Regrets…

Friday, 3 November 2017
Melbourne, Australia
By Kris Sayce

  • Quick, while there’s time
  • More than cryptos
  • Exponential growth

From Bloomberg:

The eye-popping surge in bitcoin this week is paying dividends for one of the biggest U.S. online cryptocurrency exchanges.

Coinbase Inc. added more than 100,000 users in the last 24 hours in the wake of the CME Group Inc.’s announcement Tuesday that it plans to introduce bitcoin futures by the end of the year. That’s according to data collected by Alistair Milne, a portfolio manager at the Altana Digital Currency Fund. The number of users of the online wallet function offered by Coinbase has more than doubled since the beginning of the year, according to stats on the company’s website.

Humans always have the tendency to think that the thing happening right now is the most important, or the biggest, or the greatest, or the funniest, or the most beautiful, or the most exciting thing ever.

Often, it’s not.

I (Kris) say that as a preface to this: we’re not sure we’ve ever seen anything that simultaneously excites and frightens us at the same time as much as cryptocurrencies.

We are glad and, at the same time, regretful that we have launched two cryptocurrency services.

We’re regretful because based on the communications we’ve received from some folks, via our Customer Service team, a frenzy abounds. We wonder how much we’ve allowed ourselves to become caught up in it.

At the same time, we’re glad we’ve launched those crypto services. Because at the very least, we hope the expertise of our in-house talent can prevent some folks from making terrible mistakes with cryptos…that we can save them from the frenzy.

Our entry level Secret Crypto Network service aims to demystify cryptos…to educate…and to recommend a handful of ‘blue-chip’ cryptos.

Our premium level Crypto Tech Investor service is for those folks who believe they know the basics, and are comfortable investing and speculating in much riskier cryptos.

But, in short, all cryptos are risky.

Oh, and by the way, bitcoin has just hit another all-time record high. It’s up 913% this year.

Markets

Overnight, the Dow Jones Industrial Average closed up 81.25 points, or 0.35%.

The S&P 500 closed up by 0.49 points, or 0.02%.

In Europe, the Euro Stoxx 50 index ended the day down 8.6 points, or 0.23%. Meanwhile, the FTSE 100 added 0.9%, and Germany’s DAX index fell 0.18%.

In Asian markets, Japan’s market is closed in observance of the Culture Day holiday. China’s CSI 300 is down 0.14%.

In Australia, the S&P/ASX 200 is up 32.69 points, or 0.55%.

On the commodities markets, West Texas Intermediate crude oil is US$54.81 per barrel. Brent crude is US$60.86 per barrel.

Gold is trading for US$1,276.75 (AU$1,660.96) per troy ounce. Silver is US$17.13 (AU$22.28) per troy ounce.

The Aussie dollar is 76.84 US cents.

Bitcoin is US$7,031.35.

Quick, while there’s time

In other matters, those not to do with bitcoin, our latest trading masterclass begins today.

It’s hosted by Jason McIntosh, the top dog at our Quant Trader service.

If you’re quick, you still have a chance to join in, and listen to Jason share his extensive knowledge on how to trade the markets. It’s a fascinating five-part series. And what’s more, it’s completely free to take part.

If you haven’t registered an interest in learning Jason’s trading methodology, it’s not too late. But it soon will be. To take part and learn how to trade the markets like a pro trader, just go here.

More than cryptos

Meanwhile, as the excitement heats up over bitcoin and other cryptocurrencies, our new stock expert, Ryan Dinse says, ‘Move over bitcoin, make way for Blockchain’.

You can see what he means by that here.

To be clear. Ryan doesn’t mean that this is the end of bitcoin or cryptos in general. If anything, Ryan believes the opposite.

He’s as excited about the sector as he’s ever been.

It’s just that while most folks are going cuckoo solely about the speculative opportunities within cryptocurrencies, Ryan is taking a closer look at the business applications of cryptos.

Because when it comes down to it, that’s the most important part. Without the business and technology application, cryptos are worthless.

To paint a comparison, cryptos without the business application are like a copper futures contract without a use for copper – it would be worthless.

If would be like a milk futures contract without the need for milk – worthless.

Or a gold futures contract without the need for gold – ooh, we’ll leave that one there. That could open a whole other can of worms.

By the way, Sam Volkering is back in town for a few days. Seeing Sam and Ryan banging on about cryptos, is like the crypto version of the Rumble in the Jungle! Although I’m not sure who is Foreman and who is Ali.

But back to the point. This is the thing that most folks have completely missed on cryptos:

They think it’s all about the speculation.

They look at 24-hour gains like these, and they forget about the practical and business aspects of cryptos:



chart image

Source: Coinmarketcap.com
Click to enlarge

4,058% in 24 hours for Anoncoin. 527% in 24 hours for VegasCoin.

488% in 24 hours for Greencoin.

Bonkers!

We can’t think of any other word to describe it.

The question is: what is the substance behind those coins? Is there any? Or is it just pure speculation?

We don’t know, so we won’t cast judgement on them.

But that’s why we have folks like Ryan Dinse and Sam Volkering on our payroll.

Speak to most financial advisers, and they’ll just tell you it’s a bubble and to not touch it with a bargepole. That’s just about the only advice they’ll provide.

In our view, not providing any advice is worse than providing bad advice — if you get our drift.

Because we know what investors are like. They want information. They want advice. And if we don’t give them advice, they won’t forget about the idea…they’ll go looking for it somewhere else.

In which case, we don’t know where they’ll go, who they’ll ask, and how much of a sucker someone will make of them.

That’s why we’ve recently launched two crypto advisories. After just four months, Secret Crypto Network is already close to being our biggest subscription service, with more than 16,000 subscribers.

We like to think that by giving folks advice, and educating them on the sector, they’ve become wiser about how it all works.

Of course, that doesn’t guarantee that some folks won’t make stupid decisions. But we’re certain it will help limit those stupid and rash decisions.

And while Ryan’s new investment advisory, Exponential Stock Investor, isn’t strictly a crypto service, he is focusing on the ways that Blockchain technology and business practices are colliding to create a new wave of innovation.

As a small-cap guy, that’s what we find so exciting about the whole thing. The actual cryptos themselves, we can take it or leave it. For the record, we prefer gold. But the Blockchain tech. That’s something else.

While most are going cock-a-hoop over cryptos and the gains on offer, it’s possible that the biggest gains from this trend won’t come from cryptos, but will come from a more familiar source — small-cap stocks.

Check out Ryan’s work here.

Exponential growth

While we’re on the subject. Goldman Sachs Group Inc [NYSE:GS], chief executive officer, Lloyd Blankfein, offers his take on crypto. As he told Bloomberg TV:

I read a lot of history, and I know that once upon a time, a coin was worth $5 if it had $5 worth of gold in it. Now we have paper that is just backed by fiat…Maybe in the new world, something gets backed by consensus.

Maybe. As we say, we prefer gold. But at the moment, the consensus says, ‘stick gold up your jumper, we want bitcoin’.

The following chart shows the flat and then exponential rise of the Bitcoin price:



chart image

Source: Bloomberg
Click to enlarge

It took 873 days for the Bitcoin price to go from less than US$1 to more than US$1,000.

It took about 56 days for it to go from US$2,149 to US$3,341.

It has taken it four days for it to go from US$6,099 to the current price of US$7,203.

[Note: It has risen around US$170 in the 30 minutes it took us to write from the ‘Markets’ section above, down to here!]

The one other observation we do make is how mainstream folks now have to admit that the current money system is a fraud. In their criticism of bitcoin, which they say isn’t backed by anything other than trust, they’re forced to admit that the same is true of the paper money system.

As a fan of sound money backed by gold, we can only wonder if the emergence of bitcoin will in some way help to make people appreciate and realise the value of that real money (gold).

We’ll see.

Out with a bore (in with another bore)

Dr Janet Yellen will leave the US Federal Reserve in February.

Jerome Powell will replace her.

One boring economist who thinks they can manipulate the economy at their whim will be out.

One boring economist who thinks they can manipulate the economy at their whim will be in.

But through it all, one things remains the same: Gold is still gold.

Cheers,
Kris