2019 10 CryptoCapital MonthlyReport
2019 10 CryptoCapital MonthlyReport
BEFORE CRYPTO.COM
Before rebranding as Crypto.com, the company was known as Monaco. In July 2018, Monaco purchased
the domain Crypto.com from a cryptography professor who had held it since 1993.
The deal was rumored to be worth at least $10 million. It may seem like an unnecessary expense, but by
branding itself as Crypto.com, Monaco instantly achieved a unique position in the industry.
You see, one of the greatest investments I ever made was the purchase of the domain Wallstreet.com. I
registered it for $7 in 1994. Over the next five years, I was inundated with offers to buy it. But I finally got
an offer I couldn't refuse in 1999. It was for $1.03 million.
While its prepaid MCO Visa card is its flagship product, Now, I could find speculators and borrowers to lend my
Crypto.com also offers several other banking services... crypto out to on my own. But Crypto.com's interest-bearing
accounts take care of all the work for me. You simply
Crypto Earn
deposit crypto or stablecoins (cryptos that are pegged to
The Crypto Earn platform consists of crypto savings another asset, like fiat currencies) on the Crypto Earn
accounts that pay interest in crypto. platform, and you begin accruing interest. To earn the
highest rates, you must agree to lock your crypto on the
Crypto Earn incentivizes users to purchase and stake their
platform for three months. If you don't want to lock up
MCO holdings. New users must stake a minimum of 500
your crypto for a specific time period, you can still earn
MCO (about $1,800) and agree to lock up their crypto for
rates of up to 2% on cryptos and up to 6% on stablecoins.
three months to receive Earn's highest tier of interest rates.
This takes MCO off the market and restricts circulating The company has not disclosed how much crypto it has on
supply, which should push MCO prices higher. The service deposit. But competitor BlockFi has at least $100 million in
launched in many U.S. states in June. crypto on deposit. Another competitor, Celsius, has approx-
Crypto.com has two tokens in the marketplace: MCO and Crypto.com Coin (CRO).
CRO powers Crypto.com's blockchain, Crypto.com Chain. Crypto.com's blockchain is focused on high
performance. With transaction times under one second and the ability to process more than 50,000
transactions per second, it's competitive with major credit-card networks like Visa and Mastercard. It
also lets users pay in their preferred currencies. Merchants can also receive their preferred currencies,
regardless of what currency customers pay with.
So CRO is more of a "below the surface" technology for money transfers and payment processing. MCO
currently runs on the Ethereum network, but it will eventually migrate onto CRO.
Then you would move the stablecoins to Crypto Earn and But Crypto.com is positioning itself to be the next
begin earning 12% interest on them. You'd have to recom- Goldman Sachs or JPMorgan Chase... a global bank that
mit your funds to Earn every three months. (You can also serves individuals and corporations around the world.
grow crypto holdings that you don't intend to sell – such as
And unlike traditional banks, the app, token, and the
BTC and ETH – by depositing them in the Earn program.)
blockchain work together between depositors, borrowers,
Your 12-month return would be around $2,800. That spenders, and merchants in a very transparent way.
would bring your holdings up to $26,000, plus the current
You see, Crypto.com gives investors a way to "own the
market value of your 500 MCO tokens.
bank."
The "Loss-Leader" Strategy
This model is unique. For example, investors own a bank's
With this strategy, you would make money off your current stock, but there's no incentive for them to use the bank's
fiat spending habits by earning cash back on purchases services or tell their friends about it. The stock is merely a
and getting reimbursed for your Netflix and Spotify vehicle for transferring profits from the bank's customers
subscriptions. to shareholders. And a bank isn't incentivized to please its
Here's how it would work... customers as much as its shareholders.
You would start using Crypto.com's prepaid MCO Visa Crypto.com flips this model on its head. To get the most
card to earn up to 5% cash back (payable in MCO). This benefits, users must hold MCO. And the more MCO
requires staking 500 MCO (which would cost around they hold, the more benefits they receive. This creates
$1,800 today). loyal holders who actually use Crypto.com's services and
Assuming you spend $3,000 a month on the card, you'd are incentivized to tell others about it. As the service
earn around $1,800 in MCO over the next year. Plus, grows in value, so should the value of MCO. That's why
you'll profit on any rise in the price of MCO. we believe MCO is the most undervalued crypto on the
market right now.
For people who already subscribe to Spotify and Netflix,
Crypto.com would be even more profitable. As crypto evolves, Crypto.com is staying at the cutting
edge of any changes. That will allow it to capture more
After staking 500 MCO, you're eligible to get reimbursed
and more market share from traditional banks... especially
for your bills from Netflix (up to $12.99 a month) and
if we see the launch of Facebook's proposed crypto Libra
Spotify (up to $9.99 a month).
and China's "central bank digital currency."
Each month, Spotify and Netflix would charge your
MCO Visa. The Crypto.com app would then deposit the With access to potentially billions of users, Libra and a
total into your Crypto.com wallet as MCO tokens. When Chinese digital currency could become more important
that happens, you'd simply need to log in to the app and than traditional fiat currencies. It could take banks years
"top up" your Visa with the MCO tokens that you receive to begin offering services in these new currencies. Crypto.
each month. com could do it in weeks or months.
Over 12 months, Crypto.com would pay up to $22.98 per But all the services in the world and the possibility
month ($9.99 + $12.99) for an annual return of $275.76 on of earning big returns won't attract investors without
an initial investment of $1,800. security.
ACTION TO TAKE
If you haven't already, buy Crypto.com (MCO) up to $4.
Remember, all of your crypto positions combined should be no more than 1% to 5% of your
investment portfolio, and bitcoin should be your single largest holding.
Complexity Rating: 2
Wallets: Crypto.com mobile app, Exodus, Keepkey, Enjin, Ledger Nano S, MyEtherWallet,
MyCrypto.com.
Stop Loss: We will not be placing a stop loss on this crypto as we expect most investors to hold
their tokens in the app's Crypto Earn account.
READER MAILBAG
Every month, we answer reader questions. If you have any The government does have a vested interest in protecting its
questions for us, please e-mail us at crt@stansberryresearch. control over the money supply, but bitcoin won't be a threat
com. Just remember, we can't offer personal advice. to the dollar unless it's adopted globally. And a ban would
Q: Do you think the U.S. government will ever attempt stifle innovation in the U.S. and put it at a competitive
to ban bitcoin? disadvantage if bitcoin does reach global adoption.
A: In short, no. U.S. government agencies have been Now, we' don't believe bitcoin will completely replace fiat
tracking (and regulating) bitcoin-related activities since at currencies like the dollar. We expect dozens – or even
least 2011, with the launch of the anonymous marketplace hundreds – of currencies to co-exist in the future. There
Silk Road. If the government wanted to ban crypto, it will be government money (like the dollar), corporate
would have done it when the market was smaller. The fact money (like Libra), and "money of the people" (like
is, bitcoin transactions are far easier to track than cash bitcoin). Each currency will be instantly swappable for any
(which the government likes). other currency at market rates.
The BGCI plunged more than 17% on September 24. Bitcoin holders who anticipated a spike in bitcoin prices
once Bakkt launched sold their positions. That selling
The index's move echoed a 14% decline in the price
caused more selling, which led to mass liquidations of
of bitcoin. Many traders attributed the fall to Bakkt's
leveraged long positions on the crypto derivatives platform
lackluster launch. Early trading volumes were lower than
BitMEX. More than $700 million worth of contracts
anticipated. Remember, Bakkt is the bitcoin futures
were liquidated, according to crypto data company
exchange started by the team behind the New York Stock
CryptoQuant.
Exchange (NYSE), so expectations were high.
Markets have largely traded sideways since the decline,
though bitcoin and the BGCI are both in positive territory
for the year. Bitcoin is up around 124% and the BGCI
around 35% since January 1. So we're likely still in the
midst of a crypto bull market.
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your responsibility.
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Dash DASH 3 11/30/18 $96.29 $69.87 -27% Bittrex, Kraken, IEW Exodus, Jaxx, Trezor Buy up to $140 88
Digix Gold DGX 2 9/19/18 $40.34 $46.04 14% Kryptono, Kyber, Ethfinex MEW, Exodus Buy up to $50 97
Enjin* ENJ 2 12/19/18 $0.04 $0.06 63% Binance, LATOKEN, Bittrex MEW, Exodus Buy up to $0.25 90
Monero XMR 3 12/7/18 $46.07 $54.14 18% Kryptono, Kyber, Ethfinex MEW, Exodus Buy up to $120 98