There are somewhere near 700 cryptocurrencies now. The sector, industry, technology, or whatever you want to call it, has attracted the attention of banks, merchants, credit card or other money transfer companies, and is beginning to attract professional traders, speculators, and purveyors of investment advice.
Two from this last category, Teeka Tiwari and Doug Casey, got together the other day to launch a new cryptocurrency speculating service. These guys are heavy hitters, and they were completely convincing as to the disruptive nature of this technology. We are just beginning to see the first edddies and ripples of what will be a totally massive sea change.
Crypto is a $20-25 billion industry now and the next 12 months will continue to boom.
Casey said that the dollar is in trouble, and cash is under attack, this is driving increasing numbers to seek alternatives. Tiwari mentioned numerous things that have happened in the world financial system recently that are driving investors away from the fiat-based financial system and therefore toward crypto. The only one I wrote down was that as part of the worldwide war on cash the 500 euro note is being phased out over this year and next. The U.S. 100 dollar bill may be next. He said that in 2017 continued troubles will further the anti-fiat trend. Casey believes the Euro will completely cease to exist. The cryptocurrencies allow folks to diversify by putting a small amount of their assets into something that is a rapidly growing technology in its own right but should also remain standing strong if the fiat system actually does go careening through its looming crisis.
Even without a crisis, the world has arrived at a threshhold. It is one at which we can see that the new technology has been proven and has many advantages over the existing system; but at the same time hardly anyone knows about or is using it. Casey said that he used to think that cryptocurrency had no intrinsic value, but he now realizes that it DOES. He says it has inherent utility: amont other things, it provides for a secure store of value, and it efficiently and transparently facilitates transfer of wealth between accounts. It provides these utilities with significantly greater efficiency than existing banking systems, and it will replace them.
In fact the banking industry and other big players have taken it up and are investing heavily in the build-out of cryptocurrency tools to upgrade and replace their systems. They will probably not use the “cryptocurrency” label but will opt for more marketable terms like e-currency and fintech. Who cares what they call it? Cryptocurrency is a term that needs to be retired anyway. At any rate, with all of this going on, Casey and Tiwari both believe a speculative bubble is forming in this new asset class.
Presently crypto or e-currency market caps are presently in the millions, not billions, and there is plenty of room to grow. And by using the “speculative bubble” handle Casey and Tiwari don’t mean that it won’t last. They agree with the banks that e-currency is a disruptive technology that will penetrate finance and replace much of what is now used – like the DVD replaced the videotape, and streaming video as taken a huge bite out of the DVD market. E-currency will radically change the way the world does business.
E-currencies presently represent about 0.007% of the world currency market. If this just went to 1%, that would be over a 100 fold increase. At that rate every $1,000 becomes $100,000. But it should gain considerably more than 1% market share. So what are we looking at? There will come a time when all debit/credit card or cellphone enacted point of purchase sales will be based on this technology. All international trade will will be settled based on this technology. Is that 1% of the world’s currency transactions yet? Nope. We’re way beyond that. So what are we looking at? A 1,000 fold increase? Ten percent market share would get us that. It’s bigger than that.
As an asset class, does the stock market have this kind of potential? Certainly not – nowhere near it. Bonds? Bonds have already ballooned massively and and are a bubble in and of themselves just begging for a pin. In fact it is this massive increase in fiat that is supercharging the potential in cryptocurrencies right now.
If you compare cryptocurrency to stocks or bonds as asset classes, crypto gives you incomparably better odds because as an overall class it is growing exponentially. Why would I try to pick the best among the stocks and hope for 10% – 20% annual returns if I’m really good, when I can try to pick the best of the cryptocurrencies where the potential is so much more? Certainly crypto will be volatile, but as Tiwari repeated several times, the risk reward ratio is dramatically tipped in favor of holding it. One thing he suggested doing is to simply buy equal portions of the five largest cryptocurrencies (besides bitcoin), and just hold on. He was not bearish on bitcoin by any means, but the next five runners-up have more potential in his opinion.
Of course if you really want to shoot for big gains, you could buy the financial advisory service they were touting (if it hasn’t filled up). It is led by Teeka. In the presentation I heard he described his system, and it does sound truly excellent.
He has devised what he calls his BITS System:
B– Business value ratio. He basically means to compare the price to a 30 day average and to buy fear, i.e. buy low, and sell into greed.I– Insiders. Teeka knows them. He is traveling all over the world to meet with them face to face. He won’t recommend a currency unless it solves a problem. He needs to know that developers see its value and will be building applications for it.T– Technical Charts. He is using the RSI. If the RSI has crossed 50 (the straight line) from below, then it has the momentum he requires to recommend it.S– Social Media Sentiment. Chatter on social media leads a jump in cryptocurrencies. When sentiment breaks out like this on a currency, Teeka considers that a green light.
Teeka requires all of these signals to be green before he recommends buying a currency. If you are interested, you can attend his free webinar at 8 p.m., eastern, on Thursday, April 27. Or google Palm Beach Confidential, the name of his service.
But at $1,250 a year his service is too rich for my blood. I plan to buy several of the major e-currencies. Etherium will be one. Teeka said that it solves a problem that Bitcoin has. Instead of taking as much as 10 minutes for a transaction to complete, Etherium transacts in seconds. I’m sure other e-currencies do this, too, but 11 banks have tested it, and tech giants in silicon valley are setting up partnerships with it. On the other hand, if you Google it, you will get 1/40 the hits you will on bitcoin. So it’s got the juice, but it has room to grow.
He also liked one that sounded something like Steemit, or Steem, and Monero, and one he didn’t name that is smaller than Etherium and that DHS is backing. It was trading around $3.50 on 4/23/17. It specializes in cybersecurity.
He said that IBM is going all in on blockchain but that if you are interested in fintech companies, he favors three others. They are not stocks. They are traded on the digital exchanges.
Anyway, as I said, I will be buying some of the currently leading e-currencies. But I have also thrown in with the iPro Network. It has a brand new currency that is just getting listed on the exchanges (as PROC, for Pro Currency).
PROC offers a unique solution that I think is going to make it popular. It offers a free app for shopping online (using regular fiat currency) at the major online retailers, and the shopper gets a cash-back reward. It’s like cash-back credit cards, but the reward is in the form of PROC. That and it is promoted through a network marketing model. This means a growing army of people will be using and telling more people about its benefits.
PROC was not mentioned by Teeka, but I await the moment when it shows up on his radar via the social media buzz that is going to evolve surrounding it. At some point I have a reasonable hope that it will meet all his 5 criteria. But whether it does or not, the risk/reward ratio for owning PROC is in my opinion ridiculously good.
Take a look at PROC:
Or talk to me: