Category Archives: Cryptocurrency

Finding Evidence of Crypto Progress

Do I owe Dr. Doom an apology?

Nouriel Roubini (aka Dr. Doom) is a widely respected economist who is fond of pontificating on everything bitcoin cannot do. He recently earned a place in a column I wrote for our First Stage Investor newsletter when he said, “How could [the SEC] ever approve such ETFs given widespread price manipulation of bitcoin and other cryptocurrencies?”

Roubini is part of a “proud” tradition of people making dismissive predictions about new technology. IBM Chairman Thomas Watson issued one of the most famous ones in 1943.

“I think there is a world market for maybe five computers,” Watson said.

Respected astronomer Clifford Stoll joined the naysaying tradition in a 1995 Newsweek op-ed with this doozy of a statement about the internet.

“The truth is no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works,” Stoll wrote.

When technology hits a roadblock, the naysayers get louder. And when markets crash, like the crypto market did in 2018, investors immediately take it as an indictment of a technology’s viability. It’s more of a gut reaction than anything else, but it’s powerful.

The general public has soured on blockchain and crypto-related technology, and Roubini has given this largely emotional response a pseudo-intellectual sheen…

Which makes him an irresistible target for me. But you know what?

I think I’ve done him wrong. I’ve unintentionally put Roubini in the position to do the impossible. To understand what I mean, let’s back up a little.

Bitcoin wants to replace government-issued (and controlled) money and middlemen of all stripes (though Satoshi Nakamoto had mostly bankers in mind). Nakamoto’s whitepaper spelled out in broad terms the technology that could do all this.

It is precisely these claims that Roubini is trying to prove false.

I always thought Roubini’s problem was that he was judging the beginning of a movie instead of the whole thing. And that beginning he’s judging is just a few minutes of a film that will be decades long.

On the basis of the first five minutes of the movie, Roubini can make a guess on how it turns out. But how could he possibly know?

To insist that he’s right after watching a mere five minutes of the movie is, simply put, laughable. Just because Roubini’s assertion cannot be proven wrong doesn’t mean he is right or should be believed.

The truth is, there’s no proving bitcoin’s (and other crypto user cases) claims. It’s just as unprovable as, say, the claim that a teapot is orbiting the sun but is too small to be seen by current telescopes.

This analogy comes from Bertrand Russell, one of my favorite philosophers. He argues that the burden of proof should be on the ones making the unprovable (unfalsifiable, in his words) claim rather than on others (in our case, Roubini) to disprove those claims.

Bitcoin does have some followers with unwavering faith. Everybody refers to them as “believers.”

They don’t rely on proof. Many of them are technologists. They believe in the technology, in themselves and in their ability to unleash the vast potential of blockchain technology (which underpins bitcoin) on the world.

And every day I look for evidence (as opposed to proof!) that their faith in the technology and in themselves is intact. Because, to tell you the truth, I’m not a believer. I need to see that progress is being made and will continue to be made.

The good news is, I’m seeing that progress. I could give you dozens of examples of companies whose blockchain user cases are in beta with plans to go live in the near future.

But instead, I’ll let you in on one of the best ways to track progress: the growing number of “commits” (or revisions) to blockchain projects and developer tool downloads. They total in the hundreds of thousands. Check out the trends for 1,458 individual cryptocurrencies here.

It’s not a guarantee that this massive activity will be successful in turning crypto into a global industry used by billions. Time will tell. And we have to be patient.

But while Roubini and others like him continue to argue about bitcoin’s value, bitcoin’s popularity (or lack thereof) has nothing to do with its real value. Its real value will be determined and driven by a global community of developers working behind the scenes to make bitcoin’s impact felt on a massive scale.

Amid the disappointment of falling prices, the important work of bringing this technology to the masses is advancing.

Good investing,

Andy Gordon
Co-Founder, Early Investing

Just the Tip of the Wall Street Iceberg

Sometimes, numbers need a little bit of context…

There are 466 crypto funds created to date… nearly 100 just this year… and more than $7 billion in crypto funds waiting to be unleashed…

These figures come from a new study by Crypto Fund Research. The growth of assets managed by crypto funds has also been impressive…

But let’s not get carried away. Compared with traditional hedge funds, this is peanuts.

The top 500 non-crypto hedge funds manage around $1 billion or more of assets…. each!

More than 700 hedge funds were launched in 2017, and there were 156 crypto fund launches in 2017, according to the Crypto Fund Research report.

Crypto fund investing is just scratching the surface.

It isn’t so much in its infancy as it is in its pre-infancy.

It’s more like an incubation period.

Crypto funds account for less than 0.1% of total hedge funds’ assets.

Crypto’s Mysterious Behavior

But there is something interesting – some would say even mysterious – going on here.

Logic would dictate a downturn in funds launched this year. Bitcoin prices have fallenafter peaking in January.

No eyebrows would have been raised.

After all, fund creation in 2017 was seen as the result of rapidly rising bitcoin prices. A slowdown this year would have been viewed as an understandable reaction to fallingprices.

Further, these are professional investors who nurture the savings of the wealthy. They pay attention to how prices are trending.

Yet, the opposite happened.

Crypto funds are on pace to beat last year’s total launches… despite sluggish prices and a continuing lack of regulatory clarity from the government.

The question is…


I’ve identified three big reasons.

1. Transformational technologies. Transformational technologies don’t grow on trees. Before the blockchain came along, there was the internet. Before that? We had the car, airplane and television. And before that, we had Edison’s light bulb and Franklin’s electricity. That roughly averages out to transformational technology coming along once every other generation. There’s FOMO at play here, but that’s not the whole story. Imagine if the stock market went south. How many funds would be starting or increasing their stake in the S&P 500, DJI or Nasdaq? NONE. So why have professional investors ignored falling prices and jumped into bitcoin?

2. The proving grounds. We’re about to find out how well these technologies work and if they can scale. Over the next two years, more than 75% of the active fintech blockchain projects will go from proof of concept to live production. In the meantime, the crypto and blockchain industries are attracting many of the world’s best developers, entrepreneurs… and investors. Marc Andreessen (Andreessen Horowitz)? Check. Fred Wilson (USV)? Check. Mike Novogratz? Check. Benchmark and Sequoia? Once again, check.

And now we see other VC money pouring in, catching up to hedge funds investing in crypto. Take a look at this chart…

Existing tech/fintech VC firms are expanding their investments into blockchain startups and launching their own blockchain funds.

3. The beginning of the end of the final hurdle. Here’s why you need to pay attention to my Co-Founder, Adam. He’s seeing what professional investors are also noticing: the establishment of secure, regulated custody of crypto for institutional investors. The lack of a custody solution has kept institutional investors out of the crypto markets. But that barrier is about to go away. “It’s being built out right now,” Adam says. “The ‘institutional catalyst’ theory that I (and others) have proposed is on track. In fact, the case is stronger than ever.”

Bitcoin isn’t getting the most positive press these days. But serious and professional investors understand how little this matters.

They know bumps are part of the journey. They’ve avoided knee-jerk reactions to falling prices. Instead, they’re focused on the enormity and unusual upside of the investing opportunity.

We’ve asked ourselves, What will happen to the price of bitcoin if hedge fund investments in crypto go from 0.1% to, say, an easily attainable 10%?

The number we’ve come up with may be a little conservative, but we think it’s memorable nonetheless.

If you’re curious, I have great news for you.

My colleague Adam will be revealing it to everybody who tunes in to a special event he’s headlining a week from today.

This is one of the most important events we’ve ever hosted for our readers. If you want to know how you can reserve your limited-time spot for this special event – when Adam will specify how YOU can take advantage of the coming explosion in bitcoin and cryptocurrency prices – just click here.

Invest early and well,

Andy Gordon
Co-Founder, Early Investing

I can’t believe this “surfer dude” beat all those Wall Street legends... ​650 of the world’s biggest and brightest minds... I’m talking about legends like Mario Gabelli... David Einhorn... Joel Greenblatt... and Rick Rieder... who, combined, manage more than $5 trillion. All were forced to bow down to one “unheard of” trader from Laguna Beach. Click Here to discover the strategy he used while he had sand between his toes.

Source: Early Investing

Bitcoin’s “New Normal”

Recently, I’ve been wondering about crypto’s NEXT BIG MOMENT. What it will look and feel like when institutional money starts pouring in.

So I did a little digging…

I found out that what’s new in this country is old hat in other parts of the world.

A bitcoin exchange-traded product has been around in Europe since 2015! An ethereum one has been around since 2017.

Now, these are ETNs, or exchange-traded notes. They’re not exactly ETFs (exchange-traded funds), but they’re very similar. Unlike ETFs, they don’t allow for ownership in a pool of securities. Rather, they’re debt instruments that mature.

But, like ETFs, they follow an underlying index. These ETNs follow indexes that mirror the price of bitcoin and ethereum, with the repayment of principal depending on how the index performs.

Europe Before the U.S.

In 2015, a small Swedish company named XBT Provider listed two bitcoin ETNs on the Stockholm Nasdaq exchange – one following bitcoin prices in Swedish krona and the other following prices in euros.

It was a first for Sweden and for Europe.

Anyone could invest. Participants ranged from everyday investors buying as little as $500 to large European institutional clients investing millions. Even with access to institutional investors, these exchange-traded products grew slowly at first.

And then 2017 happened.

It was a breakthrough year. XBT introduced its two Ethereum ETNs. And they took off. Within four months, it had more than $350 million of assets under management (AUM).

XBT followed those two funds with a token fund that tracked ethereum-based ICOs.

It was also a banner year for expanding the accessibility of its bitcoin and ethereum funds. Its customer base grew sevenfold. Brokers and banks from the U.K. (Hargreaves Lansdown), Italy (UniCredit), France (Société Générale), Germany, Belgium and Spain made the funds available to their customers for the first time.

XBT finished the year with more than $1 billion AUM – a 36X improvement over 2016. And the company’s income shot up by 3.5X.

XBT’s funds were bought out by CoinShares in September of that year – another key event. CoinShares aims to offer a full lineup of crypto products. It wants to be the iShares of the crypto-investing world.

It’s now offering a CoinShares “Active” Fund. This is a multicoin, alpha-generating, active strategy fund. It has also rolled out a passive large cap basket fund. (And that’s in addition to the active bitcoin GABI hedge fund Global Advisors (CoinShares’ parent company) launched back in 2014.

Today, its bitcoin and ethereum products are accessible in 179 countries… from any electronic brokerage platform that can interact with the Nasdaq family of marketplaces.

What’s Different, What’s the Same

CoinShares has done a nice job of getting the ball rolling in Europe. And it did so without scams, frauds, hacks or complaints about volatility.

It was, heaven forbid, drama free.

In the U.S., I believe we’re going to see many firms within a relatively short period be approved for an ETF. Will it be as drama-free as it was in Europe? Probably not. But Europe’s experience shows us that bitcoin’s next big moment can take off in a smooth and professional way.

CoinShares used the crypto boom in 2017 to spur the growth of its existing funds and launch additional crypto products. It’s going to play out a little differently in the U.S…

Here, we’ve accumulated a great deal of pent-up demand among institutional investors waiting for ETFs to be greenlighted.

That money is coming. It doesn’t need a boom to pave the way.

It would take nothing short of a crypto crash to dent the impending rush of institutional money into the crypto space.

That’s not in the cards at this point. If anything, we see bitcoin rallying. And bitcoin ETFs would only add to it.

An increasingly user-friendly infrastructure… SEC approved ETFs… the participation of both retail and institutional brokers…

They all add up to a key inflection point in crypto’s continuing journey toward looking like and feeling like mainstream investing – crypto’s “new normal.”

Invest early and well,

Andy Gordon

Co-Founder, Early Investing

I can’t believe this “surfer dude” beat all those Wall Street legends... ​650 of the world’s biggest and brightest minds... I’m talking about legends like Mario Gabelli... David Einhorn... Joel Greenblatt... and Rick Rieder... who, combined, manage more than $5 trillion. All were forced to bow down to one “unheard of” trader from Laguna Beach. Click Here to discover the strategy he used while he had sand between his toes.

Source: Early Investing

Keep Holding On

At Early Investing, we like to hold our crypto. We believe that, despite the volatility in the crypto market and the scary dips that can happen, crypto is ultimately growing in value. And it will eventually overtake the fiat currency system.

Taking this view means adopting a long-term approach to investing.

Tom Lee, co-founder and head of research at Fundstrat Global Advisors, has calculatedbitcoin’s return if an investor had not owned the crypto for its 10 highest-returning days each year.

The top 10 days drastically outperformed the rest of the year – especially in 2013 and 2017. The non-top 10 day returns were negative in four out of the past six years. The dotted line shows the annualized return from 2013 to 2017 would be negative 25% if an investor had missed the 10 best days in each year.

As Adam Sharp pointed out recently, investors are emotional beings. They are susceptible to fear and greed, and that can undermine their judgment. An investor who’s new to crypto would probably look at that chart and feel both fear and greed – fear for the dips and greed for the dramatic highs. They might try to jump in and out of the market to profit from those highs and escape the lows.

But the fact is it’s extremely difficult to pinpoint the bottom of a market. Bitcoin’s volatility just adds to the degree of difficulty. And the fact that most media headlines are fixated on price (instead of bitcoin’s market cap and growing institutional adoption) just adds to the pressure to sell.

According to many different publications over the years, bitcoin has met its demise 322 times.

Yet it’s still here… at a $6,700 price and a $114 billion market cap as I write.

This is why taking the long view is so important. It may look (and feel) terrifying to see crypto prices take turns soaring and plummeting. But the closer crypto gets to mainstream adoption, the more the markets will stabilize. And it’s getting closer all the time.

Take heart and hold your crypto – even when it makes you queasy. This roller coaster has its loops, but it also has a steadily rising baseline. Remember that.

Good investing,

Allison Brickell
Assistant Managing Editor, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Here’s Our Bitcoin and Crypto Outlook for 2018

David Zeiler and I have known each other and worked together for 20 years now. We worked together at The Baltimore Sun, and I hired Dave here when I helped launch and then ran Money Morning.

We’ve become good friends.

I’ve become one of his biggest admirers.

Indeed, I even started a kind of “running gag” with Dave on Twitter, where we’re both active users. Anytime I see Dave post something substantive about Bitcoin or other cryptocurrencies, I “reply” with some variation of this tweet:

#Attention: If you aren’t following @moneymorning #cryptocurrency editor @DavidGZeiler, then you really aren’t following #bitcoin or #ethereum or the #blockchain. Dave is a #mustread/#mustfollow expert on #cryptocurrencies.

Here’s the thing…

While I admit that this is a “running gag” between us, what I’m actually saying is no joke.

No joke at all.

In just a few short years, Dave has become one of the most prescient, most widely read chroniclers on cryptocurrencies. He’s part of the amazing “bench” that Publisher Mike Ward has built here at Money Map Press – and underscores why we’re “investment idea leaders” in areas like technology, cryptocurrencies, energy, medical marijuana, options trading (and trading systems), and wealth creation.

That’s why I invited David to talk specifically about Bitcoin and cryptocurrencies.

Dave amassed his expertise the “right” way – through immersion. He was one of the early Bitcoin “miners” – back when it was still possible for an individual investor to be a go-it-alone cryptocurrency prospector.

Since then, as an Associate Editor at Money Morning, Dave has become one of the industry’s foremost writers/analysts about all things related to cryptocurrencies.

And he’s made some stunning calls along the way.

In early 2016, when Bitcoin was trading at $450, Dave predicted – on the record – that the crypto coin could zoom to $2,000 – and then go higher from there.

Much higher.

As we know now, Bitcoin did soar – just as he predicted. It zoomed past $19,000 before the crypto market collapsed.

When we last talked to Dave, it was during the big Bitcoin sell-off early in the year.

As part of the activities here at 2018’s midpoint, I thought Dave would offer some terrific insights about what to expect in the last half of the year.

He didn’t disappoint…

Crypto Investors Are Set for an Eventful Six Months

William Patalon, III: Okay, Dave – well, we’re certainly in an interesting area when it comes to Bitcoin and its cryptocurrency brethren. The year’s first half has been rough – really rough. Here at the year’s midpoint, and as we look downhill to 2018’s second half, what’s foremost on your mind?

David Zeiler: Well, what I’m looking for – specifically – is a catalyst that will snap Bitcoin and all of its “crypto brethren” out of the slump the sector has been in for the entire year.

Actually, Bill, there are several catalysts – it’s really a question of which one happens first.

My money right now is on the Lightning Network. Lightning is a technology that vastly increases the capacity and speed of the Bitcoin network by allowing transactions to take place in “payment channels” off the main blockchain.

WPIII: Lightning is still a work in progress, though, correct?

DZ: That’s right, Bill, but folks who haven’t followed it closely might want to consider this carefully. You see, Lightning went from “test mode” to “live mode” in March.

“Millionaire-Maker”: A potential upgrade taking place behind the scenes could send the Bitcoin price to unprecedented highs. Few people even know about this game-changer. Click here to learn how you could make millions

WPIII: So this just happened, then…

DZ: That’s correct. Right now, the developers are working hard to make these features user-friendly so that the masses can take advantage of them. When that happens, you’ll see adoption skyrocket and the Bitcoin price along with it.

WPIII: That’s pretty cool, Dave. What else?

DZ: The other major catalyst on the horizon is big institutional money coming into Bitcoin.

WPIII: You and I have talked about this “offline.” As you know, I covered the money management/wealth management sector for years in Upstate New York – where there’s a lot of “Old Money” – and have followed the sector and its trends ever since. And one thing that I keep hearing is that high-net-worth investors are looking to put their cash to work in two key areas of opportunity.

DZ: Legalized marijuana and cryptocurrencies…

WPIII: (laughing) That’s right, Dave, that’s right.

DZ: I think that still holds true in the long run. But I also believe the spike in prices last year and the subsequent big drop has made them wary. A lot of the crypto hedge funds that launched last year got hurt. But as the crypto market recovers, the big players will want in. They’re also waiting for proper regulation by the U.S. Securities and Exchange Commission [SEC]. The current “Wild West” nature of crypto trading is a bit too risky – now – even for a lot of hedge-fund managers.

In the long run, it doesn’t matter which of these catalysts hits first. It’s going to be a “one-two punch” that will start driving Bitcoin higher in the second half of the year and well into 2019.

WPIII: So let’s consider the outlook for the U.S. and global economies – and the financial system in general – and relate that to your expectations for Bitcoin et al.

DZ: Obviously, crypto prices aren’t affected by the economy the way that stock prices are. But cryptos could turn out to be a great “safe-haven investment” in the last half of 2018 if the stock markets take a tumble. All the capital fleeing stocks will have to go somewhere. Have to.

You know, some of this cash will move into gold and other precious metals. But Bitcoin and Ethereum prices could get a boost from any significant pullback in stocks – especially if that sell-off is triggered by a fear-inducing event.

WPIII: Such as…

DZ: I’m talking about things like President Donald Trump’s trade wars, a confrontation with Iran, a major incident in the South China Sea – which I know you’ve been chronicling for years and were way ahead of everyone in assessing. I think President Trump makes Wall Street nervous, especially when it comes to foreign policy – because he’s unpredictable. That unpredictability is bad for stocks – but good for crypto.

READ MORE: The South China Sea showdown is dangerous, but one small firm could potentially save the U.S. Seventh Fleet. Click here

WPIII: Okay, given all the ground we’ve already covered here, let’s get to your predictions. What’s your outlook for the crypto market in the last six months of this year? And beyond, if you want to go out that far…

DZ: Well, Bill, it goes without saying that the first half of the year has been rough for crypto. Most of these coins are down 65% to 70% from the all-time highs they reached back in December. But lately, the decline has leveled off. To some extent, news and other current events will drive prices. But I do believe one or more of the catalysts mentioned earlier will take hold by late summer or fall.

WPIII: And if or when that happens?

DZ: Prices will bounce back. And once they start to move up, they’re likely to move fast. That’s what we’ve seen in previous Bitcoin recoveries. And the recovery ahead of us – whenever it comes – will be the biggest yet. We’ll get past the all-time highs and then some.

WPIII: Timing?

DZ: Bill, if this doesn’t happen by the end of 2018, then I believe it will happen in the first half of next year, to be sure.

And here’s a key point: This recovery won’t be limited to Bitcoin: It will apply to most of the top cryptocurrencies. They tend to follow Bitcoin.

WPIII: Okay, so we’ve talked about your prediction, your “forecast.” What are the biggest threats – the biggest “wild cards” – that could impede this?

DZ: In my mind, regulation is the biggest wild card. We know the SEC is looking hard at cryptocurrencies in general and ICOs [initial coin offerings] in particular. So is the U.S. Commodity Futures Trading Commission. A lot of crypto veterans think regulation will be a disaster. They think the regulators want to kill cryptos or strangle their revolutionary potential.

WPIII: But you don’t believe that, do you?

DZ: No, I don’t. In fact, it doesn’t even make sense. They – the regulators – certainly want this to succeed.

Stunning: New innovation will be like “adding twin turbos to the Bitcoin engine” – and could send its price to $100,000. Learn more

WPIII: Right, because regulators understand that innovation – and this certainly qualifies – is good for the economy, creating growth, new business opportunities, and needed job growth.

DZ: That’s exactly right.

You know, last fall I interviewed Emma Channing, the general counsel for Argon Group, the investment bank that’s working with the tZero exchange. She told me she talks to SEC officials all the time, and the perception that they’re “out to get” crypto is totally off base. Channing told me the SEC sincerely wants crypto to succeed – but at the same time wants to fulfill its mission of protecting investors.

WPIII: Those two things aren’t mutually exclusive.

DZ: They aren’t. But having the two together – breakthrough innovation and a sturdy, realistic regulator structure – takes more time.

Remember, too, that regulation is one of the key pieces big institutional investors are waiting for. Retail investors, too. People need and want regulatory clarity. People want to know they’re not going to lose all their hard-earned money to a scammer or sink money into an ill-conceived project. Regulation will force transparency and disclosure. When that exists for crypto, it will open the door to a torrent of fresh capital. The only question is how long it will take for the regulators to get the rules in place.

WPIII: Given this backdrop, what’s the biggest opportunity for profit here? What are you most focused on?

DZ: The biggest risk in the crypto world is falling into the trap of thinking that buying the newest and cheapest crypto is the path to fabulous wealth. People imagine that every ICO will be “the next Bitcoin.” But recent experience has shown that a lot of the ICOs out on the margin are scams.

That’s why I actually think there’s still plenty of profit – and less risk – in the major cryptocurrencies like Bitcoin and Ethereum.

Just think about it, Bill: As we sit here talking, Bitcoin is trading at about $6,000. If it gets back to its all-time high within the next year, you’ve tripled your money. Sure, it’s not a 10,000% gain. But we’re not likely to see that again. Some of the better cryptos trading under $1 today might get to $10, but they’re not going to hit $10,000 like Bitcoin did.

If you want to gamble a little, there are the second-tier coins like Cardano, IOTA, Ripple, Stellar, Neo, and Monero. You’re still looking mostly at 3x to 5x gains, though, at least in 2018. The smart move in crypto, since it’s so early in the game, is to diversify among a number of these top prospects. And make sure you include some exposure to Bitcoin and Ethereum, as well. Betting everything on one coin at this point just isn’t smart.

WPIII: Are there other ways to participate? Are there funds, ETFs? Is there a “safety play” or two folks should consider, Dave?

DZ: For some investors, buying individual cryptos is just too scary. There’s a lot of concern about exchanges getting hacked. Plus, you need the technical chops to manage your own wallet.

I get all that, I really do.

So if you’re risk averse but still want to participate in this market of promise and innovation, there are other ways to go.

See Why Bitcoin Is Far from Dead: Cryptocurrency legend Michael Robinson just revealed why Bitcoin could be poised for a record-breaking rebound. Before the mainstream public gets any wiser, you need to see this now.

WPIII: Like “blockchain,” for instance?

DZ: Yes, that’s a great way to go. Blockchain is a kind of “building block” element of the cryptocurrency paradigm. It’s the technology “underpinning” that makes cryptocurrencies work.

There are no “pure play” blockchain companies right now, though a lot of the big financial firms and fintech companies are involved. Given that fact alone, it’s worth investing in the potential of blockchain through blockchain ETFs.

Right now, in fact, there are five of these ETFs. They don’t buy cryptocurrencies. Instead, they buy stocks of companies working on blockchain technology. The portfolios include big tech companies like IBM Corp. [NYSE: IBM] and Microsoft Corp. [Nasdaq: MSFT], as well as smaller companies that are mostly focused on blockchain.

I actually wrote about them recently.

WPIII: Is there one you like the best?

DZ: Yes. If I had to pick one, it would be the Amplify Transformational Data Sharing ETF [NYSE Arca: BLOK]. I like this ETF because it has attracted the most capital and is actively managed, which means it will be able to adapt its holdings quickly in a rapidly evolving sector.

WPIII: This is great stuff, Dave, which is why I really wanted to get you in front of my subscribers again.

Okay, so let’s talk strategy.

Is there a strategy that cryptocurrency investors should use in the year’s second half?

DZ: Well, Bill, when I look at this, the good news I see is that the admittedly steep decline in crypto prices in the first half of the year has brought prices down so much that they’re really cheap – at least for the time being.

And that’s not some attempt to varnish the reality of what has happened. But as you know from our many talks, both in formal interviews and “offline,” I really do believe in this market. I really do believe this is a transformative technology.

You know, Bill, I remember that – a while back – you did this fascinating piece about the “history of money.” You argued that cryptocurrencies were a logical next step in the process.

I loved that piece and your explanation. It was elegantly simple – but so very true.

WPIII: Investors get so caught up in the “gee-whiz” technology that they lose sight of the bigger picture.

DZ: Exactly – that’s exactly right.

Cryptocurrencies are the next logical progression in payment technology. The technology blunts some of the weaknesses of cash, credit cards, and digital payments by offering greater speed, greater security, [and] greater acceptance. Those are all good things.

The one difference is that crypto coins are directly investable.

And that makes them a wealth opportunity – and a good one.

The fact that prices are lower now means that you have a lower entry point than you did six, eight months ago. And lower entry points now mean higher profits later.

Now, given how long you and I have worked together – and how much you care about your Private Briefing subscribers, Bill – I know what you’re about to ask me: Could Bitcoin and other cryptos go lower?

Life-Changing Profit Potential: One tiny firm is rapidly developing the parts for a game-changing technology – and the gains from its stock, trading for less than $10, could turn every $1,000 invested into $4,719. Learn more

WPIII: Well, you beat me to the draw on that one.

DZ: Have to win sometimes, right? [both Dave and Bill laughing]

In all seriousness, my answer is “yes,” of course they could. But I have to believe that prices aren’t likely to go that much lower before they start to rebound. So the strategy is to invest what makes sense for you – people still shouldn’t make crypto any more than 5% of their portfolio – and to do it sooner rather than later. Those of us who have been involved with Bitcoin for a long time know that the price can leap up just as fast as it dropped. You don’t want to wait until Bitcoin is back up to $15,000 to buy.

WPIII: Dave, this has been great – as always. Thanks for joining us here.

DZ: Always glad to do so, Bill.

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Source: Money Morning

FRED Starts Publishing Crypto Data

When does something cross over from fad to part of life? It’s a question that’s vexed investors for decades.

Sometimes it’s easy to pinpoint the moment.

Before there were smartphones, there were personal digital assistants (PDAs) and electronic organizers. They did almost everything a smartphone did except make phone calls. For 23 years, they were barely a niche product. Objects of curiosity, if you want to be generous. And if you were one of the few people who used one, there was a good chance you would be mocked for it.

Then came the iPhone in 2007. It was basically a PDA that could make phone calls and play music. But consumers loved it. And the smartphone became a fixture of modern life.

Sometimes, it’s much more difficult to pin down the moment that changed everything.

In the mid-‘90s, the conventional wisdom was that the internet was a fad that wouldn’t take off. This line of thinking from author and astronomer Clifford Stoll was par for the course in 1995:

Then there’s cyberbusiness. We’re promised instant catalog shopping – just point and click for great deals. We’ll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obsolete. So how come my local mall does more business in an afternoon than the entire internet handles in a month? Even if there were a trustworthy way to send money over the internet – which there isn’t – the network is missing a most essential ingredient of capitalism: salespeople.

Whoops. Stoll clearly didn’t see Amazon coming.

Newspaper publishers told the people building their online brands (their own employees!) that the internet was a waste of time and money and people wouldn’t want to read news online. I know – because I was there. I was one of the journalists creating online journalism content and business models.

Music companies didn’t believe people would want to listen to digital music. The list goes on.

So when did the internet move from fad/object of derision to our constant companion?

It wasn’t in 1993 when the first web browser (Mosaic) was released. Nobody knew what was going on then.

It wasn’t in 2000, when the tech bubble burst. That was a time for “I told you so’s” – proof that the internet wasn’t going to last.

It wasn’t 2001, when the number of adults using the internet in the U.S. finally reached 55%, according to the Pew Research Center.

And it wasn’t in 2007, when broadband penetration cracked the 50% barrier.

The die had been cast well before then. Most people just missed it.

The moment the internet gained the credibility it needed to last came in 1994, when the White House released its first website. By today’s standards, the 1994 White House site is terrible. But that doesn’t matter.

What counts is that, by publishing a website, the White House gave the web legitimacy. It went from a slightly underground publishing platform to a legitimate way to publish information and reach people. If the White House was publishing on the internet, it meant the internet was safe to explore and use. It gave permission to skeptics to start using the internet. It told them the web was worth their time.

It was the type of endorsement money couldn’t buy.

Cryptocurrencies received that kind of endorsement this week when the Federal Reserve began tracking and publishing the prices of bitcoin and other key cryptocurrencies. The research division in the St. Louis branch of the Federal Reserve (FRED) is publishing the data.

This is the 2018 equivalent of the White House publishing a website. The central bank of the United States, in its own understated way, legitimized cryptocurrencies. Why would the Fed track assets it didn’t believe were legal, legitimate and worth tracking? The short answer: It wouldn’t.

Bitcoin and other digital currencies like it have become an important asset class in the investment community. The Fed just acknowledged it.

FRED is one of the go-to resources for economic data. Investors and economists from all over the world rely on FRED for information. And FRED just lent its credibility to bitcoin and cryptocurrencies.

This is a significant moment.

But it’s not this week’s only significant crypto moment. Facebook is starting to allow cryptocurrency advertising again as long as the ads – and the companies buying the ads – meet strict guidelines.

And top venture capital firm Andreessen Horowitz announced in its blog that the company has launched a $300 million “venture fund that will invest in crypto companies and protocols. (The) fund is designed to include the best features of traditional venture capital, updated to the modern crypto world.”

FRED’s decision to list cryptocurrency data is a significant milestone in cryptocurrency history. It marks a final countdown to mainstream (and Main Street) acceptance and investment. The Facebook and Andreessen Horowitz announcements take us further down that path.

Good investing,

Vin Narayanan
Senior Managing Editor, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Source: Early Investing 

F.A. Hayek Saw Bitcoin Coming 34 Years Ago

Independent money, free of government control, has long been a dream of liberty-minded individuals.

Nobel Prize-winning economist and free thinker (a rare thing) F.A. Hayek described the main problem with a single group having a monopoly on money: a profound lack of innovation. Here’s an excerpt from his 1984 interview with the Cato Institute:

The great trouble is that money wasn’t allowed to develop. After 200 or 300 years of the use of coins, governments stopped any further developments. We were not allowed to experiment on it, so money hasn’t been improved, it has rather become worse in the course of time.

Money certainly has devolved over time. It has descended from being backed by hard assets, like gold and silver, to its 100% fiat status today. There’s nothing backing it, and there’s no limit on the amount that can be printed.

There’s not even precious metals in coins anymore – not even copper in pennies! So we can see that innovation dies and money loses value when centralized powers have control over it. It’s happened throughout history.

But Hayek was truly ahead of his time. He went so far as to think about how we could develop an alternative monetary system. Here’s a Hayek quote from a different 1984 interview:

I don’t believe we shall ever have a good money again before we take the thing out of the hands of government – that is, we can’t take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.

So Hayek thought that we could create independent money in a “roundabout way… something that they can’t stop”…

Sounds like crypto to me…

It uses a decentralized network of computers to solve the “something they can’t stop” part of his idea. Nobody owns bitcoin. It is an independent network of millions of people voluntarily using it and improving on it.

Finally, Innovation in Money

Cryptocurrencies are the first real innovation in money in centuries. Think about the implications of that…

For most of modern history, governments have not allowed any competition in money. But now, the cat is out of the bag. The code is out there and free for anyone to use. Shutting it down is next to impossible.

Hayek realized that a clever system like crypto would be needed for money to be truly free.

The pioneers who helped bring bitcoin and cryptocurrencies to life, such as Nick Szabo and Satoshi Nakamoto, designed the systems brilliantly. Good cryptos are decentralized – running on tens of thousands of computers all over the world. There are checks, balances and incentives built in. Bitcoin has proven itself to be remarkably secure over the last nine years. And it’s constantly evolving and improving.

Hayek predicted the usefulness of independent money, but I don’t think he imagined the incredible flexibility of it in action.

It’s independent money. And it’s the first truly programmable money. Both concepts are revolutionary.

We’re beginning to see these concepts in action. In countries where inflation is high, cryptocurrency is becoming an everyday part of life. It’s a way to protect and preserve value where government money is failing.

On the “programmable money” side of things, projects like Ethereum are leading the way. This is an equally promising aspect of crypto. Having programmable, flexible money is allowing for all sorts of innovation. Initial coin offerings are the first killer application, but it certainly won’t be the last.

We’ve only just begun to see the potential of crypto. Personally, I can’t wait to see what pops up over the coming years. Independent currencies capable of being programmed like software offer nearly unlimited possibilities.

Hayek died in 1992, but I’m certain he would love cryptocurrency if he were still around. The fact that he predicted something like crypto would be necessary to move money forward is nothing short of remarkable.

Good investing,

Adam Sharp
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Buy This Blockchain Keeping Our Food Safe

So far in 2018, cryptocurrencies, such as bitcoin, have been nothing more than a way to lose a lot of money. But that doesn’t mean that the technology behind bitcoin – blockchain – should be the ‘baby’ that is thrown out with the ‘bath water’.

That is why I want to bring you a series of articles, of which this is the first, where I show you some of the leading firms that are making blockchain technologies a part of their everyday business operations, benefiting both the companies and consumers.

A 2017 survey from Juniper Research of 400 executives, managers and tech staff found that almost 60% of large corporations are considering using blockchain. Corporate spending on blockchain software is expected to reach $2.1 billion this year, up from $945 million in 2017, according to the research firm International Data Corp (IDC).

IDC added that distribution, retail and manufacturing are among the industries due to ramp up blockchain spending in 2018. This coincides with what I’ve noticed – that companies are looking to apply ledger technology to aid in the streamlining of their supply chains.

Using current technology, it is difficult to trace every item through every step of a supply chain that often very lengthy and complex, involving multiple parties and multiple jurisdictions. But distributed ledger technology changes the equation.

As to why, let me again give you a very brief explanation of what happens, courtesy of the Wall Street Journal:

  • “A blockchain ledger allows participants to add blocks of information after each party runs algorithms to evaluate a proposed transaction. If the parties agree that the transaction looks valid — identifying information matches the blockchain’s history and follows the rules created by the participants — then it will be approved, time-stamped and added to the chain. The data, encrypted and unchangeable, is always up-to-date on all participants’ systems.”

 Using Blockchain in the Food Supply Chain

One area that certainly needs technology that will trace an item through every step of the supply chain is food. There have been health scares related to food in almost every country on Earth.

So it is comforting to see that one of the largest food retailers in the U.S. – Walmart (NYSE: WMT) – is beginning to adopt blockchain technology in its food supply chain. Since 2016, Walmart has been working with IBM (NYSE: IBM) to develop software that uses blockchain to track products through its supply chain.

The company was among the early adopters of blockchain, with its operations in China. It deployed blockchain to ensure the place of origin and quality of pork in China, a country that has been plagued by food-safety scandals.

In December, Walmart teamed up with IBM and Tsinghua University in China to create a blockchain food safety alliance. The goal is to create a standards-based way of collecting data about the origin, safety and authenticity of food, using blockchain technology to track food items in real time through the supply chain.

Walmart believes blockchain can increase accountability and transparency among its multiple suppliers and middlemen. When something goes wrong, the point in the supply chain — and the participant that is at fault — can immediately be identified and verified. Blockchain also allows all the parties to see the extent of any damage to goods. For instance, if there was a case of tampering, it is likely that the specific warehouse where the tampering occurred could be pinpointed and any recall can be restricted to products that passed through there.

Walmart’s U.S. Food-Safety Blockchain

 The company has also begun to use blockchain technology here in the U.S. to trace food products through its supply chain. A blockchain will manage supply-chain data for about 30 products this year, after Walmart ran a major test of the technology in conjunction with IBM for several months in its mango supply chain between the U.S., Mexico and some South American countries.

After a mango is picked from a tree, it makes many stops before getting to your local Walmart. In fact, 16 farms, two packing houses, three brokers, two import warehouses and one processing facility were involved with the test. They all used a mobile app from Walmart to send details such as harvest dates, locations and images of their fruit to the retailer’s blockchain. The company says this process is simpler and more secure than the array of barcodes, scanners, paper forms, etc. that it used previously.

And Walmart found that using blockchain can reduce tracking times dramatically. . .it takes only about two seconds to trace a package of mangoes at any point from the farm to the store. Previously, it could take days or even weeks to work through the paper chain.

This could prove to be a life saver in the event of tainted food sickening people. With the speed and accuracy of Walmart’s blockchain, health officials could immediately be directed to the point of the contamination. And Walmart will save money since stores will only have to pull the mangoes off shelves from one location and not all mangoes.

I believe adoption of this technology can only help Walmart in its battle against others in the grocery business, including Amazon, and improve its profitability.

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How Order in Crypto Land Can Pave the Way to a New Bull Market

As a rule, I hate rules.

They’re too often used to defend outmoded practices and vested interests that impede progress.

Of course, we need some rules. But I wish we chose more carefully when and where they should apply.

Crypto vs. Rules

Cryptocurrencies take an interesting approach to rules.

Rules are embedded in the software that gives these coins life.

For example, only 21 million bitcoins can ever be created. That’s the software speaking, not an outside party.

I have no doubt that the anonymous creator of bitcoin, who goes by the name of Satoshi Nakamoto, hated the idea of rules being foisted on bitcoin (and other cryptos) from the outside.

The Crypto Creed Is Evolving

True believers in crypto don’t like rules. They like rules foisted on them by an “overreaching” government even less.

Government rules – and the administration of those rules – have slowed down the machinery of the global economy.

This has made noncooperation with government agencies a point of pride for crypto players – and a sticking point for government bodies like the Securities and Exchange Commission (SEC).

In this context, the government crackdown that has depressed crypto prices this year was practically inevitable.

If you haven’t been keeping up with the news, let me give you a brief rundown.

SEC, CFTC and DOJ Have Crypto in Their Crosshairs

It began back in January. That’s when the Commodities Future Trading Commission (CFTC) gifted Bitfinex and Tether with subpoenas.

The SEC joined the fray in March. It issued dozens of subpoenas to major crypto players, including exchanges, funds and companies that had initial coin offerings (ICOs) or were in the process of launching coins.

Late May saw another probe launched – this one courtesy of the Department of Justice (with an assist from the CFTC). They’re looking into the manipulation of prices through spoofing (creating the illusion of rising demand by submitting orders to buy bitcoin and then canceling). They’re also targeting wash trading (buying and selling to yourself, which creates the impression of trading activity).

Most recently, The Wall Street Journal reported last Friday that the CFTC is demanding more trading data from Bitstamp, Coinbase, itBit and Kraken. CME Group, which offers bitcoin futures trading, gets its prices from them.

CME was granted access to a few hours of daily trading data – after asking for a full day’s worth. The CFTC is reportedly “upset” with this arrangement.

These investigations and subpoenas make it abundantly clear that the government has crypto players in its crosshairs.

But here’s the thing.

It’s not exactly accurate to conclude that crypto is under attack by the government.

The SEC does NOT hate crypto players, ICOs or bitcoin.

What it does not tolerate is price manipulation… bad actors… or scams. It rightly thinks there’s been too much of all three in the crypto world.

And many crypto players are finally distancing themselves from their previous “if you’re not with us, you’re against us” stance.

I say, it’s about time.

Something needs to be done about the $3 billion in fake daily volume, according to investor Sylvain Ribes…

Something needs to be done about rampant price manipulation…

Something needs to be done about the illicit activity that relies on cryptocurrencies. A recent Cointelegraph report says that “approximately one-quarter of all users… and close to one-half of bitcoin transactions… are associated with illegal activity.”

And something needs to be done about all the hacks of exchanges. South Korean exchange Coinrail is the latest platform to be hacked. Last week, it lost cryptocurrencies totaling $30 million to $40 million.

Whenever a hack of this size happens, prices tend to fall. It certainly contributed to bitcoin’s recent price woes.

A Bad News Cycle

Even the truest of true believers, like Mike Novogratz, agree with me.

“Weeding out the bad actors is a good thing,” says the billionaire investor, who’s setting up the crypto merchant bank Galaxy Digital.

But it’s also a messy thing… and a reminder that crypto has not yet escaped its “Wild West” environment.

These investigations are in the early stages and ongoing. Who will be punished and who will be forgiven is still unclear.

The government isn’t blameless in all this. No single agency has taken charge of cryptocurrencies. The SEC, CFTC and IRS have designated most crypto coins, in order, a security, commodity and property.

Who gets the “prize” of regulating crypto is still up in the air, along with everything else.

You’ve heard of the “calm before the storm,” right? Well, this is the storm before the calm… the lawless “Wild West” before the sheriff imposes order.

It’s why prices are scuffling.

And also why we see light at the end of the tunnel.

For cryptocurrency to gain broader acceptance among retail investors and a toehold among institutional investors, a rules-based space needs to be realized.

Rules are coming. And the best news is, unless the government really overdoes it, they will be welcomed by the vast majority of crypto players.

Good investing,

Andy Gordon
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Source: Early Investing 

Here’s Why Bitcoin Is Tumbling Today

bitcoin futures

Source: Shutterstock

The price of bitcoin and several other major cryptocurrencies has dropped sharply in the past 24 hours after South Korean exchange Coinrail said it was hacked over the weekend. Confirmation of the cyber-attack came through a tweet from Coinrail, which sent bitcoin tumbling to two-month lows shortly thereafter.

According to, the price of bitcoin — the world’s largest cryptocurrency — has fallen more than 6.5% over the last day. Likewise, major coins like Ethereum, Ripple, Bitcoin Cash and Litecoin have posted substantial losses.

Through early morning hours Monday, all but three of the top 100 cryptocurrencies by way of market capitalization tracked by CoinMarketCap were in the red. Shares of crypto-proxy stocks like Riot Blockchain Inc (NASDAQ:RIOT) and the Bitcoin Investment Trust(OTCMKTS:GBTC) were also down in morning trading Monday.

Coinrail said that its platform was the victim of a “cyber intrusion” on Sunday. The exchange did not quantify the value of the attack, but Yonhap News, a local publication, estimated nearly $33 million worth of virtual coins was compromised.

A good chunk of the stolen coin has already been recovered, with Conrail saying that “70% of total coin and token reserves have been confirmed to be safely stored and moved to a cold wallet.”

“For the rest, we are looking into it with an investigative agency, related exchanges and coin developers,” the exchange added.

According to the Korea Herald, law enforcement agencies have begun an investigation. A police spokesperson reportedly confirmed that investigators are in the process of analyzing Coinrail’s access history.

The Coinrail heist is the latest in a growing list of publicized crypto exchange hacks, following a massive $500 million theft on Japan’s Coincheck in January and a pair of attacks that forced South Korea’s Youbit into bankruptcy last year.

Meanwhile, The Wall Street Journal last week reported that U.S. regulators are investigating potential price manipulation at four major exchanges occurring after CME Group Inc(NASDAQ:CME) launched bitcoin futures. The exchanges in question have been asked to give investigators their trading data related to futures contracts.

Security and regulatory concerns have contributed to the months-long slump in the global cryptocurrency market. Bitcoin, a bellwether coin for many, has tumbled to about $6,800 after reaching highs of $20,000 earlier this year.

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Source: Investor Place