Bitcoin $10,000 Is Here
Bitcoin $10,000 is here... Major companies are catching on to the growing cryptocurrency industry... Congrats to Porter for another great call... A story that's far bigger than cryptocurrencies...
Bitcoin $10,000 is here...
Yesterday afternoon, bitcoin continued its stunning rally, blowing through the $10,000 level for the first time ever and hitting nearly $11,400 at one point this morning.
Six weeks ago, the popular cryptocurrency traded around $4,800. It's now up more than 65% this month... more than 1,000% since the start of the year... and an incredible 3,000%-plus over the last two years...
Bitcoin's market cap sits at around $187 billion, making it worth more than blue chips Pepsico (PEP), Philip Morris (PM), Disney (DIS), and McDonald's (MCD).
And while the debates continue about how far this mania has to run, the recent rally has been undeniably powerful, garnering plenty of media attention. As Bloomberg reported on Monday...
Bitcoin's ascent has stirred reflection by traditional market participants and fanned speculation of a potential bubble. From Wall Street executives to venture capitalists, observers have weighed in as bitcoin has risen about 45% over the past two weeks. By comparison, it took the S&P 500 Index since February 2014 to achieve a similar increase.
The surge has swept along individual investors. The number of accounts at Coinbase, one of the largest platforms for trading bitcoin and rival ethereum, has almost tripled to 13 million in the past year, according to Bespoke Investment Group.
"The weekend's bitcoin price hike is just the continuation of a long-term bull run on the cryptocurrency, fueled by the tsunami of speculative trading on Japanese exchanges and the entrance of institutional investors across the world," said Thomas Glucksmann, Hong Kong-based head of marketing at cryptocurrency exchange Gatecoin. "It is more likely that the $10,000 psychological stratosphere will push more institutional investors into the mix."
As bitcoin continues to attract more interest from everyday investors, it's also catching the attention of major companies like $15 billion mobile-payment firm Square (SQ).
Square is testing a buy-and-sell feature for bitcoin on its Cash app...
Some Square users recently noticed that they could buy and sell bitcoin directly through the company's Cash app. From a recent article in Fortune...
Square, best known for its technology that allows merchants to process credit card transactions without a cash register or expensive system, says its customers have shown an appetite for the "alt-currency."
"We're always listening to our customers and we've found that they are interested in using the Cash app to buy bitcoin," a company spokesperson said.
"We believe cryptocurrency can greatly impact the ability of individuals to participate in the global financial system and we're excited to learn more here," Square said.
Bitcoin is also beginning to attract the attention of institutional investors...
Exchanges CME Group and CBOE Holdings have both recently announced plans to introduce bitcoin futures as soon as next month. This will lead to more "big money" investors being able to easily buy and sell bitcoin for the first time. As we noted in the October 31 Digest...
Active futures and options markets would also pave the way for the first cryptocurrency exchange-traded funds ("ETFs"). These would make it easy for traditional "mom and pop" investors to speculate on cryptos, too.
In short, these moves suggest it is simply a matter of time before a massive amount of new money floods into these markets. And the results could be downright shocking...
If even a tiny fraction of individual and institutional investor money begins to flow into cryptos, we could easily see the broad market rise another 10 times or more. And should a real speculative mania take hold, the sky is truly the limit.
Even JPMorgan Chase (JPM) – whose CEO, Jamie Dimon, has been a vocal skeptic of bitcoin – is starting to warm up to the idea of investing in cryptocurrencies.
The financial-services giant is reportedly considering offering clients access to CME's new bitcoin product through its futures-brokerage division, according to a recent article in the Wall Street Journal. From the article...
Other banks must also make the call about whether to support CME's bitcoin futures. Goldman Sachs, Bank of America Merrill Lynch, and Morgan Stanley are among the dozens of firms that offer their customers access to CME's markets through their futures-brokerage arms. Morgan Stanley is evaluating whether to provide access to the CME bitcoin contract, a person familiar with the matter said...
[JPMorgan's] looming decision about whether to let customers trade bitcoin futures underscores the challenges that Wall Street firms face as the cryptocurrency emerges from the shadowy margins of the financial markets and draws growing investor interest.
Meanwhile, firms are starting to express interest in creating bitcoin funds...
At least two companies specializing in ETFs – Reality Shares Advisors and Amplify ETF Trust – have filed with the U.S. Securities and Exchange Commission ("SEC") to offer another way to invest in blockchain companies. (As regular Digest readers know, blockchain is the technology that allows cryptocurrency transactions to be recorded securely.) As cryptocurrency-news website CoinDesk reported...
Both companies noted that, due to the early-stage status of the technology, investing in it could prove risky, particularly since there is no regulation surrounding the space and some blockchain-based services may not turn a profit.
The two applications shared several common details, including the stipulation that only companies with market capitalizations greater than $200 million and a six-month daily trading average of at least $1 million would be considered for the fund.
Neither prospectus is complete, and both companies included disclaimers stating that the details of their indices may change.
Porter sees great potential in one particular company that has embraced bitcoin...
Overstock (OSTK) has grown its annual sales by 80% over the last five years, and has enough cash to pay its debts nearly two times over. But as Porter and his team of research analysts recently explained, the online retailer's core business isn't what grabbed their attention.
You see, Overstock was also the first publicly traded company in America to get involved with blockchain. In January 2014, the online retailer began to accept payment in the form of bitcoin. And this past September, Overstock CEO Patrick Byrne announced the creation of a digital-coin exchange that meets both SEC and Financial Industry Regulatory Authority regulations. As they explained to Stansberry's Investment Advisory subscribers in an October special report...
We're interested in its wholly owned subsidiary, Medici Ventures.
Byrne formed Medici in 2014. It's at the forefront of investing in and developing companies that are finding new ways to use blockchain technology.
These technologies don't grab all the headlines like bitcoin and other cryptocurrencies that use blockchain. Most are in the early stages and produce little (or no) revenue so far. But we believe some of these new ideas may eventually revolutionize the financial system.
Porter's analysts visited Overstock headquarters in Utah earlier this summer. While they were out there, they met with Medici Ventures President and Overstock Chairman Jonathan Johnson. Here's what they learned...
Medici currently has an interest in at least a dozen blockchain startups. Johnson said he travels about three weeks per month to look at around 10 deals a week...
But Medici isn't simply investing in these startups... it's also incubating them, as many of them have brilliant ideas but lack the proper resources.
At the time of our visit, Medici had 30 software developers working on the company's startups. Medici "hires out" these developers at cost. So in addition to financial capital, Medici is investing human capital.
Medici focuses on six areas in the emerging blockchain industry: capital markets, money/banking, identity, land/mortgage contracts, voting, and new ideas for the underlying technology.
Medici has stakes in several blockchain-related startups, including t0, a blockchain-based trading platform... Ripio, which aims to provide an alternative to traditional banking in Argentina, Brazil, and Mexico... and Bitt, which is working to form a blockchain-based central bank.
Overstock currently holds more than $403,000 in cryptocurrencies. According to Bloomberg, it keeps about 10% of the bitcoin payments it takes in right now. But it's planning to increase its holdings to 50%.
As bitcoin prices continue to climb, Overstock shares have become a way to bet on bitcoin through the stock market. As of yesterday's close, Porter's subscribers are up 92% in a little more than six weeks.
The rally in bitcoin has been partially fueled by a growing distrust of governments and central-bank manipulation...
More than ever before, people are seeking out nontraditional assets that can't be devalued by the irresponsible actions of central banks around the world.
But regardless of what happens to bitcoin and the cryptocurrency markets, the consequences will be devastating for traditional currencies.
Regular Digest readers know that Porter believes these consequences will come to a head and eventually lead to an all-out "Debt Jubilee."
He foresees a chaotic and potentially violent uprising. We're already seeing the early signs that this financial revolution is underway. The riots in Charlottesville, Virginia and radicalized politics like the alt-right and "Black Lives Matter" movements are pointing to this coming jubilee.
More and more individuals will find themselves suffocating from overwhelming student-loan, auto, and credit-card debts.
As is the case in any crisis, the wealthy will make a fortune. But for many, it will mean huge losses. That's why Porter and his team recently published a presentation explaining how this shocking event is likely to play out... how it will affect you and your money... and most important, a few simple, but crucial steps you can take now to not only survive – but actually prosper – as it unfolds. Watch their free presentation right here.
New 52-week highs (as of 11/28/17): AMETEK (AME), Boeing (BA), Becton Dickinson (BDX), First Trust Nasdaq Cybersecurity Fund (CIBR), CME Group (CME), Cisco (CSCO), WisdomTree SmallCap Dividend Fund (DES), iShares Select Dividend Fund (DVY), iShares MSCI Singapore Capped Fund (EWS), Corning (GLW), iShares Core S&P Small-Cap Fund (IJR), ETFMG Prime Mobile Payments Fund (IPAY), iShares U.S. Home Construction Fund (ITB), McDonald's (MCD), Microsoft (MSFT), PowerShares High Yield Equity Dividend Achievers Portfolio Fund (PEY), iShares MSCI India Small-Cap Fund (SMIN), ProShares Ultra S&P 500 Fund (SSO), Stanley Black & Decker (SWK), ProShares Ultra Financials Fund (UYG), and VF Corporation (VFC).
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Justin Brill and Rebecca McClay
November 29, 2017