Research 060918 PDF

Thomas J. Lee, CFA Robert Sluymer, CFA Sam Doctor Ken Xuan Alex Kern L.
Thomas Block
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thomas@fundstrat.com robert.sluymer@fundstrat.com sam.doctor@fundstrat.com ken.xuan@fundstrat.com alex.kern@fundstrat.com tom.block@fundstrat.com
Sep 6th 2018

CRYPTO FX STRATEGY
U.S. Portfolio Strategy
Thomas J. Lee, CFAAC
+1 212 293 7131
thomas@fundstrat.com | @fundstrat
Earlier this year, on 1/25/18, we
Alts
Data Science Research
asserted that alt-coins registered their
Sam Doctor
annual peak (based on % 3X in 3M, +1 212 293 7132
Slide 3) and subsequently called for alt- sam.doctor@fundstrat.com | @fundstratQuant
season to again restart sometime mid-
Aug/mid-Sept (report from 3/20/18, Technical Strategy
Slide 3). Rob Sluymer, CFA
+1 212 293 7135
● On 8/22, 97% of alt-coins were robert.sluymer@fundstrat.com | @rsluymer
down >70% in past 9M, a level Washington Policy Strategy

last seen 10/25/14 (Slide 6). We L. Thomas Block
+1 212 293 7130
labeled this the “alt-correction
Alts
tom.block@fundstrat.com | @TomBlock_FS
index.” Overw eight tokens: price target
Mid
Current YE18
● Back in 2014, alt-coin began to Bitcoin
18
$6,953 #### $25,000
rally on 11/1/14 (Slide 7), a week Ethereum $245 #### 1,900
later. Eth Classic $12 40 60
● Then, Alts rallied ~3X within 7

Alts NEO
Blockchain ETNs…
$21 150 225
weeks. We think a similar mini- Alts GBTC

Performance 1Q18 2Q18
$9 $24
3Q18 QTD
$30
YTD
rally is starting. Bitcoin (51%) (8%) 6% 6% (52%)
FS Crypto 10 (58%) (3%) (16%) (16%) (66%)

● Bitcoin fell 12% in past 24 hours. FS Crypto 40 (62%) (16%) (28%) (28%) (77%)
Historically, tactical buy signal— FS Crypto 50 Eq Wt (64%) (12%) (35%) (35%) (79%)
FS Crypto 250 (60%) (22%) (39%) (39%) (81%)
avg gain 1M/3M is 20%/50%, FS Crypto 300 (58%) (5%) (19%) (19%) (68%)
above LT average (Slide 9). FS Crypto Agg. (58%) (5%) (19%) (19%) (68%)
FS Commodity (54%) (8%) 1% 1% (57%)

Bottom line: While crypto markets FS Platform (55%) 6% (44%) (44%) (73%)
FS Privacy
document is(62%) (26%) solely
(21%) for(21%) (78%)
remain nervous, we believe This
FS Exchange
prepared
(16%)Global
19% Advisors.
(31%) (31%) (31%)
clients of Fundstrat
fundamentals remain solid. Oddly, FS
ForStablecoin
inquiries, please (1%)contact
(0%) Sales1% at 212-293-
1% 0%
This
7140document is prepared
or via email solely for Fundstrat clients.
sales@fundstrat.com.
alt-season is probably starting. For inquiries, please contact Sales at 212-293-7140 or via
For Reg AC certification and other important disclosures see Slide 38. www.fundstrat.com
Bloomberg:
September 1 FSGA
6, 2018
email sales@fundstrat.com.
Bloomberg: FSGA <<GO>>
<<GO>>
Click here for research library.

Thomas J. Lee, CFA Robert Sluymer, CFA Sam Doctor Ken Xuan Alex Kern L. Thomas Block
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Alt-season likely starting soon, matching prior cycles 97% of alts 70% off highs, in 2014, was a buy signal
YTD, active address growth explained price change Bitcoin rallies 1M/3M after falling 12% within a day
For exclusive use of Fundstrat clients only. September 6, 2018 Slide 2

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Earlier this year, we downgraded our view on alt-coins, believing the “annual peak” already took place in 2018, given the
breadth of participation (78% of alts were 3X in 3M). Then we saw bear decline largely over in March, but purgatory until
mid-Aug/mid-Sept.
Figure: Alt-coin calls since start of 2018

Per Fundstrat research
1/25/18: Alt-season over… 3/20/18: Alts purgatory, bull market late ‘18
“annual peak” of alts likely (given 78% 3X in 3M)…. Past cycles suggest alt-bull not until mid-Aug/Mid-Sept.
Source: Fundstrat, Bloomberg

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Purgatory tends to last 70-231 days historically (see our report on Mar 20) and we forecast this period to be 150-175 days.
• In our view, given the overhang from SEC actions (potential to require tokens to be registered) and the
potential backlash from Washington (on cryptocurrencies, with Venezuela Petro coin as an example), we think
mid-September is probably the more correct window.
Figure: The percentage of Alt-coins rising >200% in past 90D (3X gains)
Based on the liquid universe of alt-coins. 57 in 2014. 250 in 2015. 400 in 2016. >700 in 2017.
Jan Mar May Sep Nov Jan Mar May Sep Nov Jan Mar May Sep Nov Jan Mar May Sep
'15 '15 '15 Jul '15 '15 '15 '16 '16 '16 Jul '16 '16 '16 '17 '17 '17 Jul '17 '17 '17 '18 '18 '18 Jul '18 '18
90% 6/16/2017
80.6% 1/13/2018
77.6%
80%
70%
% Coins (liquid universe)
60%
Purgatory: Purgatory: Purgatory: Purgatory:
50% 110 days 231 days 69 days 150-175 days
40%
7/12/2015 4/5/2016
28.0% 29.6%
30%
20%
10% 9/4/2018
3/18/2017 0.4%
6/7/2015 8/29/2015 2/7/2016 9.3% 9/21/2017 11/12/2017
0% 5/29/2016
5.6% 3.1%
7.0%
5.1% 6.5% 5.5% Mid- Mid-
Aug Sep
+35 -48 +58 -51 +90 -97 +62 -64

days days days days days days days days
Source: Coinmarketcap.com, Bloomberg, other sources and Fundstrat.

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We have plotted the past purgatory periods, overlaid on 2018, below. And as shown, the window generally fell mid-
Aug/mid-Sept (hence, our original call).
• To match “purgatory” from the longest period—March 2016 bear (which lasted 231 days, see prior chart). This
would put the window to end “purgatory” around mid-Sept to mid-Nov.
Figure: The percentage of Alt-coins rising >200% in past 90D (3X gains)
Based on the liquid universe of alt-coins. 57 in 2014. 250 in 2015. 400 in 2016. >700 in 2017.
100%
Start of
purgatory
1/13/2018
77.6%
80%
60% Our March 2018 forecast:

mid-Aug/mid-Sept
40%
May 2016: 231 days
August 2015: 110 days

20%
Sept 2017: 69 days 9/4/2018

0.4%
0% 11/12/2017
5.5%
(20%)
Oct '17 Dec '17 Jan '18 Feb '18 Apr '18 May '18 Jun '18 Aug '18 Sep '18 Oct '18 Dec '18 Jan '19 Feb '19
Source: Coinmarketcap.com, Bloomberg, other sources and Fundstrat.

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The percentage of Alt-token down 70% from their highs soared to 97% on 8/22/18—which is the highest figure since at
least 2013.
• The previous high was October 25, 2014 when this figure reached 87%.
Figure: Alt-correction index: % of Alt-tokens down 70% from 9-month highs, rolling
Since 2013
Percent of tokens down 70% from last 240 day high

8/22/2018
100% 96.7%
10/25/2014
90%
87.1%
80%
70%
60% Alt-correction index

(% alts down 70% 9M)
50%
40%
30%
20%
10%
0%

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In 2014, after that alt-correction index reached 87%, the alt-coin season started.
• In 2014, Alts rallied 2.7X in 7 weeks—thus, we believe there is a good chance alt-coins rally from here.
Figure: % of Alt-tokens down 70% from 9-month highs, rolling

Since 2013
12/28/2013 1/28/2014 2/28/2014 3/31/2014 4/30/2014 5/31/2014 6/30/2014 7/31/2014 8/31/2014 9/30/2014 10/31/2014 11/30/2014 12/31/2014
100%
Percent of tokens down 70% from last 240 day high 10/25/2014
90%
87.1%
80%
70%
60%
50%
40%
Alt-correction index
30%
(% alts down 70% 9M)
20% 2/17/14
10%
$2.28 billion
0% 12/22/14
$1.24 billion
Coinmarketcap
total market cap
(ex-Bitcoin)
2.7X
7 weeks
10/25/14
$492 million 11/1/14
$453 million

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We have compared the change in active addresses (30D avg) vs start of year and the price performance of the token.
• As shown below, there seems to be a relationship between change in active users (% change vs start of year)
and the relative price performance of the token.
Figure: Comparative analysis: Platform/Core and Alt tokens YTD % change in active users (x-axis) vs % change in token price (y-axis)
YTD. Data from coinmetrics.io
Platform and Core ERC-20

BNB
(30%)
20%
EOS
(40%) XLM
DOGE
0%
(50%) BTC ZRX AE
VET
ETC
MANA
(20%)
Price % chg YTD

DCR
Price % chg YTD
(60%) DGB
XMR BTM
ETH TRX BAT
(40%) RHOC
(70%) MAIDLTCZEC
NEO ELF
WTC
GAS
BCH
LSK (60%) NAS
(80%) DASH ENG
WAVES QASHPOWR REP
LRC
ANT ICX
ADA OMG
FUNGNT
SNT
KNC
VTC PIVX XEM GNO ICN
PAY
(80%) DRGN
ETHOS
(90%) BTG XVG AION
SRN PPT
MTL
CVC VERI
SALT
(100%) (100%)
(100%) (50%) 0% 50% 180% 1000% (100%) (80%) (60%) (40%) (20%) 0% 20%
Current activer users (30D avg) % chg vs. 12/31/17 Current activer users (30D avg) % chg vs. 12/31/17
Source: Coinmetrics.io, Fundstrat, Bloomberg

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Bitcoin likely rallies in the next few weeks. As shown, Bitcoin has strong gains 1M after a sharp decline, like we saw in
the past 24 hours.
• The average gain is 20% over the next month, well above the average 12% gain seen in other periods.
Figure: Bitcoin Price

Past 2 weeks
Since 2010 Average Forward Return Win Ratio
N= 1W 1M 3M 1W 1M 3M
1D price chg -12% or worse 24 11% 20% 50% 71% 71% 58%
All days 1,948 2% 12% 45% 56% 57% 61%
Bitcoin sees average gains of

20%/50% after 12% declines
(1-day), substantially better
than historical averages.
12% decline within 1-day

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In traditional markets, we have often written about bear markets as simply re-tracements of the preceding advance.
• And the 2018 Bitcoin bear market resembles the 2014 bear market on this basis. The 2014 Bear re-traced
prices to levels 1-month prior to the top (took 405 days). The 2018 Bear seems to have achieved this but over
193 days.
Figure: BTC 2013-2015 and BTC 2017-2018 (two time frames)
Bloomberg
10/1/17 11/1/17 12/1/17 1/1/18 2/1/18 3/1/18 4/1/18 5/1/18 6/1/18 7/1/18 8/1/18 9/1/18
$19,000
$17,000
2014 Bear peak → trough: 405 days
2018 Bear peak → trough: 193 days
$15,000
$13,000 Bear market re-trace to price 1 month prior to top…
$11,000
$1,200
$9,000
$1,000
$7,000
$800
$5,000
$600
$400
$200
Bear market re-trace to price 1 month prior to top…
$0

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In our view, a better way to think about the 2013-2015 bear market is how much did the bear market “roll back” prices.
• BTC’s trough price of $183 (on 1/14/15) was BTC’s price 1-month prior to the 11/29/13 peak—in other words,
BTC bottomed at the price it traded at on 10/25/13, or $183.
Figure: BTC 2013-2015

Bloomberg
1-month
It took a 405 day bear market to

11/29/2013
$1,200 $1,137 re-trace 1 month of gains…
$1,000
$800
$600
$400
10/25/2013
$183 Same price 10/25/13, 1M prior to Nov peak…
$200
1/14/2015
$183
$0

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Looking at the 2013-2015 analog, perhaps the better way is to look at the price 1M prior to its peak of $19,511 on 12/18.
• BTC, one month prior to the 12/18/17 high was $5,605 (11/13/17), a price it saw on 2/16/18 (within a hair) and on
6/29/18. In other words, based on a time re-tracement of 1M prior to the peak, BTC has bottomed.
Figure: BTC 2017-now

Bloomberg 1-month
$19,000 BTC retrace to ~$5,700 is price 1- 19000
$17,000
month prior to peak… 17000
$15,000 15000
$13,000 13000
$11,000 11000
$9,000 9000
$7,000 7000
$5,000 $5,605
$5,922 Same price 1M prior $5,791 5000
to Dec peak…
$3,000 3000
10/1/17 11/1/17 12/1/17 1/1/18 2/1/18 3/1/18 4/1/18 5/1/18 6/1/18 7/1/18

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Below we detail the factors we see supporting an expansion of BTC dominance in the next few months.
• Basically, we see a few factors that are incrementally favorable for BTC. And only 1 factor that supports Alt-
coins.
Figure: Comparative Factors supporting BTC dominance (vs Alts)

Per Fundstrat
Rationale BTC Alts
Regulatory uncertainty about which crypto-assets will be securities is

SEC uncertainty an overhang on everything but BTC, Bcash, LTC and Zcash
VanEck ETF or other BTC VanEck has refiled to be the first US-listed Bitcoin ETF. While it is
ETF unclear whether this gets approved, this will benefit BTC.
Institutional custody solutions are coming along but favor larger tokens
Institutional custody like BTC
Re-launch of Visa/MC Wavecrest, a major backbone for the Bitcoin Visa/Mastercard ceased
Bitcoin Debit cards operations. Other platforms should relaunch in 2018.
Crypto-bear market Crypto is in a bear market. This should benefit BTC dominance.
$10 billion has been raised YTD in ICOs. Much of this is in projects
New capital flowing into
outside the US. And is where family offices and incremental capital is
ICOs focused. “Bitcoin is boring”
Some concerns that traders can be long physical BTC and sell futures
CME/CBOE manipulation CBOE/CME to manipulate prices towards expiration. Per Justin
Saslaw, Raptor Funds.

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Figure: The Fundstrat Crypto-currency Indices

Fundstrat reference indices.
Market Value % Return
Index $ % share Week Week Week Past

Index Ticker Description Price millions crypto
Mid cap and

YTD -3 -2 -1 Week
8/7/18 to 8/14/18 to 8/21/18 to 8/28/18 to
Sector Indices 8/14/18 8/21/18 8/28/18 9/4/18
small cap FS Crypto Commodity FSTOKCTB Likely to be classified as commodities

FS Crypto Platform FSTOKPLT Enables decentralized applications
$97 $190,557
66 $111,605
58%
34%
(53% )
(67% )
(10% )
(26% )
5%
3%
9%
10%
5%
(3% )
lead… FS Crypto Privacy

FS Crypto Exchange
FSTOKPVT Tokens with anonymity features
FSTOKDEX Tokens associated with exchanges
65
89
$10,779
$2,913
3%
1%
(73% )
(20% )
(25% )
(28% )
7%
5%
22%
17%
17%
(1% )
FS Crypto Stablecoin FSTOKSTB Tracks the fiat currencies 103 $2,312 1% (1% ) (0% ) 0% (0% ) 0%
Within sector
indices, Privacy
Index outperformed Market-Cap based Indices
others in past week. FS Crypto 10 FSTOK10 Top 10 largest Crypto-currencies $130 $274,045 84% (62% ) (16% ) 5% 9% 2%
FS Crypto 40 FSTOK40 Top 11-50 based on market value 108 $33,374 10% (73% ) (25% ) 14% 18% 4%
FS Crypto 50 Eq Wt FSTOKEQW Equal weighted FS Crypto 10 and 40 112 $307,419 94% (75% ) (28% ) 13% 16% 5%
FS Crypto 250 FSTOK250 Top 51-300 based on market cap 83 $13,448 4% (78% ) (29% ) 11% 13% 3%
FS Crypto 300 FSTOK300 FS Crypto 10, 40 and 250 125 $324,294 99% (64% ) (17% ) 6% 10% 3%
FS Crypto Aggregate FSTOKAGG Aggregate index 124 $325,968 100% (64% ) (17% ) 6% 10% 3%
Source: Fundstrat, Bloomberg.

* Base date of Cap based Indices is 9/30/17 and Sector Indices is 3/31/18

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Figure: Comparative Quantitative Score for tokens in OW-rated Platforms and Commodity Sectors
Per Fundstrat Technical Metrics
Market Composite 90D Relative Relative

Price Cap Current Technical Win 90D Price to Price to Weekly 5D 10D 30D 21 vs 50
Name Symbol (USD) Price (BTC) ($B) Coin Supply Score Ratio UV - DV 21 DMA 50 DMA RSI Return Return Return DMA
Commodity Index Constituents
Monero XMR $137.95 0.018739 2.3 16,380,861 1 46 5 133.1% 121.2% 47 34.2 49.1 17.6 11.9%
Bitcoin Cash BCH $625.07 0.084909 10.8 17,332,513 2 44 6 112.1% 95.1% 42 15.7 16.3 (11.9) 16.9%
Litecoin LTC $67.71 0.009198 3.9 58,162,203 3 41 (2) 113.3% 97.8% 39 12.3 16.9 (9.2) 15.5%
Bitcoin BTC $7,361.66 1.000000 127.0 17,251,037 4 56 (7) 108.7% 104.0% 49 5.5 8.8 4.1 4.7%
Zcash ZEC $156.45 0.021252 0.7 4,732,969 5 40 12 107.6% 91.3% 41 3.1 12.4 (13.7) 16.3%
Platform Index Constituents

VeChain VET $0.02 0.000003 1.7 86,712,634,466 1 48 63 125.9% 119.9% 45 12.3 26.3 38.3 6.0%
Stratis STRAT $1.97 0.000268 0.2 99,002,340 2 42 6 127.2% 98.1% 40 28.8 28.8 (3.9) 29.1%
NEO NEO $24.20 0.003287 2.4 100,000,000 3 46 25 124.9% 97.3% 39 22.9 36.1 (11.8) 27.6%
EOS EOS $6.48 0.000880 6.5 1,006,245,120 4 44 (4) 117.8% 100.0% 45 6.6 28.3 (8.2) 17.8%
IOTA MIOTA $0.70 0.000096 2.0 2,779,530,283 5 46 (1) 117.3% 93.6% 41 (2.1) 30.2 (22.8) 23.7%
Bytom BTM $0.22 0.000030 0.3 1,407,000,000 6 46 (3) 116.3% 87.9% 39 14.1 10.6 (20.2) 28.4%
NEM XEM $0.12 0.000017 1.1 8,999,999,999 7 46 4 113.7% 90.5% 39 15.3 17.8 (17.1) 23.2%
Waves WAVES $2.30 0.000312 0.2 100,000,000 8 49 (9) 106.1% 101.7% 40 10.6 (2.1) 23.0 4.4%
Ethereum Classic ETC $13.98 0.001899 1.5 104,321,722 9 53 (21) 106.8% 94.7% 44 8.2 11.4 (21.0) 12.2%
Lisk LSK $4.61 0.000626 0.6 125,051,056 10 46 29 103.7% 104.6% 40 (0.6) (8.5) 16.7 (0.9% )
Stellar XLM $0.23 0.000031 24.1 104,264,152,998 11 44 14 104.0% 93.3% 47 4.7 6.2 (5.3) 10.6%
Cardano ADA $0.11 0.000014 3.3 31,112,483,745 12 44 8 105.8% 83.9% 43 4.7 11.6 (20.1) 21.9%
Source: Fundstrat, Bloomberg, Onchainfx.com

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Figure: Comparative Quantitative Score for tokens in OW-rated Privacy and Exchange Sectors
Per Fundstrat
Technical Metrics
Market Composite 90D Relative Relative

Price Cap Current Technical Win 90D Price to Price to Weekly 5D 10D 30D 21 vs 50
Name Symbol (USD) Price (BTC) ($B) Coin Supply Score Ratio UV - DV 21 DMA 50 DMA RSI Return Return Return DMA
Privacy Index Constituents
Monero XMR $137.95 0.018739 2.3 16,380,861 1 46 5 133.1% 121.2% 47 34.2 49.1 17.6 11.9%
Dash DASH $216.56 0.029417 1.8 8,303,904 2 38 48 127.0% 109.7% 41 18.1 49.5 4.6 17.3%
Zcash ZEC $156.45 0.021252 0.7 4,732,969 3 40 12 107.6% 91.3% 41 3.1 12.4 (13.7) 16.3%
Bitcoin Private BTCP $4.21 0.000572 0.1 20,524,490 4 36 47 101.0% 79.6% 29 (5.0) (0.2) (16.3) 21.4%
Exchange Index Constituents

QASH QASH $0.24 0.000033 0.2 1,000,000,000 1 42 40 118.6% 111.9% 43 9.9 3.8 20.3 6.7%
AirSwap AST $0.10 0.000014 0.1 500,000,000 2 46 28 110.1% 93.1% 41 3.6 13.3 (7.5) 17.0%
Binance Coin BNB $11.36 0.001543 2.2 192,443,301 3 47 (6) 108.3% 95.8% 48 5.6 12.0 (16.6) 12.4%
0x ZRX $0.80 0.000109 0.8 1,000,000,000 4 44 38 106.0% 87.4% 46 5.4 11.3 (16.8) 18.6%
Bancor BNT $1.70 0.000231 0.1 77,625,092 5 40 (21) 103.4% 90.0% 37 2.4 4.9 (16.3) 13.4%
Kyber Network KNC $0.52 0.000071 0.1 215,625,349 6 41 10 103.1% 79.4% 37 (3.0) 2.5 (24.6) 23.7%

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Figure: Coinshares Shares outstanding and 5D change (histogram)

Past 6M
Coinshares S/O ETN
Combined EUR + SEK products
Big money
Shares flat Jan-May ‘18
buying BTC
One proxy for Big 5D change BTC turning up…

money is the S/O
of Coinshares
Coinshares S/O ETN
ETF S/O… both Combined EUR + SEK products
for BTC and Eth.
Since the start of

June, big money
has been buying
BTC
5D change

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Figure: CME/CBOE Futures: Aggregate Long and Short Interest

Past 6M. Open interest is measured in Bitcoin. Each CME contract represents 5 BTC.
Aggregate open interest
Net Shorts
contracting…
Each contract = 5 Bitcoin
While futures
positioning has
been net short
CBOE+CME
since since Bitcoin Futures Shorts
inception, that
CBOE+CME
figure is Bitcoin Futures longs
contracting…

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Figure: The Bitcoin Misery Index (historical range is 0 to 100). 100=happy. 0=miserable.
Past 12M. The formula = (z-score of win-ratio + z-score of upside/downside volatility)*7 + 50 (intercept)
Index = 100
“happy”
Bitcoin 90
Misery Sell
Signal
80
Index @ 38 >67
70
60
#REF!
The bitcoin misery 50
index, which
measures the 40
38
expected sentiment
of a holder of bitcoin 30
<27
(50=Neutral) has
Buy 20
recently increased to
Signal
38, still validating the
10
18
buy signal from April 4/12/18
Index =
12, 2018
“Misery” 0
Apr May Jun Jul '17 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul '18 Aug Sep
'17 '17 '17 '17 '17 '17 '17 '17 '18 '18 '18 '18 '18 '18 '18 '18

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Figure: The BMI (historical range is 0 to 100). 100=happy. 0=miserable.

For Top 12 Tokens
Buy Sell Buy Sell

<33 Ethereum 67< <33 Qtum 67<
25 42
Ethereum 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100
lowest… EOS XRP
…NEO highest 0 10 20 30
33
40 50 60 70 80 90 100 0 10 20 30 40
45
50 60 70 80 90 100
Litecoin Cardano
We calculated the
BMI for the top 12 37 47
0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100
most liquid tokens
(based on daily Bitcoin Stellar
trading volume) 38 47
0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100
and ranked their
Bitcoin Cash Ethereum Classic
BMIs.
41 49
0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100
TRON NEO
42 64
0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100
Source: Fundstrat, Bloomberg. NEO = strongest

+1 212 293 7131 +1 212 293 7135 +1 212 293 7132 +1 212 293 7134 +1 212 293 7144 +1 212 293 7130
Figure: Crypto Performance Quilt

Past 8 weeks
7/10 7/17 7/24 7/31 8/7 8/14 8/21 8/28
7/17 7/24 7/31 8/7 8/14 8/21 8/28 9/4
FSTOKPVT 18.4%
Privacy sector FSTOKEQW 18.4%
FSTOK40 18.3%
FSTOK40 14.0%
FSTOKEQW 13.4% FSTOKPVT 22.0%
leads… FSTOKDEX 17.4% FSTOK250 11.2% FSTOK40 18.1%
FSTOKPLT 17.1% FSTOKPVT 7.5% FSTOKDEX 17.4%
FSTOKCTB 16.6% FSTOK300 6.3% FSTOKEQW 16.2%
FSTOK300 16.6% FSTOKAGG 6.3% FSTOK250 12.6% FSTOKPVT 17.0%
FSTOKAGG 16.6% FSTOKSTB 0.0% FSTOK10 5.3% FSTOK300 9.7% FSTOKEQW 5.2%
FSTOK10 16.4% FSTOKDEX 4.8% FSTOKDEX -9.1% FSTOKDEX 5.3% FSTOKAGG 9.7% FSTOKCTB 4.6%
FSTOK250 16.3% FSTOKSTB 0.3% FSTOK10 -13.0% FSTOKSTB -0.2% FSTOKCTB 4.8% FSTOKPLT 9.6% FSTOK40 3.8%
Crypto markets Bitcoin 15.7% Bitcoin 15.1% Bitcoin -7.6% Bitcoin -13.2% Bitcoin -8.2% Bitcoin 4.7% Bitcoin 9.4% Bitcoin 3.7%
reversed in the FSTOKSTB 0.0% FSTOKCTB 13.0% FSTOKCTB -8.1% FSTOKPLT -13.4% FSTOKCTB -10.1% FSTOKPLT 3.4% FSTOKCTB 9.2% FSTOK250 3.5%
past few week, FSTOK10 6.2% FSTOK10 -8.4% FSTOKCTB -13.4% FSTOK10 -15.9% FSTOKSTB 0.2% FSTOK10 8.7% FSTOK300 2.6%
FSTOK300 4.7% FSTOK300 -8.7% FSTOKPVT -13.4% FSTOK300 -17.3% FSTOKSTB -0.1% FSTOKAGG 2.6%
and leading is
FSTOKAGG 4.6% FSTOKAGG -8.7% FSTOK300 -13.6% FSTOKAGG -17.3% FSTOK10 2.4%
privacy tokens FSTOKPVT 1.1% FSTOK40 -8.9% FSTOKAGG -13.6% FSTOKPVT -24.5% FSTOKSTB 0.0%
+17%) FSTOKSTB -0.3% FSTOKPLT -9.7% FSTOKEQW -16.6% FSTOK40 -25.1% FSTOKDEX -1.4%
FSTOK40 -2.1% FSTOKEQW -11.4% FSTOK250 -16.9% FSTOKPLT -26.4% FSTOKPLT -3.0%
FSTOKPLT -3.3% FSTOK250 -12.4% FSTOK40 -17.6% FSTOKDEX -27.7%
FSTOKEQW -4.1% FSTOKPVT -14.8% FSTOKEQW -28.3%
FSTOK250 -6.5% FSTOK250 -29.1%
FSTOKDEX -10.7%

+1 212 293 7131 +1 212 293 7135 +1 212 293 7132 +1 212 293 7134 +1 212 293 7144 +1 212 293 7130
Figure: Alt-coin Cycle Index—% alt-coins up >200% past 90D

Past 12M
Apr '17 Jul '17 Oct '17 Jan '18 Apr '18 Jul '18 Oct '18
90%
6/16/2017
80.6% 1/13/2018
80% 77.7%
Then
Still 70%
super-
purgatory… cycle
60%
50%
Our preferred alt- 40%
coin measure is %
coins up 200% in 30%
90D…
20%
Purgatory
This measure is still until mid-Aug
10%
pinned at ~0% and 4/6/2018
to mid-Sep
9/21/2017 0.0%
we see not rising 6.5%
11/12/2017 Current
0% 5.4%
until August… 0.4%

+1 212 293 7131 +1 212 293 7135 +1 212 293 7132 +1 212 293 7134 +1 212 293 7144 +1 212 293 7130
Figure: Sector Price Ratio to BTC

Past 6M
Commodities vs BTC
Past 7D
+0.9% (rel)
Privacy
rebound Platforms vs BTC
Past 7D
-6.5% (rel)
Platforms and
Exchanges trailed Privacy vs BTC
Bitcoin by 6.5% and
5.0%, respectively… Past 7D
+12.8% (rel)
Exchanges vs BTC
Past 7D
-5.0% (rel)

+1 212 293 7131 +1 212 293 7135 +1 212 293 7132 +1 212 293 7134 +1 212 293 7144 +1 212 293 7130
Figure: Sector Pairs Price Ratio

Past 6M
Platforms vs Commodities
Still stick
with
Commodities Platforms vs Exchanges
We continue to favor
Commodities, generally,
as we see this as the
least likely to face
regulatory risks.
Privacy vs Commodities
And also, commodity

tokens like BTC, ZEC,
LTC, BCH are thus
easier to implement to
payment systems, etc.

+1 212 293 7131 +1 212 293 7135 +1 212 293 7132 +1 212 293 7134 +1 212 293 7144 +1 212 293 7130

Past 6M
Commodities vs BTC
Monero
leading… Advance/Decline line
In the past weeks, Daily RSI
Monero has
dominated within
Best Worst
Commodities… Rank 1 2 3 4 5
Past 1 week…
Token Monero Bitcoin Cash Litecoin Bitcoin Zcash
7D chg 28% 11% 7% 4% 1%
% weight 2% 7% 3% 88% 1%
Past 2 weeks…
Token Monero Litecoin Bitcoin Cash Zcash Bitcoin
14D chg 45% 20% 16% 15% 13%
% weight 2% 3% 7% 1% 88%

+1 212 293 7131 +1 212 293 7135 +1 212 293 7132 +1 212 293 7134 +1 212 293 7144 +1 212 293 7130

Past 6M
Platforms vs BTC
Ethereum
continued to
underperform the Advance/Decline line
sector
Stratis and NEO are Daily RSI
the top 2 within

Platform sector. Best Worst
Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Past 1 week…
Ethereum
Token Stratis NEO EOS VeChain NEM Bytom Classic Waves Qtum Cardano Stellar Ethereum IOTA Lisk
7D chg 16% 14% 10% 8% 8% 6% 5% 1% 0% (0%) (1%) (4%) (9%) (12%)
% weight 0% 3% 9% 2% 1% 0% 2% 0% 1% 4% 33% 40% 3% 1%
Past 2 weeks…
Ethereum
Token Stratis NEO IOTA EOS Bytom VeChain NEM Lisk Qtum Cardano Classic Stellar Waves Ethereum
14D chg 37% 36% 35% 32% 31% 27% 21% 12% 12% 11% 10% 8% 7% 1%
% weight 0% 3% 3% 9% 0% 2% 1% 1% 1% 4% 2% 33% 0% 40%

+1 212 293 7131 +1 212 293 7135 +1 212 293 7132 +1 212 293 7134 +1 212 293 7144 +1 212 293 7130

Past 6M
Privacy vs BTC
Privacy sector
rally…
Advance/Decline line
Privacy coins
rebound after Daily RSI
continuous selloff
since May. Dash Best Worst
Rank 1 2 3 4
and Monero up 53% Past 1 week…
and 45% in past 2 Token Monero Dash Zcash Bitcoin Private
7D chg 28% 11% 1% (5%)
weeks, respectively. % weight 46% 37% 15% 2%
Past 2 weeks…
Token Dash Monero Bitcoin Private Zcash
14D chg 53% 45% 15% 15%
% weight 37% 46% 2% 15%

+1 212 293 7131 +1 212 293 7135 +1 212 293 7132 +1 212 293 7134 +1 212 293 7144 +1 212 293 7130

Past 6M
Exchanges vs BTC
Exchange
underperformed
Advance/Decline line
QASH is the only

coin up within Daily RSI
Exchanges
Best Worst
Rank 1 2 3 4 5 6
Past 1 week…
Token QASH Binance Coin 0x Bancor Kyber Network AirSwap
7D chg 5% (1%) (1%) (2%) (9%) (11%)
% weight 7% 62% 23% 4% 3% 1%
Past 2 weeks…
Token QASH AirSwap Binance Coin 0x Bancor Kyber Network
14D chg 37% 22% 17% 13% 6% 5%
% weight 7% 1% 62% 23% 4% 3%

+1 212 293 7131 +1 212 293 7135 +1 212 293 7132 +1 212 293 7134 +1 212 293 7144 +1 212 293 7130
Our forecasts for the crypto indices are shown below.

• In general, we see 2018 being a strong year, but we see the larger and more established blockchains growing
in dominance in 2018—hence, better upside for ETH and BTC over the FS CryptoFX indices.
• But the story, in our view, will be the need to be tactically rotating in 2018.
Figure: 2018 Forecast

Fundstrat indices. 100=inception date for the indices 10/1/17 Market cap Current
Description ($ billions) Value YE 2018
FS CryptoFX 10 Largest 10 tokens $186.3 B $138 $525
FS CryptoFX 40 Mid-cap 40 tokens 21.4 119 625
FS CryptoFX 250 Small-cap 250 tokens 6.8 84 600
FS CryptoFX Agg Aggregate Index 218.7 132 500

Ticker
Market cap Current
(coinmarketca Rating YE 2018
($ billions) Value
p.com)
Bitcoin BTC OW $119.9 B $6,953 $25,000
Ethereum ETH OW 25.0 245 1,900
Ethereum Classic ETC OW 1.3 12 60
Neo NEO OW 1.3 21 225
Bitcoin Inv. Trust GBTC OW 1.8 9 30

+1 212 293 7131 +1 212 293 7135 +1 212 293 7132 +1 212 293 7134 +1 212 293 7144 +1 212 293 7130
Figure: Comparative Quantitative Score for tokens in OW-rated Platforms and Commodity Sectors
Per Fundstrat Technical Metrics
Composite 90D Relative Relative

Price Market Current Technical Win 90D Price to Price to Weekly 5D 10D 30D 21 vs 50
Name Symbol (USD) Price (BTC) Cap ($B) Coin Supply Score Ratio UV - DV 21 DMA 50 DMA RSI Return Return Return DMA
Siacoin SC $0.01 0.000001 0.3 36,675,973,094 1 47 14 125.7% 98.9% 42 26.9 37.7 (5.0) 26.8%
Bytecoin BCN $0.00 0.000000 0.5 184,043,640,558 2 42 27 130.2% 109.0% 44 25.5 45.8 8.2 21.2%
Dogecoin DOGE $0.01 0.000001 0.6 116,016,773,297 3 42 111 167.4% 170.9% 60 64.3 122.3 85.7 (3.5% )
Verge XVG $0.02 0.000002 0.3 15,172,086,051 4 46 29 124.5% 101.2% 41 27.8 31.1 (4.4) 23.3%
NEO NEO $24.20 0.003287 2.4 100,000,000 5 46 25 124.9% 97.3% 39 22.9 36.1 (11.8) 27.6%
Monero XMR $137.95 0.018739 2.3 16,380,861 6 46 5 133.1% 121.2% 47 34.2 49.1 17.6 11.9%
ICON ICX $0.95 0.000130 0.8 800,460,000 7 44 33 123.7% 99.3% 43 10.2 26.3 3.1 24.4%
aelf ELF $0.48 0.000065 0.1 280,000,000 8 48 13 119.8% 94.3% 44 20.4 21.7 (12.0) 25.6%
Dash DASH $216.56 0.029417 1.8 8,303,904 9 38 48 127.0% 109.7% 41 18.1 49.5 4.6 17.3%
MCO MCO $5.10 0.000693 0.2 31,587,682 10 48 28 111.9% 87.7% 50 15.9 16.2 (21.5) 24.2%
Nano NANO $3.03 0.000412 0.4 133,248,289 11 47 54 125.1% 143.9% 45 (1.9) 6.7 89.4 (18.8% )
EOS EOS $6.48 0.000880 6.5 1,006,245,120 12 44 (4) 117.8% 100.0% 45 6.6 28.3 (8.2) 17.8%
OmiseGO OMG $4.81 0.000653 0.7 140,245,398 13 41 10 117.7% 93.0% 38 14.0 24.9 (12.1) 24.7%
Mithril MITH $0.37 0.000050 0.4 1,000,000,000 14 47 12 111.2% 74.6% 49 16.6 16.6 (26.3) 36.6%
CyberMiles CMT $0.11 0.000015 0.1 1,000,000,000 15 41 37 113.8% 96.1% 44 9.2 3.3 (3.9) 17.7%

+1 212 293 7131 +1 212 293 7135 +1 212 293 7132 +1 212 293 7134 +1 212 293 7144 +1 212 293 7130
Thomas J. Lee, CFA

Co-Founder, Head of Research Sam Doctor
In research: 25 years Head of Data Science Research
Prior to founding Fundstrat, Mr. Lee was at J.P. In research: 18 years
Morgan from 1999 to 2014 and served as Chief
Equity Strategist from 2007 to 2014. He was top- Head of Data Science Research. Former US Small and
ranked by Institutional Investor every year since Mid Cap Technology Analyst and India Small / Mid Cap
1998. Previously served as Managing Director at Strategist at J.P. Morgan Chase.
Salomon Smith Barney. Mr. Lee graduated from the
undergraduate program at the Wharton School,
University of Pennsylvania.
Rob Sluymer, CFA L. Thomas Block

Head of Technical Analysis Strategy Washington and Policy Strategist
In research: 26 years Head of JPM policy: 21 years
Head of Technical Research with over 26 years Tom had a 21-year career at J.P. Morgan, serving as
experience writing technical research at RBC Capital Global Head of Government Relations. Prior to joining
Markets JP Morgan Chase in 1987, he previously worked in
Washington and held several positions with members of
the House and Senate, serving as Legislative Assistant
and Chief of Staff in the House, and Legislative Staff
Director in the Senate
Ken Xuan Alex Kern

Quantitative Analyst Research Analyst
In research: 4 years In research: 3 years
Data scientist with expertise in applied mathematics and Previously conducted blockchain technology research
statistical analysis. Ken was an operations strategy with Digital Currency Group. Prior to that, Alex was a
consultant at West Monroe Partners. Ken received a Fintech and Payments Equity Research Associate with
B.S. degree in Management, Economics from Purdue Cowen & Co. Alex received his B.A. in History from the
University in 2013 and an M.S. degree in Operations University of Pennsylvania in 2014.
Research from Columbia University in 2017.

+1 212 293 7131 +1 212 293 7135 +1 212 293 7132 +1 212 293 7134 +1 212 293 7144 +1 212 293 7130
This research is for the clients of Fundstrat Global Advisors only. For important disclosures and rating histories regarding sectors or companies that are the subject of this report, please contact your sales
representative or Fundstrat Global Advisors at 150 East 52nd Street, New York, NY, 10022 USA.
Analyst Certification (Reg AC)
Thomas J. Lee, the research analyst denoted by an “AC” on the cover of this report, hereby certifies that all of the views expressed in this report accurately reflect his personal views, which have not been
influenced by considerations of the firm’s business or client relationships.
Neither I, nor a member of my household is an officer, director, or advisory board member of the issuer(s) or has another significant affiliation with the issuer(s) that is/are the subject of this research
report. There is a possibility that we will from time to time have long or short positions in, and buy or sell, the securities or derivatives, if any, referred to in this research
Conflicts of Interest
This research contains the views, opinions and recommendations of Fundstrat. As of the time of writing and publication of this presentation, Fundstrat does not know of, or have reason to know of any
material conflicts of interest at the time of the publication of this presentation. The Company has no contractual relationship, nor have we received any compensation from any of the companies listed in
this research report.
Analyst Industry/Sector Views
Positive (+): The analyst expects the performance of his industry/sector coverage universe over the next 6-18 months to be attractive vs. the relevant broad market benchmark, being the S&P 500 for
North America.
Neutral (N): The analyst expects the performance of his or her industry/sector coverage universe over the next 6-18 months to be in line with the relevant broad market benchmark, being the S&P 500 for
North America.
Negative (-): The analyst expects his or her industry coverage universe over the next 6-18 months to underperform vs. the relevant broad market benchmark, being the S&P 500 for North America.
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Thomas J. Lee, CFA Robert Sluymer, CFA Sam Doctor Ken Xuan Alex Kern L.

Sep 6th 2018

down >70% in past 9M, a level Washington Policy Strategy

● Then, Alts rallied ~3X within 7

weeks. We think a similar mini- Alts GBTC

FS Crypto 10 (58%) (3%) (16%) (16%) (66%)

FS Commodity (54%) (8%) 1% 1% (57%)

Click here for research library.

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 2

Figure: Alt-coin calls since start of 2018

Source: Fundstrat, Bloomberg

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 3

+35 -48 +58 -51 +90 -97 +62 -64

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 4

60% Our March 2018 forecast:

August 2015: 110 days

Sept 2017: 69 days 9/4/2018

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 5

Percent of tokens down 70% from last 240 day high

60% Alt-correction index

Source: Fundstrat, Bloomberg

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 6

Figure: % of Alt-tokens down 70% from 9-month highs, rolling

Source: Fundstrat, Bloomberg

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 7

Platform and Core ERC-20

Price % chg YTD

Source: Coinmetrics.io, Fundstrat, Bloomberg

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 8

Figure: Bitcoin Price

All days 1,948 2% 12% 45% 56% 57% 61%

Bitcoin sees average gains of

12% decline within 1-day

Source: Fundstrat, Bloomberg

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 9

$13,000 Bear market re-trace to price 1 month prior to top…

Source: Fundstrat, Bloomberg

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 10

Figure: BTC 2013-2015

It took a 405 day bear market to

Source: Fundstrat, Bloomberg

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 11

Figure: BTC 2017-now

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 12

Figure: Comparative Factors supporting BTC dominance (vs Alts)

Regulatory uncertainty about which crypto-assets will be securities is

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 13

Figure: The Fundstrat Crypto-currency Indices

Market Value % Return

Index $ % share Week Week Week Past

Mid cap and

small cap FS Crypto Commodity FSTOKCTB Likely to be classified as commodities

lead… FS Crypto Privacy

Source: Fundstrat, Bloomberg.

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 14

Market Composite 90D Relative Relative

Platform Index Constituents

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 15

Market Composite 90D Relative Relative

Exchange Index Constituents

Source: Fundstrat, Bloomberg, Onchainfx.com

For exclusive use of Fundstrat clients only. September 6, 2018 Slide 16

Figure: Coinshares Shares outstanding and 5D change (histogram)