Taming the crypto ‘wild west’

Friday, 24 November 2017
Melbourne, Australia
By Kris Sayce

  • Half gone
  • Closing Monday
  • Bigger than we’ve ever seen
  • Waiting on the sidelines

You know your editor (Kris) is an old fashioned climate change sceptic.

So it amused us to no end when we came across the following editorial in The Economist magazine this week:

But there is barely any public discussion of how to bring about the extra “negative emissions” needed to reduce the stock of CO2 (and even less about the more radical idea of lowering the temperature by blocking out sunlight).

Perhaps we’ve been living under a technological rock for too long.

But this is the first time we’ve seen the idea of ‘blocking out sunlight’ as a method to combat so-called climate change.

It does of course, raise a couple of key questions in your editor’s pea-sized brain.

The first is, how will those folks who have spent thousands installing solar panels react to the idea that they may not get the direct sunlight they need to power them?

And second, how will the plants react when they need sunlight in order to photosynthesise?

Perhaps ‘blocking out sunlight’ would actually create more problems than it solves. It would no doubt require the mad climate scientists to come up with even crazier ideas — artificial sunlight to power solar panels, perhaps!

Oy vay!

Anyway, we’ll just note it in passing. And now, on with the show…

Markets

Overnight, US markets were closed for the Thanksgiving Day holiday.

In Europe, the Euro Stoxx 50 index ended the day up 9.42 points, or 0.26%. Meanwhile, the FTSE 100 fell 0.02% and Germany’s DAX index lost 0.05%.

In Asian markets, Japan’s Nikkei 225 index is up 29.1 points, or 0.13%. China’s CSI 300 is down 0.86%.

In Australia, the S&P/ASX 200 is currently down 3.59 points, or 0.06%.

On the commodities markets, West Texas Intermediate crude oil is US$58.45 per barrel. Brent crude is US$63.40 per barrel.

Gold is trading for US$1,292.04 (AU$1,694.28) per troy ounce. Silver is US$17.13 (AU$22.47) per troy ounce.

The Aussie dollar is worth 76.25 US cents

One bitcoin is US$8,056.16.

Half gone

Tickets for our next Port Phillip Publishing investment conference, scheduled for April 2018, are now on sale.

But, they are only available for those who are part of our exclusive Alliance program.

If you’re an Alliance member, be aware that half of the 400 tickets on sale have already sold. We expect the rest to sell out in short order.

Plus, we will accept a new intake of Alliance members in mid-December, so tickets will definitely go soon after.

If you’re an Alliance member, and you haven’t yet secured a spot, make sure to do so now. Check your inbox for the invitation.

Closing Monday

Speaking of invitations, if you tuned in for the ‘Project 100-to-1’ event, it looks likely that we’ll close memberships for the Microcap Trader service on Monday at the latest.

Spaces are filling fast. And due to the tiny size of the stocks recommended in this service, we have to keep a tight control on numbers.

Again, if you tuned in for that program, check your email inbox for details on how to join the exclusive Microcap Trader service.

Bigger than we’ve ever seen

Now that we’ve covered the housekeeping, how is it possible that this far into today’s episode we are yet to mention the word, bitcoin.

So there, we’ve just done it.

The rise has been, and continues to be, extraordinary.

Over the past year alone, the price is up 992%:



chart image

Source: Bloomberg
Click to enlarge

It may seem like hyperbole to say it, but we genuinely don’t believe we’ve seen anything quite like this before.

We know the dot-com boom was crazy. We remember the stories of huge stock gains at the time.

For instance, over a two-year period from mid-1997 to mid-1999, the Amazon.com Inc [NASDAQ:AMZN] share price gained 6,904%:



chart image

Source: Bloomberg
Click to enlarge

There were other examples.

Qualcomm Inc [NASDAQ:QCOM] gained 3,049% over roughly the same period.

Juniper Networks Inc [NASDAQ:JNPR] gained 4,188 in 18 months from mid-1999 to late 2000.

So in one respect, the dot-com boom was bigger than the current crypto and bitcoin boom. But in other respects, some of the gains experienced in cryptos are beyond anything ever seen before.

Sure, the bitcoin price is up 922% this year. But it’s up 13.4 million percent since 2010.

Microsoft Corp [NASDAQ:MSFT] is an extraordinary success story. You’ll often hear people say how they wished they had gotten into the stock all those years ago.

But since 1986, Microsoft is ‘only’ up 87,000%.

That is considered to be one of the most successful stock listings of all time. Yet, it pales in comparison to bitcoin and a multitude of other cryptocurrencies.

The question that folks therefore should ask is, how sustainable are the price rises in cryptocurrencies?

As a crypto ignoramus, your editor will defer to the experts. In this case, one of the experts on our staff with an understanding of cryptos is Ryan Dinse.

If you don’t know Ryan, you should make it your duty to do so. I knew when he joined us five months ago that he would be a star for us and our subscribers.

He’s already shown that since launching his new small-cap advisory service, Exponential Stock Investor.

But perhaps more important than his success, is Ryan’s history in cryptocurrencies. He was a certified member of the Digital Currency Council in 2013 — long before most folks even knew what a digital currency was.

He’s a member of Fintech Australia, and has been working with a Swiss-based blockchain FX trading company for the past two years, developing innovative ideas in financial services.

If you’re looking for credentials in this market, it truly is hard to find anyone more qualified than Ryan Dinse.

So that makes us super fortunate to now have two of the most knowledgeable crypto experts on our payroll (Sam Volkering is the other).

We don’t know if cryptos will ultimately turn out to be a radical game-changer in money or technology. It’s possible that it could turn out to be the bubble that many of its detractors claim it to be.

While your editor may not get the full gist of where cryptocurrencies and blockchain are heading, we can see that there is a lot more to it than just a super-bubbly asset price.

We can see that there’s innovation and technology, and the potential to disrupt the way many industries have conducted business for years.

Most of all, we can see the incredible profit potential that cryptos have opened up for folks. But how can the average investor get access to it?

Well, in purely dollar terms, the barriers to entry are low. Much lower than the stock market. The minimum trade size on the ASX is $500.

For cryptos, you can throw just $10 or $20 at an opportunity if you wish.

Of course, as with any punt, the more money you risk, the bigger your potential gains…and the bigger your potential losses. That’s obvious.

So, for most folks, actually getting a foot in the crypto market is relatively straightforward. The difficulty is knowing what to do once you’re in.

That brings us full circle to Ryan. He’s as big an advocate of cryptos as anyone I’ve ever met. But he also believes that the days of buying into any old crypto and watching it climb by quadruple-digit percentage gains are likely over.

Instead, Ryan says that crypto investors need to approach this still-young market in a different way.

A way that he believes can help investors to not only have the best chance to maximise their gains, but allows them to limit their risks too.

It’s a method that Ryan says is reminiscent of the ways big hedge fund managers have traditionally traded their portfolios — looking for the biggest gains while minimising their risks.

He even tells me that his method isn’t so different to the one George Soros used to ‘break the Bank of England’ in the 1990s.

It’s a big claim. But Ryan is a confident guy. Not the kind of guy you would think had been a financial planner at a big bank for more than seven years!

But that’s one of the reasons he left. The bigwigs in the mainstream financial services industry aren’t interested in helping their clients make out-sized gains. They pretty much just want everyone to do the same thing and take the same risks — regardless of an investor’s risk appetite.

Now, that doesn’t mean Ryan is reckless. Far from it. In fact, Ryan’s approach is the opposite of reckless. That’s the point. The approach is designed to help investors figure out the best way to clock up big gains, without putting everything on the line.

If you could do that, you’d be interested right?

Sure. It makes sense. Anyway, we’re working on the final stages of Ryan’s brand new project now. Soon, we’ll be able to reveal all the extraordinary details.

Quite frankly, we’re not sure you will have seen anything quite like this. We’ve never unveiled anything like it before. And we haven’t seen anyone else unveil anything like it either.

Details will be available next week. But if you’ve watched the crypto revolution evolve, and you want a part of it, look out for more details next week.

This is going to be big.

Waiting on the sidelines

Not convinced the market for cryptos can grow any bigger than it already has? Check out this this quote from the Huffington Post:

One hedge fund manager estimates that there could be at least $10 billion of capital currently sitting on the sidelines waiting for this digital Wild West to implement better investing protocols that make it easier for institutional and retail investors to park their wealth.

That hedge fund manager is right. And it’s the exact premise behind Ryan Dinse’s brand new project.

Details next week.

Cheers,
Kris