Flow – Issue #74

Jun 27

In this newsletter, we are profiling Flow [FLOW]. In previous newsletters, we have profiled Bitcoin, Cardano, Solana, Fantom, and many others. Access all our newsletters in our archives at madcapx.substack.com.

The Short of It

Flow was created because of the issues of Ethereum; it has had some success and ranks #33 on CoinMarketCap. As an investment for your portfolio, it has been a disaster; even when compared to the slumping Bitcoin price, the losses are as high as 93%.


Profiling

Flow was created by Dapper Labs, the company that created the popular CryptoKitties NFT collecting game. The founder is Dieter Shirley, who created Flow in 2019 as a response to the costly transaction fees on the Ethereum blockchain. It was made to be an alternative blockchain ecosystem to power games, apps, and their associated digital assets.

The total supply of their native token, FLOW, is currently a little over 1.3 billion and is inflationary. It is used for payment of network services, deposits for data storage, staking on nodes, collateral for secondary tokens, and governance. Flow uses an efficient Proof-of-Work protocol for consensus and claims to be very scalable without the use of sharding. The process is broken up into four roles: collection, consensus, execution and verification, each fulfilled by different types of nodes. The average block time is three seconds, allowing for around one hundred transactions per second.

Smart contracts on the platform are written in a resource-oriented programming language called Cadence. The style and syntax of the language are based on modern languages such as Swift and Rust. The language was built with developers in mind, providing clarity, safety, security, and intuitive resource ownership. Flow also offers upgradeable smart contracts to make bug patches easy to implement. 

Flow has previously received considerable funding from investors, including the NBA (for their related NBA Top Shot NFT project). To see a list of all the NFT projects currently using Flow, check out flowverse.co. If you are a developer and would like to get involved, you can see if you qualify for a grant. You should also check out the developer portal at onflow.org.

Flow offers an opportunity for investors who believe in the potential of NFTs and blockchain applications without relying on Ethereum. But, know that the system and tokenomics were meant to remain stable in the long run, and as such, this is not something that will rise significantly in value.


Trend Lines

FLOW/BTC pairing from July 30, 2021, to the lowest point on June 13, 2022, has lost 93% of its value. Since mid-October 2021, the decline has not been as dramatic as it was in the first couple of months. However, the loss has still been 72% from the peak in the more gradual decline to today. At this point, there does not seem to be any reason to hold as an investor FLOW for the longer term. Look for a solid daily candle to close above the trend for a possible reversal.

FLOW/USD pairing shows you the peak at $36.61 and a bottom recently of $1.16 for a loss of 96%.

When zooming in to the 4-hour chart, there are opportunities to make trades that can be profitable. Once FLOW hit the all-time low on June 18 of $1.16, it topped out at $1.81 for a gain of 55%. Yesterday it broke below the upward trend line and has been unable to break back in.

Trading FLOW does have upsides if you are careful to keep your stop loss close behind.


The Other Trend Lines

For BTC/USD, here is the long/bullish chart that was made by TradingView user MMBTrader. His comment about the chart is below:

.. major support zone here can pump the price and now the first resistance that is the red trendline broke and the retest is almost completed. 20K$ support zone now is major support here that is a blue zone on the chart.

His assumption is that the first resistance would be around $23,300 and the next resistance at $26,568.

The following chart by cryptonrek shows the short/bearish scenario with BTC going down to $11,000 in July 2022. Here are his comments:

Trend tracked since 26th April or so, might as well publish it so it stops being right. Sentiment outside of crypto with regards to crypto shows extremely low positive interest, within crypto… it’s the same conversation on repeat post-2013 and post-2017; which likely equates to “not bottom” at $20k, but who knows. Tomorrow Tim Cook can launch AppleCoin claiming that iPhone usage can be used to earn AppleCoin ushering a new era of currency as they pretend to have invented it, I digress. $11k is an easy range to see if BTC can’t get back to a solid 4h close at/above $23k before end of month. By mid-July if still sub $23k, the probability of BTC behaving like mid-2018 elevates to favor shorts to at least sub $15k. ‚Ķmarkets all look about the same right now; so if looking for confirmation of some kind of reversal signal for the bulls… look to the boring stuff before hopping back into trash coins & BTC.


Portfolios

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 92% 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 $19,733 and $21,898 USD in value.

FUND 3 started on November 16, 2020, with $1000 USD in value and was invested into BTC, LTC, ETH, and ADA. The total amount of BTC value from the four coins has had a gain of 60% since the start. The USD fund value is up 99% since the beginning. We will hold these positions to see how well it does against our BTC-only portfolio. LTC is down -37% against BTC. ETH is up 108% against BTC since the start. ADA has a gain of 278% against BTC and 365% to USD.

BLWX Fund started on February 22, 2021. They all are assets we have profiled in the newsletter, and we are interested in how they will perform this year against BTC. BAT has a gain of 85% against BTC since the start; LINK is down -55%, WAVES is up 38%, and XMR is up 38%. Overall, against BTC, the fund is up 27% and down -51% against USD.

Overall, Bitcoin should be your first choice as an investment in crypto, though many digital assets can give you excellent gains if you manage your risk. As a long-term investor, we see it as our most significant portfolio investment. If you are a day trader, there are many assets to put on your watch list. Look through our previous newsletters to find some.


About

MadCapX research newsletter is written by the Madbyte Team. You can learn more about Madbyte and MadCapX on our websites.

Madbyte does have its own token called MADX on the Fantom and Ethereum networks and under the symbol Madbyte on the Waves network. The tokens are interchangeable on Madcapx.com.


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.