Weekly newsletter - Enigma Securities.

1. www.enigma-securities.io info@enigma-securities.io
DISCLAMER: The information contained in this note issued by Enigma Securities Limited is not intended to be advice nor a recommendation concerning cryptocurrency
investment nor an offer or solicitation to buy or sell any cryptocurrency or related financial instrument. While we provide this information in good faith it is not intended to
be relied upon by you and we accept no liability nor assume any responsibility for the consequences of any reliance that may be placed upon this note. Enigma Securities
Limited is an Appointed Representative of Makor Securities London Ltd which is authorized and regulated by the Financial Conduct Authority (625054).
7/8 Savile Row
London, W1S 3PE
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Tel: +44 207 290 5777
336 Rue Saint-Honoré
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Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
07 November 2018
The Enigma Weekly
De-Coding Crypto
Our Market View
Aaaaand, Action!
After a quiet couple of weeks we are finally seeing some green on our screens. Led largely by Bitcoin Cash, and Ripple, the crypto
market cap has reached a new monthly high. Bitcoin Cash’s run is largely company-specific, the result of an impending fork. Yet,
its momentum has carried over to the broader market. Overnight, Ripple briefly “flippened” Ethereum to become the second
largest cryptocurrency. The reason for XRP’s outperformance is still unclear. Sentiment has been buoyed by last month’s xRapid
development, expected to boost adoption, as well as recent bullish statements by the founders.
In a landmark new report, “Bitcoin Decrypted,” Morgan Stanley has declared cryptocurrency an institutional asset class. The
report echoes many of our recent observations here at Enigma. The analysts fittingly characterize the market as "rapidly
morphing .” In the past few months we have seen major shifts in investment standards and preferences among our clients. For
example, as the ICO market has waned, Stable Coins are all the rage. Morgan Stanley calls Stable Coins, “the next wave of
development." We are encouraged to see a major bank acknowledging that, despite certain hurdles, innovation in the crypto
world is alive and well. Crypto is far from dead. We, at Enigma, have always believed this is the case.
Performance Snapshot as of 9am GMT 07/11
Name Ticker Wk Close Wk Change YTD Change Record High Mkt Cap
Bitcoin BTC $6,288.230 -4.0% -55.4% $20,089.00 $109,973,238,940
Ethereum ETH $195.450 -6.3% -73.9% $1,432.88 $20,312,003,661
Ripple XRP $0.443 -5.7% -80.3% $3.84 $17,738,391,263
Bitcoin Cash BCH $417.120 -7.8% -83.5% $4,355.62 $7,266,040,723
EOS EOS $5.140 -4.8% -41.4% $22.89 $4,640,049,897
Stellar XLM $0.223 -2.9% -38.1% $0.93 $4,215,122,270
Litecoin LTC $48.870 -8.5% -78.8% $375.29 $2,886,032,141
Tether USDT $0.991 2.2% -1.9% $1.22 $1,821,168,752
Cardano ADA $0.069 -7.4% -90.1% $1.32 $1,781,634,538
Monero XMR $103.700 -2.4% -70.2% $495.84 $1,706,656,991
TRON TRX $0.022 -7.5% -53.1% $0.30 $1,443,950,131
DASH DASH $156.050 -5.5% -85.2% $1,642.22 $1,301,544,917
IOTA MIOTA $0.455 -8.5% -87.1% $5.96 $1,256,376,074
Enigma Research
Lead Analyst: Aliya Itzkowitz
aitzkowitz@enigma-securities.io

2. www.enigma-securities.io info@enigma-securities.io
DISCLAMER: The information contained in this note issued by Enigma Securities Limited is not intended to be advice nor a recommendation concerning cryptocurrency
investment nor an offer or solicitation to buy or sell any cryptocurrency or related financial instrument. While we provide this information in good faith it is not intended to
be relied upon by you and we accept no liability nor assume any responsibility for the consequences of any reliance that may be placed upon this note. Enigma Securities
Limited is an Appointed Representative of Makor Securities London Ltd which is authorized and regulated by the Financial Conduct Authority (625054).
7/8 Savile Row
London, W1S 3PE
U.K.
Tel: +44 207 290 5777
336 Rue Saint-Honoré
Paris, 75001
FRANCE
Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
Chart of the Week
Crypto AUM
The decline in the crypto market has not hindered new money from pouring into the space. In fact, though the crypto market has
declined 75 percent in market value, crypto AUM is booming – reaching record highs. According to CryptoFundResearch, there
are now over 7 billion dollars of crypto assets under management. A recent Morgan Stanley report breaks these holdings into
three categories: 48% hedge fund, 48% venture capital and 3% private equity. Of these funds, half are in the United States, with
9 percent in China and Hong Kong, and the remaining 6 percent in the UK. By year-end, it is expected that 220 cryptocurrency
funds will have been created in 2018. That compares with 198 last year, and only 45 in 2015.
In July 2016, the crypto fund AUM was $380 million. Two years later, the AUM was over $6 billion
This year, impressive fund-raising included a $330 million raise by Grayscale Investments. This followed a 1,200 percent increase
in the amount the firm raised over the course of 2017. The surge in AUM is also the result of several high profile investments
from Institutional players. For example, recently, Goldman Sachs & Galaxy Digital’s contribution to a $58.5 million dollar round
in BitGo. BitGo addresses one of the key sticking points many institutions have had with crypto: lack of a custody solution. The
Morgan Stanley report cites three major obstacles to large-scale, institutional investment in crypto. These issues, gleaned from
client conversations include: underdeveloped regulation, lack of a custodian solution and lack of large financial institutions
currently invested.
We, at Enigma, feel that the last of these concerns is fast diminishing. With the arrival of major players like Fidelity on the scene,
asset managers will no longer feel they run the risk of being the first big player to enter the market. Likewise, the issue of
custody is diminishing. This year we have seen several solutions come into place – including new efforts by Coinbase and
Gemini, the Winklevoss brothers’ firm.
Regulation remains a key issue which we are tracking closely. We continue to view any regulatory development, regardless of
how “crypto-friendly” as a net positive. The market is currently lacking clarity and any certainty could serve as a catalyst for new
money, currently on the side-lines, to enter the crypto space. The current ambiguity regarding how governing bodies treat
crypto is unsustainable.

3. www.enigma-securities.io info@enigma-securities.io
DISCLAMER: The information contained in this note issued by Enigma Securities Limited is not intended to be advice nor a recommendation concerning cryptocurrency
investment nor an offer or solicitation to buy or sell any cryptocurrency or related financial instrument. While we provide this information in good faith it is not intended to
be relied upon by you and we accept no liability nor assume any responsibility for the consequences of any reliance that may be placed upon this note. Enigma Securities
Limited is an Appointed Representative of Makor Securities London Ltd which is authorized and regulated by the Financial Conduct Authority (625054).
7/8 Savile Row
London, W1S 3PE
U.K.
Tel: +44 207 290 5777
336 Rue Saint-Honoré
Paris, 75001
FRANCE
Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
Currency of the Week
BCH
Bitcoin Cash is up a massive 46 percent in the last week. The catalyst behind this price surge is widely considered to be the
imminent hard fork. Why the fork? BCH tends to have planned protocol upgrades twice per year, however, this fork is different.
Bitcoin ABC, the largest Bitcoin cash client, has proposed a non-scheduled change to bitcoin cash which it claims will make it more
scalable and usable, as well as opening doors for non-cash transactions. ABC is up against nChain which wants to avoid such
transactions and increase block size. The Bitcoin Cash fork is set for 15 November. So far, two major excahnges, Binance and
Coinbase, have announced they will support the possible new BCH token formed post- fork.
Traders typically interpret coin forks in a bullish manner. Trading around a fork is akin to a technical trade in the equity market –
such as buying a stock before the “spin-out” of part of the larger business. The result is a “two for one” deal. Coin holders own
both the original asset, and the new coin formed post-fork. As one analyst writes, a fork signifies “free coins” on top of existing
holdings. Bitcoin cash is itself the product of a fork. Previously, when the Bitcoin blockchain forked to create Bitcoin Cash. BTC
holders receiving an equivalent amount of BCH. Those BCH tokens went on to have a $555 value as soon as crypto exchanges
began to list the new coins.
Bitcoin Cash led the market higher this week with a sudden surge in price
Over the course of this week, Bitcoin Cash trading volume has increased seven times - from less than $200 million to $1.4 billion,
according to CoinMarketCap data. The added volume is further supporting the price. The last time we saw a comparable volume
increase was when Ripple spiked on X-Rapid news in early October. We, at Enigma, view Bitcoin Cash’s run as a largely company-
specific, short-lived, phenomenon. That said, BCH’s momentum has carried over to a few other names, including Ripple, which
was up as much as 15 percent yesterday.

4. www.enigma-securities.io info@enigma-securities.io
DISCLAMER: The information contained in this note issued by Enigma Securities Limited is not intended to be advice nor a recommendation concerning cryptocurrency
investment nor an offer or solicitation to buy or sell any cryptocurrency or related financial instrument. While we provide this information in good faith it is not intended to
be relied upon by you and we accept no liability nor assume any responsibility for the consequences of any reliance that may be placed upon this note. Enigma Securities
Limited is an Appointed Representative of Makor Securities London Ltd which is authorized and regulated by the Financial Conduct Authority (625054).
7/8 Savile Row
London, W1S 3PE
U.K.
Tel: +44 207 290 5777
336 Rue Saint-Honoré
Paris, 75001
FRANCE
Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
ICO of the Week
VERIDIUM
***Enigma Securities is pleased to announce exclusive allocations in several private sales*** If you would like more information
on our ICO allocations please contact our team – info@enigma-securities.io
The Proposal
Veridium will create a trading platform and marketplace where companies can buy and sell various eco-friendly assets. The
first of these tokens will be CARBON. Each token is backed by one carbon credit. The project caters primarily to the private
investor compliance market where institutional investors (such as pension funds) are now requiring companies to purchase carbon
credits in order to offset their carbon liabilities. With increased focus on climate change and ESG (Environmental & Social
Governance) ratings, the investor compliance market is growing more than twice as fast as the government mandated compliance
markets. Large Oil & Gas companies, such as BP and Shell, have also become large purchasers of carbon assets in efforts to hedge
future liabilities. Veridium, with the help of partner IBM, will automate the entire carbon accounting process for these companies
by integrating a proprietary blockchain-based accounting tool – the ‘EcoSmart-Protocol.’
Enigma Rating: BUY
With the recent publication of the U.N. Climate report, and a feeling of mounting urgency around the need to address climate
change, Veridium’s launch is timely. Currently, there is no liquid marketplace where such assets can be traded, so Veridiium is
filling a need. As more companies feel compelled to reduce their carbon footprint, demand for an automated service and a private
sector marketplace for carbon credits will increase. The decision to focus on the private sector market insulates the project from
political risk. For example, the decision of the Trump administration to leave the Paris Accord etc, is not as relevant to demand as
the decisions of large corporations like Microsoft, Shell and BP, which are already large purchasers of this class of carbon credits.
The Team
Todd Lemons, Chairman, and team have 25 years of experience incubating environmentally-oriented projects. Todd has
founded companies all over the world including Envision Corp, Composite Technologies & Infinite- Earth. Under the leadership of
Todd and Jim Procanik, Executive Director, InfiniteEARTH authored the first forest carbon accounting methodology known as
REDD+ which is now recognized in the Paris Accord and has set the criteria by which all projects are measured today. Brian Kelly
of CNBC is on the project’s board of advisors. IBM is the official technology provider of the project. Currently, IBM is working with
a consortium of Fortune 500 companies on the development of a Hyperledger Fabric which will be integrated with Veridium.
Transaction Details
$5 = 1 CARBON tokens are on the Stellar blockchain, Soft-cap: $5 million (already reached), $25 million hard-cap for this first
round. 6-month lockup. There are two tokens: CARBON and VERDE.
*CARBON – commodity-backed, stable token = one metric ton of carbon offsets, max supply: 5 million for this round,
*VERDE –platform utility token - max supply 1 billion units, exclusive, free distribution to first-round participants. Used to pay for
transaction fees on the Veridium trading platform. Users of the Veridium Marketplace trading platform will be charged ~0.2% of
the total transaction value in VERDE. VERDE’s value will be derived from prevailing market supply and demand.
Roadmap
Oct 2018: Private Sale begins
~April 2019: Launch of technology
***Details Subject to Change***

5. www.enigma-securities.io info@enigma-securities.io
DISCLAMER: The information contained in this note issued by Enigma Securities Limited is not intended to be advice nor a recommendation concerning cryptocurrency
investment nor an offer or solicitation to buy or sell any cryptocurrency or related financial instrument. While we provide this information in good faith it is not intended to
be relied upon by you and we accept no liability nor assume any responsibility for the consequences of any reliance that may be placed upon this note. Enigma Securities
Limited is an Appointed Representative of Makor Securities London Ltd which is authorized and regulated by the Financial Conduct Authority (625054).
7/8 Savile Row
London, W1S 3PE
U.K.
Tel: +44 207 290 5777
336 Rue Saint-Honoré
Paris, 75001
FRANCE
Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
Regulation Watch
Hong Kong’s securities regulator has set out new standards forcrypto funds which, it hinted, could soon become formal regulation
for crypto exchanges. Currently, the rules apply to any fund managers investing more than 10 percent of their holdings in
cryptocurrency. Initially, professional traders will able to join a sandbox scheme designed to give regulators a chance to refine
their approach. “The market for virtual assets is still very young and trading rules may not be transparent and fair,” said chief
regulator Ashley Adler. Hong Kong has a significantly different approach from neighbour, mainland China, where cryptocurrency
is illegal. Hong Kong’s decision follows an announcement by Taiwan, last week, that it would begin regulating ICOs next June.
Key Dates
November –
What We’re Reading
Morgan Stanley Report Says Crypto Now An Institutional Asset Class – Institutional investors are increasingly getting involved
in bitcoin and other cryptocurrencies – while the number of retail investors in the space is staying stagnant – according to a new
report by Morgan Stanley. In an update to "Bitcoin Decrypted: A Brief Teach-In and Implications," the global banking giant's
research division delved into the last six months of bitcoin and highlighted certain trends it noticed. The report is dated October
31. Perhaps most notably, the report emphasized its writers' view of the market's "rapidly morphing thesis," which began by
defining bitcoin as "digital cash" and noting that investors had full confidence in it, to a solution for issues in the financial
system, to a new payment system to ultimately a new institutional investment class.
Strong Demand: Crypto Hedge Funds are Still Raising $100 Million+ – Throughout 2018, the cryptocurrency market has lost 75
percent of its valuation. Yet, crypto hedge funds are raising hundreds of millions of dollars from accredited investors and
institutions. Grayscale Investments, a subsidiary company of cryptocurrency venture capital behemoth Digital Currency Group,
raised more than $330 million from both existing and new investors. After recording a 1,200 percent increase in the amount the
firm had raised across three quarters in 2017, Michael Sonnenshein, managing director of Grayscale Investment stated that the
substantial 69 percent drop in the price of Bitcoin had minimal impact on the company’s client base. Over the last several
months, other major cryptocurrency hedge funds such as Pantera Capital and former Point72 portfolio manager Travis Kling-
founded Ikigai Asset Management have raised over $100 million to invest in the asset class.
Is Cryptocurrency Dead for Good? – Since it was created, nearly a decade ago, bitcoin—and the cryptocurrency market it
spawned—have faced a constant stream of doomsayers declaring the coin dead or headed for obsolescence. Even so, ten years
later, a single bitcoin is worth four figures, and it appears to have found some stability in tandem with its growing maturity. The
same can’t be said for the sector which now includes thousands of coins and tokens, each of which exhibits varying degrees of
success. Moreover, for all their promise, cryptocurrencies still can't seem to break into the mainstream. There are still very few
merchants that accept crypto payments, and most financial services continue to be settled in fiat currencies. Critics say crypto
may have been a flash in the pan. For supporters, though, the signs are clear that even with the current culling of the crypto
ranks, the sector will emerge stronger.
Only 1 in 4 Bitcoins Moved Between Addresses in Past Six Months – While volatility is back in global financial markets, only
about one in four Bitcoins that weren’t freshly mined moved between the anonymous online addresses holding them in the last
six months. That’s a huge change from late 2017, when about half of all such Bitcoins were active, according to data compiled
for Bloomberg News by researcher Coin Metrics. Bitcoin hadn’t hit such low levels of activity since 2015, before the massive
influx of investors that flocked to the cryptocurrency during its record price run-up late last year, Coin Metrics said

6. www.enigma-securities.io info@enigma-securities.io
DISCLAMER: The information contained in this note issued by Enigma Securities Limited is not intended to be advice nor a recommendation concerning cryptocurrency
investment nor an offer or solicitation to buy or sell any cryptocurrency or related financial instrument. While we provide this information in good faith it is not intended to
be relied upon by you and we accept no liability nor assume any responsibility for the consequences of any reliance that may be placed upon this note. Enigma Securities
Limited is an Appointed Representative of Makor Securities London Ltd which is authorized and regulated by the Financial Conduct Authority (625054).
7/8 Savile Row
London, W1S 3PE
U.K.
Tel: +44 207 290 5777
336 Rue Saint-Honoré
Paris, 75001
FRANCE
Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
Coinbase Now Worth $8 Billion – With its shiny new $8B valuation, Coinbase is now worth more than all but the top three
cryptocurrencies that trade on the platform. That’s right, the only cryptocurrency assets that are worth more than the platform
that trades them are Bitcoin, Ethereum and Ripple. Coinbase’s Series E is nearly three times as much as its Series D, and the
fresh cash brings the company’s total capital-raised-to-date to over $520M. The bet for investors is, and should be, that if
cryptocurrencies are indeed the next big idea in the ways that humans determine value, then Coinbase should be worth far
more than any of the assets that trade on its exchange. The fact that it’s neither indicates how much farther the company has to
grow, or the limits of the thesis that cryptocurrencies will take over the world.
Microsoft Partnering with Nasdaq to Implement Blockchain Technology – Global software giant Microsoft have announced
they are teaming up with Nasdaq Inc. to offer blockchain software solutions to traders and exchanges. Microsoft intends to
integrate their Azure Blockchain technology with Nasdaq’s Financial Framework (NFF. Microsoft Integrating Blockchain
Technology The plans to integrate their Azure blockchain with Nasdaq aims to create systems that can bridge the gap in differing
technology so Nasdaq’s customers can benefit. They hope to simplify the process of matching together buyers and sellers, while
also managing payments, delivery and the settlement of transactions.
Hong Kong Issues New Rules to Regulate Cryptocurrency Funds and Exchanges – Hong Kong's securities regulator issued a
statement setting out guidelines for funds dealing with cryptocurrency Thursday, Nov. 1, saying it could move to formally
regulate exchanges. In what it called “guidance on regulatory standards,” the autonomous Chinese territory’s Securities and
Futures Commission (SFC) set in motion a series of steps that chief Ashley Alder hinted would culminate in a formal regulatory
environment. Hong Kong differs significantly in its approach to cryptocurrency from mainland China, with cryptoasset exchange
and related activities legal, though formal regulation is pending.
Closing the Cash Gap With Cryptocurrency – In emerging markets, the shallow reach of traditional money systems means
there’s less resistance to new financial technology. Now, Gatina-pesa is going crypto, shifting from multicolored paper notes to a
digital token based on blockchain, the recordkeeping technology that makes Bitcoin possible. The pilot program is funded by
Bancor, a project based in Switzerland that operates a decentralized cryptocurrency trading platform. Bancor raised $153 million
last year selling its own digital token, making it one of the splashiest of 2017’s so-called initial coin offerings, attracting instant
skepticism from the many critics of crypto euphoria.
It's Bitcoin's 10th Birthday. Here's What People Are Saying – Ten years ago, the pseudonymous creator behind bitcoin, Satoshi
Nakamoto, released the currency's whitepaper, Bitcoin: A Peer-to-Peer Electronic Cash System. Back then, those in the know -
initially just Hal Finney, a computer scientist, and Nakamoto, who some believe is the same person - were experiencing a new
form of currency aiming to give people back the power to control their money, following the 2008 global financial crisis.
Until next week - thank you for reading.
Please reach out to info@enigma-securities.io with any questions.