useful case studies of such organizations like “Alcoholics Anonymous” which is essentially based on an “open source protocol” approach, simply publishing openly the values and allowing decentralized organizations to take advantage of these intellectual advances.

An important and in some ways cautionary tale of a man who is inseparable from the culture of Silicon Valley. Worth reading.

The post The Mind of a VC: Reading List appeared first on gumi Cryptos Blog.

Hello.

The first step in getting financing from gumi Cryptos is to establish fit. If your investment opportunity does not fit our thesis or fund objectives, we can’t invest.

Our investment criteria is expressed by this short questionnaire:

1. Is your investment opportunity angel, pre-seed, seed or series A?
2. Do you use blockchain technology or provide a cryptographic asset?
3. Do you have a multi-billion dollar addressable market?
4. Can you provide a 20x or greater return on investment in the best case?
5. Do you have either licenses from an appropriate regulatory body or sound legal advice that your business and financing plans comply with all relevant jurisdictions?

If you’re unable to answer yes to all of the above questions, we are unable to business with you.

The post Investment Criteria: are you a fit for gumi Cryptos? appeared first on gumi Cryptos Blog.