Why you should buy Sift now!

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Sift is still very cheap, it even gets dumped below NAV sometimes. These are mostly from impatient investors, and I can’t blame them because Sift is still not producing the minimal 4% profit per month which they saw as a minimum mentioned in the whitepaper.

A number of reasons that contributed to the “false start”: In the early days just after the ICO there were liquidity issues. As Sift is not using Tether/USD(T), they saw problems exiting trades. Targets were reached but lack of volume prevented exits with a good margin. This problem is solved however with more OTC partners and once Sift has moved to Luxembourg this will become even easier.

The move to Luxembourg is the second big hurdle as the process is taking more than 8 months now (never do business with Coficom to let them take care of setting up a Luxembourg fund). All the paperwork was signed a long time ago but this company fails to deliver. As a result, this delays setting up more bank accounts, trading accounts, and OTC partners. When Sift is located in Luxembourg, we expect to see an immediate rise in profit of19%, corresponding to the amount of tax Sift is paying now over each winning trade.

The biggest problem Sift is facing, is the shift in trading times. James, the trader of Sift, lives on the US west coast and is awake during start of the Asian stock market, but is asleep when the London and New York stock markets open. That was no problem during 2017, however currently good trading signals occur more during the opening times of the London and New York stock markets, resulting in missing a lot of trades. To tackle this problem, Sift started trading with bots. In April and May of 2018 fine-tuning and bug fixing of these bots was the main priority of Sift. This has costed a lot of resources and as a result, James was more working in fine-tuning than manual trading. This lead to disappointing results in April and even a small loss in May.

Lastly a short term problem which Sift faced was position building. This direction was voted for under pressure of the community which wanted to see more profits in a bull market. Sift complied and started building positions and shortly after that, the marked collapsed. Around $500K of the fund (with around $200K losses) was used for this. I’m not sure but I think it also affects the current allocations for manual forex trading

So, why should I buy Sift after this disappointing introduction? Because it can only go better from this moment on. For the “promised” 4% ROI, Sift needs a monthly profit of round $60,000. Let’s break it down in 3 major components now exist: bot trading, manual trading and forex trading.

It is a bit early to estimate what to expect from the bot based on current trading figures. Due to some bugs and fine-tuning the bot made a loss in April and May. However as far as I am concerned this is learning money as the signals were good, but one of the bugs forced the bot in a wrong direction. The trade signal was good for buy, however the bot started the trade with a sell. Those kind of bugs you only find when entering a trade in real life, not if you test it to validated signals. At the moment, most of the fine-tuning and bug-fixing is done and the results generated by the bot so far in June, after 6 days of trading, are an $800 profit. If we continue this trend then we would see a $4000 profit at the end of the month. The bot has achieved this profit with fund allocation of only $10K per trade. If the bot continues to perform and the team is comfortable with its results, this will be expanded to $20K,or higher and will be ramped up a higher amount. This amount will be decided later, but $100K is mentioned. So if the performance is the same, the $4K profit has now turned into a $40K profit. As a side note, the bot has not run the entire 6 days of June now. Last month the bot closed on average two trades per day, so in time we can expect double the amount of profit, resulting in a profit of $80K. This is a dividend of $0.04703051 per Sift-token which is more than the promised 4% per month on bot- trading alone.

I know that the calculations leave a lot of room to differentiate because of the small sample the bot took in June, but I would say that a $60K profit is achievable with ease if the trading sizes are ramped up and the bot is running fine. I forgot to mention that the bot will also takes Forex trades very soon (this month) and I would not be surprised to see results close to $100K in the last quarter this year in both Forex and Crypto bot trading.
James in Sift chat: “in testing with actual exchange data (4 exchange feeds and one combined feed) on 8 coins it did just about 30% (28.9) on average per month without a single coin having a loss in any month.” With 8 coins at 10K/per coin 80K is exposed at 30% that’s 24K profit. Ramp it up to 30K/coin trades and this figure would yield 72K profit, well above the 4% mark. With 100K trades a coin dividend is already 14 cents. But at the moment we are still of that 30% ROI with the bot.

Forex trading
Forex trading is traditionally not much alive in December and January. So we take out benchmark from February http://www.thelazycryptoinvestor.com/dividend-payouts/sift/2018-03-05/
At that moment in time, $100K was allocated for forex trading and most trades took place in 1 lot sizes. This generated an $11K profit. When Luxembourg finally happens, this will be scaled up to a $700K allocation and lot sizes will expand from 1 lot up to 5. Let’s do some simple math, if $100K allocation generates an $11K profit, then a $700K allocation will generate a $77K profit? Again we could see a profit larger than $60K which corresponds to the promised 4% monthly. If we combine these profits with the expectations from the bot trading, we are now already at $0.09229737 dividend per Sift-token.

Manual trading has hardly occurred in the last three months, as most of the time went into getting the bot work done. Now the bot is running we should see more manual trades. Again we could take a look at February, trades where all in a very low exposure but still $17K profit was made. I don’t expect the number of trades to rise dramatically in time, but I do expect exposure to rise. In December $82K profit was made and in January $40K, both months with a slightly larger exposure. But this shows that those figures are doable. But to make a conservative estimation, a $50K profit per month should be achievable. Furthermore, although we have not seen many manual shorts, this is something Sift is capable off for sure as, the bot has proven since it trades with the same signals. The only thing I’m not sure about is how much the position building affects exposure at this time. But on the long term those positions should return a profit as well.

So in total we have $80K for bot trading, $77K for forex trading and $50K for manual crypto trading making a total of $207K profit per month, or $0.12169144 dividend per Sift-token.

To finish it off, when the migration to Luxembourg is finished, next in the pipeline are market making (taking (automated) advantage of the difference between buy and sell price by placing orders at both sides) and arbitrage (taking advantage in price differences between exchanges).

The next statement is personal speculation, but based on all of the above I would be surprised NOT seeing a dividend of 20 cents per Sift-token (and 20 cent token appreciation) in the last quarter this year, and talking a bit longer term maybe even 50 cents per Sift-token or is this my biased feeling for Sift. But if you take my biased feeling into account for half of it how could it not get lower than 10 cents.

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