Stanford Physicist Finds That Bitcoin Transactions Mirror the Laws of Nature

(ANTIMEDIA) — In the wake of Bitcoin’s meteoric rise in popularity, interest in the dynamics of Bitcoin and other cryptocurrencies has skyrocketed over the past year. With bank-based blockchain projects poised to revolutionize the world of financial services, researchers continue to study the new technology to better understand the inner-workings of the blockchain, as well its economic, social, […]

As Malnourishment Skyrockets in Venezuela, Unique Blockchain Technology Used to Feed Starving Kids

The face of philanthropy and charity is changing thanks to the blockchain. The power to affect positive change in this world is no longer centralized among the few, but spread out among the many.

The post As Malnourishment Skyrockets in Venezuela, Unique Blockchain Technology Used to Feed Starving Kids appeared first on The Free Thought Project.

West Virginia Launching Blockchain-Powered Mobile Voting System

(TIM) — West Virginia is test launching a mobile voting system powered by blockchain technology in its upcoming primary election on May 8th. The system will initially be available only for active-duty military registered voters and their “eligible dependents” in Harrison and Monongalia county. The state is the first in the country to be testing a blockchain-backed voting system for a […]

WATCH: Congressman Accidentally Admits Cryptocurrencies Threaten Govt’s “Control” Over You

In what can be called a Freudian slip, a US congressman accidentally admitted that the government is scared of the blockchain because it makes it harder for them to control you.

The post WATCH: Congressman Accidentally Admits Cryptocurrencies Threaten Govt’s “Control” Over You appeared first on The Free Thought Project.

Massive IBM Announcement Proves Blockchain Has Officially Gone Mainstream

(ANTIMEDIA) —  In January, tech giant IBM was able to happily report to investors that after 22 consecutive quarters — nearly six years — of declining revenue growth, the company saw gains in the last quarter of 2017. In a news release, executives clearly identified the reason for the turnaround at IBM, a century-year-old institution that began as the Computing-Tabulating-Recording Company. […]

JPMorgan & BofA Admit “Disruptive Threat” Of Cryptocurrency To Their Business

This report was originally published by Tyler Durden at Zero Hedge

Having explained why central banks are so nervous about cryptocurrencies, it seems the rest of the banking sector is finally admitting the real driver behind their disdain for digital currencies – they are competition and an existential threat.

As CoinTelegraph’s Molly Jane Zuckerman reports, J.P. Morgan Chase has added a segment on cryptocurrencies to the “Risk Factor” section of their 2017 annual report to the US Securities and Exchange Commission (SEC), filed yesterday, Feb. 27.

The annual report mentions cryptocurrencies under the “Competition” subsection when describing how new competitors have emerged that threaten J.P. Morgan’s operations:

“Both financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies, that require no intermediation.”

The report notes that these new technologies, evidently including Blockchain, although they don’t mention it by name, “could require JPMorgan Chase to spend more to modify or adapt its products to attract and retain clients and customers or to match products and services offered by its competitors, including technology companies.”

This competition could potentially “put downward pressure on prices and fees for JPMorgan Chase’s products and services or may cause JPMorgan Chase to lose market share.”

J.P. Morgan Chase CEO Jamie Dimon had made waves back in September 2017, when he called Bitcoin (BTC) a “fraud” and threatened to fire any employee that traded BTC on company accounts. Since then, Dimon has backtracked slightly, telling a Cointelegraph reporter at the Davos World Economic Forum that he is not a “skeptic” on cryptocurrencies.

In the beginning of February, an alleged internal report from J.P. Morgan Chase referred to cryptocurrencies as “innovative” and “unlikely to disappear”, also noting cryptocurrency’s potential to be successfully applied to payment system areas that are traditionally problematic or slow, such as cross-border payments.

JPMorgan is not alone, as TruthInMedia.com’s Brendan Weber reports, in Bank of America’s new annual report filed with the U.S. Securities and Exchange Commission (SEC), the corporation largely reflected internally about a number of economic, geopolitical, and operational risks faced.

One of those stated risks is surrounding the increased adaptation of cryptocurrencies, which could have negative effects on the corporation’s earning potential.

In addition, technological advances and the growth of e-commerce have made it easier for non-depository institutions to offer products and services that traditionally were banking products, and for financial institutions to compete with technology companies in providing electronic and internet-based financial solutions including electronic securities trading, marketplace lending and payment processing. Further, clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies. Increased competition may negatively affect our earnings by creating pressure to lower prices or credit standards on our products and services requiring additional investment to improve the quality and delivery of our technology and/or reducing our market share, or affecting the willingness of our clients to do business with us.

Increased adaptation of cryptocurrencies also had Bank of America admitting that it may need to make “substantial expenditures” to compete with these rising technologies:

In addition, the widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services as we grow and develop our internet banking and mobile banking channel strategies in addition to remote connectivity solutions.

Bank of America might have already taken action to help counter these technologies by banning cryptocurrency transactions on their credit cards.

Additionally, the document stated concerns besides those directly affecting earning potential; they noted that emerging cryptocurrencies could impact Bank of America’s compliance with anti-money laundering regulations:

In addition to non-U.S. legislation, our international operations are also subject to U.S. legal requirements. For example, our international operations are subject to U.S. laws on foreign corrupt practices, the Office of Foreign Assets Control, know-your-customer requirements and anti-money laundering regulations. Emerging technologies, such as cryptocurrencies, could limit our ability to track the movement of funds. Our ability to comply with these laws is dependent on our ability to improve detection and reporting capabilities and reduce variation in control processes and oversight accountability.

Even though cryptocurrencies were a small mention within the entire report, its brief discussion indicated that the company is both aware of and reacting to the further potential impacts of cryptocurrency.

New Social Network That Pays People to Use It Could Be the Facebook Killer

(ANTIMEDIA) — Facebook’s dwindling popularity is no secret, as users and organizations alike have criticized its ever-changing algorithms and lodged claims of censorship. In light of the most recent algorithmic changes, which have prioritized users’ friends’ posts over posts from public pages, even Facebook has acknowledged a decrease in the amount of time people are spending on the site. Though there is currently no major alternative […]

Here’s Why Banks Hate Cryptocurrencies

This report was originally published by Tyler Durden at Zero Hedge

Banks like to pretend that they’re so much more established and secure than the world of cryptocurrencies, but as anybody who pays close attention to the headlines would know…that’s just not the case…

Setting aside all of their rhetoric about embracing the blockchain, banks have mostly avoided or opposed cryptos (Goldman Sachs, sensing the opportunity for profit, is one notable exception), often citing their volatility and the ease with which they can be used to launder money as qualities that disqualify them from being taken seriously (though, as we recently witnessed with the US dollar, perhaps banks need to rework this volatility argument a bit).  Even yesterday’s announcement of the first criminal charges against a cryptocurrency trader pales in comparison to the many, many crimes that banks (or even one bank) have settled allegations of. The real answer to why the banks’ dislike cryptocurrencies is probably because they feel threatened. The recent selloff notwithstanding, the rise of cryptocurrencies has continued unabated, despite the efforts of some of the most powerful governments on Earth, while the concept is still very young, it does have potential to shake up the aging fiat system. In order to understand the race between the banks and cryptocurrencies, we developed a visual to see just how “David” is comparing to “Goliath.”

Using data from Yahoo Finance and CoinMarketCap.com, HowMuch.com‘s data team developed a visual that compares the market caps between some of the world’s largest banks and the largest cryptocurrencies. On the left blue column, there are four banks listed from largest to smallest market caps: JPMorgan Chase, Bank of China, Goldman Sachs, and Morgan Stanley. Conversely, the right red column features the total cryptocurrency market, Bitcoin, Ethereum, Litecoin, NEO, Ripple, Bitcoin Cash, Cardano, and Stellar. The larger the circle, the bigger the market cap.

Total Crypto Market Exceeds Size Of JPMorgan; Banks Fight Back In Attempt To Slow Growth

After an extraordinarily volatile (even for bitcoin) start to the year, cryptocurrencies are rallying once again, with bitcoin breaking above $10,000. As of Feb. 16, 2018, the crypto market had a market cap of $470 billion – larger than the size of the United States’ largest bank, JPMorgan Chase.

Bitcoin’s market cap alone is comparable to Bank of China’s. The second largest cryptocurrency by market cap, Ethereum, is comparable in size to Morgan Stanley. It is stats like these that have the global banking sector worried that cryptocurrencies are on track to make a serious impact on their operations.

One of the most recent efforts to help slow the pace of crypto growth were announcements from several banks saying that customers could no longer purchase digital currency with their credit cards. Berkshire Hathaway’s Charlie Munger has called Bitcoin “totally asinine” and Warren Buffet has said he would “buy a five-year put on every cryptocurrency.”

Overall, cryptocurrencies are seeing their size and value top even some of the largest financial institutions in the world. This has caused banks to fight back and attempt to slow their growth. However, even banks clearly don’t know what they really want. After JPMorgan CEO Jamie Dimon famously declared Bitcoin a “fraud”, it is interesting to now see a report published by the investment bank that calls Bitcoin-based ETFs the “holy grail for owners and investors.”

And should the bitcoin ETF become a reality, do you really think banks will turn down those lucrative fees?

What do you think?

Jamie Dimon: ‘Cryptocurrencies Will Soon Be Under Government Control’

In the ‘not so shocking’ news of the day, governments want to regulate and control cryptocurrencies. Even Jamie Dimon, the CEO of JP Morgan Chase is saying that very soon, governments will have complete control of all cryptocurrencies.

The cryptocurrency “won’t end well,” Dimon told an investor conference in New York last year, as Bloomberg noted, predicting it will eventually blow up. “It’s a fraud” and “worse than tulip bulbs.” Dimon became the laughing stock of the crypto world when he came out raging against bitcoin and the blockchain.

According to The Free Thought Project, Dimon’s dislike of cryptocurrencies is well known, but he seems to waver a bit here and there on how much he loathes digital currency. On Tuesday, however, he seemed to have changed his mind. During an interview with Fox Business, he left viewers with an ominously cryptic message (pun intended) on how the government will control bitcoin, and said he “regretted” calling bitcoin a “fraud.”

“The blockchain is real. You can have crypto yen and dollars and stuff like that. ICO’s you have to look at individually,” Dimon said in the exclusive interview with FOX Business. However, after he somewhat apologized for slamming bitcoin, Dimon not so subtly hinted that he knows something about the government and how they can grab control of bitcoin. “The bitcoin to me was always what the governments are gonna feel about bitcoin as it gets really big, and I just have a different opinion than other people. I’m not interested that much in the subject at all.”

When asked what he thought about the future of bitcoin during an interview with Fortune, Dimon said, “It doesn’t matter, it’s just not gonna happen,” before claiming that the government will make it illegal and begin jailing people for it. “When the DoJ calls someone up and says that’s an illegal currency and it’s against the laws of the United States and if you do it again—we’re gonna throw you in jail.”

Dimon went on to predict that cryptocurrencies will all be government controlled and if someone uses a currency the government has banned, they will be punished.

“This is troubling. For many reasons,” says Joe Joseph of The Daily Sheeple. “But there’s one in particular that I’m keying in on. And it’s one that you may not have thought about.”

 “I gotta tell you,” Joeseph continues. “Cryptocurrency scares me. Not so much the little guys, but the biggies. The Bitcoin. The Ethereum and whatnot. Because once they get too big, they become targets for the government. Not just because it undermines national currency, which thereby…by default, undermines national security, but because it is an untapped form of revenue, that I believe, the government is gonna come out and seize.”

Maybe that seems unlikely, but in the realm of government, nothing is impossible anymore and we have very few actual human rights left at this point.

The good news is that even if governments try to control one currency, others will rise in its place and as long as this widescale collaboration and coordination among blockchain users exist, decentralized money will win. The money changing bankers have had their go at the helm—and we’ve seen the massive death and destruction facilitated by it—now, it’s time for the rest of humanity to have their turn. –The Free Thought Project

 But in the shadows, lurks the government.  It’s happened before, and it could happen again: the government had the power to take from you what they want, and they can wipe you out!

 

Riding The Blockchain Train: These Companies Changed Their Name, And Their Stock Price Soared

Many others had done it, but nobody quite as blatantly as beverage maker Long Island Iced Tea Corp, which on Thursday became the latest to jump on the cryptocurrency bandwagon, bizarrely but profitably changing its name to Long Blockchain Corp, which sent its shares soaring by 500%.

In an ironic twist, we previewed LTEA"s hilarious "pivot" just one day earlier when - discussing a similar surge in microcap stock Net Element - we said:

Now that it is abundantly clear that for a stock to explode higher, all that is necessary - and sufficient - is a press release mentioning the company"s name and throwing in the word "blockchain" in the same sentence (see Riot Blockchain and LongFin Corp), other public microcaps have decided that if that"s all it takes, then by all means they will gladly take investors" money.

Indeed, as the value of Bitcoin has skyrocketed in recent months, companies previously focused on making fitness apparel, bras, cigars and beverages (and many other unrelated things) have rebranded themselves as virtual currency or blockchain companies of one sort or another. In this light, what Long Island Ice Tea Blockchain did was the culmination of what to many is clear mania beahvior, as many obscure companies have pivoted operations or simply changed their names to cash-in on the cryptocurrency wave, a trend reminiscent of the dotcom boom. As profiled previously, a barrage of companies have seen their shares sky-rocket, largely on words such as “crypto” or “blockchain” in their names.

And investors have cheered them on, pushing their stock prices up, forcing countless microcaps to ride the "Blockchain train"

Artist"s impression of The blockchain train

Courtesy of the NYT, below is a list of companies that have moved into crypto or blockchain businesses, or changed their names. The list also captures the surge in market value since the close on Oct. 11, a day before bitcoin crossed the $5,000 mark.

* * *

BEFORE: Long Island Iced Tea Corp.
AFTER: Long Blockchain Corp.

Long Island Iced Tea made iced teas in flavors including peach and lemon, as well as lemonades. On Thursday, the company, based in Farmingdale, N.Y., said it was shifting its corporate focus to the blockchain.

In the company"s own words:“We view advances in blockchain technology as a once-in-a-generation opportunity, and have made the decision to pivot our business strategy in order to pursue opportunities in this evolving industry.” (December 21)   

* * *

BEFORE: Vapetek Inc.
AFTER: Nodechain Inc.

Vapetek made batteries and liquid for electronic cigarettes. In September, it rolled out a candy flavored e-liquid called Rock Kandi. This month, the Nevada-based company renamed itself and said it would shift to mining virtual currencies.

In the company’s words: “We are confident that cryptocurrency mining and blockchain technology has a large market opportunity in the coming years and we look forward to growing the company and creating shareholder value, while helping to innovate the future of global currency.”  (December 20)       

* * *

BEFORE: Bioptix Inc.
AFTER: Riot Blockchain Inc. 

Bioptix was a pharmaceutical company until this year. In October, the Colorado company said it was changing its name, making an investment in a Canadian virtual currency exchange and creating operations to mine Bitcoin and other virtual currencies. 

The company said that alongside its virtual currency business, it will continue to pursue “products for cattle, equine and swine for the assistance and facilitation of reproduction.” (October 4)   

* * *

BEFORE: On-line PLC
AFTER: On-line Blockchain PLC

On-Line was a small British company that previously incubated internet businesses. This fall, the company said it was renaming itself and shifting to focus on virtual currency technology.

The company said: “Blockchain technology and cryptocurrencies are a new and exciting area we have been working on for some time to provide systems to support the roll out of these technologies across a range of applications.” (October 26)

* * *

BEFORE: Croe Inc.
AFTER: The Crypto Company

To become a public company, The Crypto Company acquired a small existing public company, Croe, which previously developed women’s fitness clothing.

The company said this summer that its “core services include consulting and advising companies regarding investment and trading in the digital asset market and investing in a manner that diversifies exposure to the growing class of digital assets.” (June 9)

After the change, the Securities and Exchange Commission, concerned by the company’s actions, suspended trading of its stock. More such companies are sure to follow.

* * *

BEFORE: Rich Cigars Inc.
AFTER: Intercontinental Technology Inc. 

Rich Cigars previously produced cigars. But the Florida company said this month that it was changing its name, getting out of the cigar business, moving to Colorado and creating  subsidiaries to mine for virtual currencies.

The company said it will be pursuing “the development of a unique cryptocurrency mining business for Bitcoin and other cryptocurrencies which will operate on a 24/7 basis.” (December 14)

* * *

BEFORE: SkyPeople Fruit Juice Inc
AFTER: Future FinTech Group Inc

Formerly SkyPeople Fruit Juice was "engaged in developing agricultural plantations and produces and markets fruit juice concentrates, fruit beverages, and other fruit related products in China and overseas markets.

The company changed its name “to reflect commitment to e-commerce and agricultural commodities trading”.

* * *

BEFORE: 360 Capital Financial
AFTER: 360 Blockchain Inc.

360 Capital Financial provided financial services to companies. In October, the Canadian company announced it would change its name and ticker symbol and begin investing exclusively in blockchain-based companies.

The company said: “We are taking an all-round view to the 360 Blockchain Inc. business plan; with a mission to empower blockchain technologies with capital and experience to create exponential value.” (October 4)

* * *

BEFORE: Leeta Gold Corp.
AFTER: Hive Blockchain Technologies

Leeta Gold was focused on mineral exploration in Canada, though with little apparent success. This summer, the company said it was acquiring a Bitcoin mining company, Genesis, with facilities in Iceland and renaming itself.

According to the company: “This transaction positions HIVE as a leading cryptocurrency miner in an attractive jurisdiction, Iceland, with low energy costs.” (June 14)

* * *

Other companies have been less blatant about their "pivot", and instead changing their name, they acquired or announced expansion plans involving various "blockchain"-linked buzz words.

Digital Power Corp

The power system solutions provider has launched cryptocurrency mining operation.

• Market cap as of Oct. 11: $10.98 mln


• Market cap as of Dec. 21: $97.2 mln

* * *

Marathon Patent Group

Shares in the intellectual property licensing and management company have zoomed after announcing a deal to buy cryptocurrencies miner Global Bit Ventures Inc.

• Market cap as of Oct. 11: $17.8 mln


• Market cap as of Dec. 21: $54.5 mln

* * *

Social Reality

The internet advertising firm in October said it planned an Initial Coin Offering of Blockchain Identification Graph tokens (BIGtokens). Most recently, the firm said it would offer a cryptocurrency dividend.

• Market cap as of Oct. 11: $28.4 mln


• Market cap as of Dec. 21: $52.2 mln

* * *

Nova LifeStyle Inc

The furniture maker launched a blockchain-enabled unit, called “I Design Blockchain Technology Inc” on Wednesday and said it planned to accept bitcoin and other cryptocurrencies on the platform.

• Market cap as of Dec. 19: $60.8 mln


• Market cap as of Dec. 21: $78.6 mln

Source: Reuters, NYT

Yes, Virginia, There Is A "Santa Rally"

Authord by Lance Roberts via RealInvestmentAdvice.com,

Yes, Virgina, There Is A Santa Claus

Every year, at this time, I republish the story of 8-year Virginia O’Hanlon who asked the most important of questions. I encourage you to read it as it reminds us of the importance, meaning and the “Spirit” of the Christmas season. 

*  *  *

Eight-year-old Virginia O’Hanlon wrote a letter to the editor of New York’s Sun, and the quick response was printed as an unsigned editorial Sept. 21, 1897. The work of veteran newsman Francis Pharcellus Church has since become history’s most reprinted newspaper editorial, appearing in part or whole in dozens of languages in books, movies, and other editorials, and on posters and stamps

THE EDITORIAL

DEAR EDITOR:

I am 8 years old.
Some of my little friends say there is no Santa Claus.
Papa says, ‘If you see it in THE SUN it’s so.’
Please tell me the truth; is there a Santa Claus?

VIRGINIA O’HANLON.
115 WEST NINETY-FIFTH STREET.

“VIRGINIA, your little friends are wrong. They have been affected by the skepticism of a skeptical age. They do not believe except they see. They think that nothing can be which is not comprehensible to their little minds. All minds, Virginia, whether they be men’s or children’s, are little. In this great universe of ours, man is a mere insect, an ant, in his intellect, as compared with the boundless world about him, as measured by the intelligence capable of grasping the whole of truth and knowledge.

 

Yes, VIRGINIA, there is a Santa Claus. He exists as certainly as love and generosity and devotion exist, and you know that they abound and give to your life its highest beauty and joy. Alas! how dreary would be the world if there were no Santa Claus? It would be as dreary as if there were no VIRGINIAS. There would be no childlike faith then, no poetry, no romance to make tolerable this existence. We should have no enjoyment, except in sense and sight. The eternal light with which childhood fills the world would be extinguished.

 

Not believe in Santa Claus! You might as well not believe in fairies! You might get your papa to hire men to watch in all the chimneys on Christmas Eve to catch Santa Claus, but even if they did not see Santa Claus coming down, what would that prove? Nobody sees Santa Claus, but that is no sign that there is no Santa Claus. The most real things in the world are those that neither children nor men can see. Did you ever see fairies dancing on the lawn? Of course not, but that’s no proof that they are not there. Nobody can conceive or imagine all the wonders there are unseen and unseeable in the world.

 

You may tear apart the baby’s rattle and see what makes the noise inside, but there is a veil covering the unseen world which not the strongest man, nor even the united strength of all the strongest men that ever lived, could tear apart. Only faith, fancy, poetry, love, romance, can push aside that curtain and view and picture the supernal beauty and glory beyond. Is it all real? Ah, VIRGINIA, in all this world there is nothing else real and abiding.

No Santa Claus! Thank God he lives, and he lives forever. A thousand years from now, Virginia, nay, ten times ten thousand years from now, he will continue to make glad the heart of childhood.”

Merry Christmas, and may this new year bring you joy, laughter, and prosperity.

From all of us at Real Investment Advice, Real Investment News, and Clarity Financial.

*  *  *

Santa Rally?

With the market now back to overbought conditions, it is now or never for the traditional “Santa Rally” between Christmas and New Year’s Day.

If we go back to 1990, the month of December has had average returns of 2.02% with positive returns 81% of the time. Over the past 100 years, those numbers fall slightly to a 1.39% average return with positive returns 73% of the time.

For the month of December, so far, the market has risen 1.33% which is in-line with the historical norm.

As discussed over the last couple of weeks, this is not to be unexpected as portfolio managers and hedge funds “Stuff Their Stockings” of highly visible positions to have them reflected in year-end statements. 

However, come January, it is potentially a different story. As I have been laying out over the last several weeks, the “tax cut” rally may well come to an end as portfolio managers, being reluctant to sell before year-end which would put them under the 2017 tax code, will likely sell in January to lock in gains under the new tax code when they pay taxes in 2019.

While “this time” is never exactly like the “last time,” there is a reasonable precedent that a sell-off in January is a likelihood. With the outside gains this past year, and now extreme overbought conditions as discussed last week, the odds of a correction are high.

This next week, as close to the end of the year as possible, we will likely be adding two positions to portfolios to hedge against a potential “tax gain” related sell off.  The first position will be a short-S&P 500 index combined with an intermediate-duration bond position.

Given that IF a sell-off occurs money will rotate from “risk” to “safety.” In this case, the S&P 500 should fall while bond prices rise as rates head lower. As shown below, with the stock-bond ratio at extremes, this trade is fairly low risk.

(The current stock/bond ratio is at the highest level in history. Also, note that the correlation “broke” in 2013 with QE 3. That gap will likely be filled at some point.)

If I am wrong, and the markets continue to rise, our existing long-positions, which outweigh the hedges by a large percentage, will continue to advance with the hedge only slightly inhibiting performance. If a sell-off does occur, the hedges will mitigate some of the downside risk while we evaluate our next potential moves.

We will keep you apprised of our actions next week.

Dot Com 2.0

by Michael Lebowitz, CFA

On May 20, 1999, eToys.com became a publically traded stock, offering shares to the public at a price of $20 per share. Lurching to $76 per share on the first day of trading and then over $80 a share by mid-August of that same year, investors were blindly optimistic about the prospects for this internet retailer. In early January 2001, after a weaker than expected holiday season, the company laid off half of its staff. By late February, eToys.com stock traded at meager 0.09 cents per share and filed for bankruptcy in March. The bubble had burst on eToys.com and hundreds of other tech companies selling investors on the promise of a new economic paradigm and internet fantasies.

By late 1999, when eToys.com was flourishing, the NASDAQ stock market was in the midst of a ten-year run in which it gained over 2,700%. Valuations, especially those in the tech sector but also in the broader-based markets, rose well above every prior instance. Caution and conservatism were thrown out the window in place of greed and rampant speculation. A decade of impressive market gains resulted in a high level of complacency.

We are now 18 years beyond the tech bubble, and we find ourselves in similar shoes. Most measures of equity valuation are currently higher than just about every other equity market peak including even some from 1999. The market has produced a constant stream of winners seemingly coming in waves over the last few years. Among the more popular is the FANG stocks and their valuations that assume perfection in perpetuity.

Further reminding us of the late 90’s tech bubble and the eToys.com era are Bitcoin and blockchain related stocks. Longfin Corp. (LFIN) for instance, just completed an initial public offering (IPO) at $5 per share on December 13th. On December 18th LFIN announced the purchase of Ziddu Coin a business lender dealing in crypto-currency loans. Following the announcement, the stock rose as high as $136 a share producing a 2620% gain for those investors that sold at the highs. As we pen this note, the stock trades at $41.

Instead of using “dot com,” companies like LFIN, Overstock, Riot Blockchain and other companies are seizing on investor greed by telling a grand story of Bitcoin and blockchain riches. It is, to be sure, the new-new paradigm.

Another recent example is Long Island Iced Tea Corp. which was a purveyor of bottled drinks with a stock price languishing around the $2 range. Well, that is until the company changed its name to Long “Blockchain” Corp. which sent investors into a buying frenzy running the stock price up nearly 500% in one day.

The instances where anything related to Bitcoin and blockchain is instantly deserving of massive valuations is a mirage; here today and gone tomorrow. The current era serves as a gentle reminder of the greed and wild speculation of the latest bubble. In early 2000, the markets topped with no-name (and no-profit) companies capturing the wild hopes of investors. The NASDAQ took over 16 years to re-capture the prior high water mark representing precious years that investors lost.

Whether LFIN and the like are signaling that we are in the bottom of the ninth of the latest bubble or still have a few innings to go is up for debate. What is important, however, is to retell yourself the story of the tech bubble and how investors ignored the glaring signals. Does today’s price action sound familiar? If so we recommend that you continue to remain cognizant of the patterns of prior market bubble episodes and proceed accordingly.

Rules For The Road

If you are long equities in the current market, we continue to recommend following some basic rules of portfolio management.

“It is through following these basic rules that, with the markets overbought, underlying fundamentals stretched, we continue to suggest some portfolio actions be taken to reduce, not eliminate, overall risk.

1. Tighten up stop-loss levels to current support levels for each position.


2. Hedge portfolios against major market declines.


3. Take profits in positions that have been big winners


4. Sell laggards and losers


5. Raise cash and rebalance portfolios to target weightings.

Notice, nothing in there says “sell everything and go to cash.”

As I noted in last week’s missive on the current bubble, our job as investors is pretty simple – protect our investment capital from short-term destruction so we can play the long-term investment game.

In case you missed it, let me repeat for you the most important lines:

Our job as investors is actually quite simple. We must focus on:

• Capital preservation


• A rate of return sufficient to keep pace with the rate of inflation.


• Expectations based on realistic objectives.  (The market does not compound at 8%, 6% or 4%)


• Higher rates of return require an exponential increase in the underlying risk profile.  This tends to not work out well.


• You can replace lost capital – but you can’t replace lost time.  Time is a precious commodity that you cannot afford to waste.


• Portfolios are time-frame specific. If you have a 5-years to retirement but build a portfolio with a 20-year time horizon (taking on more risk) the results will likely be disastrous.

With forward returns likely to be lower and more volatile than what was witnessed in the 80-90’s, the need for a more conservative approach is rising. Controlling risk, reducing emotional investment mistakes and limiting the destruction of investment capital will likely be the real formula for investment success in the decade ahead.

This brings up some very important investment guidelines that I have learned over the last 30 years.

• Investing is not a competition. There are no prizes for winning but there are severe penalties for losing.


• Emotions have no place in investing.You are generally better off doing the opposite of what you “feel” you should be doing.


• The ONLY investments that you can “buy and hold” are those that provide an income stream with a return of principal function.


• Market valuations (except at extremes) are very poor market timing devices.


• Fundamentals and Economics drive long-term investment decisions – “Greed and Fear” drive short-term trading. Knowing what type of investor you are determines the basis of your strategy.


• “Market timing” is impossible– managing exposure to risk is both logical and possible.


• Investment is about discipline and patience. Lacking either one can be destructive to your investment goals.


• There is no value in daily media commentary– turn off the television and save yourself the mental capital.


• Investing is no different than gambling– both are “guesses” about future outcomes based on probabilities.  The winner is the one who knows when to “fold” and when to go “all in”.


• No investment strategy works all the time. The trick is knowing the difference between a bad investment strategy and one that is temporarily out of favor.

As an investment manager, I am neither bullish or bearish. I simply view the world through the lens of statistics and probabilities. My job is to manage the inherent risk to investment capital. If I protect the investment capital in the short term – the long-term capital appreciation will take of itself.

A Review Of The Most Disturbing Events Of 2017

With events like the British vote to leave the EU, the peak of the mass Muslim immigration into Europe, the “surprise” (for some people) upset win of Donald Trump in the U.S. presidential election and the subsequent leftist riots, it may be difficult to top the absolute geopolitical and social mayhem of 2016. However, when examining recent history and ongoing trends, it’s important to understand that these shifts are often cumulative; they tend to build upon each other like sheets of ice on a mountainside, storing up energy for a great avalanche.

We witnessed what I would consider a moderate build up and “avalanche” in the economic world in 2008, and of course this merely set the stage for an evolving form of fiscal collapse for the ten years that followed. This time around though, that ongoing collapse will surface in the form of currency crisis and treasury bond crisis, as well as all the international tensions and conflicts that come with these financial atom bombs. If I was to define the year of 2017 and its place in the grand scheme, I would say it represents the moment that the path became obvious for the next decade, at least for those that have been paying attention.

There have been some incredible revelations this year, things that will change the face of global economics and international relations, but most them have gone unnoticed in the mainstream overall. Here are just a few of the earth shattering events that will lead to unprecedented instability in 2018, probably through to the year 2030.

Coup In Saudi Arabia

I outlined the implications of this powder keg in the Middle East in considerable detail in my articles ‘Lies And Distractions Surrounding The Diminishing Petrodollar’ and ‘Saudi Coup Signals War And Global Economic Reset’. But, I don’t think that the gravity of the situation is being taken seriously by very many people yet.

The rise of prince Mohammed Bin Salman to the status of dictator in the Saudi government is disturbing enough. That said, let’s not forget some of the most important details. For example, Salman’s “Vision For 2030,” which includes the decoupling of the Saudi currency system from the U.S. dollar (perhaps sooner than many predict), thereby killing the petrodollar relationship that has sustained the U.S. economy for decades. And, the fact that Salman has the extensive backing of globalist corporations like The Carlyle Group, Goldman Sachs and Blackrock through his Public Investment Fund (PIF). This indicates a blatant support by international financiers for the eventual death of the dollar’s world reserve status, yet very few people have dared to mention it.

Along with Prince Mohammed’s banker-boosted rise to power, turmoil in the region is inevitable. It is clear that a new large scale war in the Middle East is intended. War rhetoric is heating up by the Saudis against Hezbollah in Lebanon and Iran. War propaganda out of the oil kingdom is becoming laughably overconfident, to say the least. Just take a look at this video widely spread by the Saudi media.

Crisis in Saudi Arabia, just as with crisis in Syria, will change the face of the region forever, and it will have far reaching consequences around the globe as the U.S. dollar’s petro-status is placed on the chopping block.

Russia Pulling Troops Out Of Syria, Leaving Assad Vulnerable

I have been warning for years about the false East/West paradigm and I think the reality of it is finally starting to set in with many liberty activists as behavior on the part of Eastern “saviors” falls right in line with what the globalist banking syndicate desires.

For example, the Asian Infrastructure Investment Bank which so many people claimed was going to “bring down” the establishment power structure is now working directly with the establishment power structure through World Bank and the IMF. China is now the flagship nation for the IMF’s Special Drawing Rights basket system and has openly called for a global currency controlled by none other than the IMF.

In 2017, Goldman Sachs and JP Morgan became the top investment banks in Russia. Rothschild and Co. firms continue to operate in Russia as they have for at least a decade uninterrupted, despite all the nonsense we hear in the activist sphere that Putin “booted out all the bankers.”

This along with a veritable mountain of evidence led me to suggest recently that an invasion of Syria by either Saudi Arabia or their recently revealed ally Israel could be used to draw Iran into conflict. I also suggested that Russia would step aside if the globalists deemed it advantageous. And suddenly, we have Russia announcing that the war on ISIS is over and a “significant portion” of troops will be pulled out over the coming months. This leaves their ally Assad rather vulnerable and makes little sense unless you understand that this is not about Russia, Assad or East versus West. This is about geopolitical theater, and the show must go on. Act three appears to be expanded widespread war in the cradle of civilization, and the Russians are opening the door for this to happen.

North Korean ICBM launch

Tensions with North Korea are going to continue if not explode going into 2018, and the primary reason is the recent ICBM test launch by Pyongyang. One of the mainstream arguments against war in North Korea was that their missile technology was not sufficient enough to pose a threat to the U.S. mainland and that a U.S. military response would be extreme as well as disastrous for everyone involved given the minimal threat North Korea poses. This rationale has now been erased, perhaps conveniently for the neo-con warhawks advising the Trump administration.

North Korea’s missile and nuclear tech has made an astonishing quantum leap in 2017 (It’s almost as if they’ve been getting help…) and their latest ICBM has the capability to strike the Eastern U.S., or almost anywhere else in the world for that matter. So, for American citizens in particular, the threat suddenly becomes more personal. Any major U.S. city could see a quarter of its population vaporized in a flash and another quarter killed by radiation exposure in due course. With images of mushroom clouds dancing in their heads, Americans, who are predominantly tired of war after nearly two decades in the sandbox farce, now have a reason to cheer for yet another one rather than argue against it.

All that is left is a little “push” to motivate the U.S. populace to take that first terrible step into the abyss of an Asian mountain conflict.

China Leaves The Door Open To Regime Change In North Korea

It’s amazing how a few carefully placed words in a major geopolitical statement can leave the door open to considerable calamity. The state-owned Global Times is quoted as saying China will not allow regime change in North Korea by the U.S., but, if North Korea attacks first, then China will remain neutral. This to me is perhaps the most astounding statement made by the Chinese government since they called for a world currency controlled by the IMF.

The message is clear — North Korea is on the table, it is not going away and a false flag or provocation is likely. When this occurs, China has already established that it will not intervene, which means there is no political deterrent. Yes, another example of how the East/West paradigm between governments is as fraudulent as the Left/Right paradigm is between top politicians, but also an extremely disturbing development. This would indicate that a conflict in the region is near at hand, and for those that understand the strategic obstacles in North Korea, at least a decade long quagmire would follow along with millions of civilian deaths.

Federal Reserve Reducing Its Balance Sheet

The final stage of the Fed’s program to pull the rug out from under stock markets has arrived. Interest rates continue to be increased, and I hope liberty activists will finally be able to accept the fact that these hikes will continue and that the Fed does not care about the continued bull market in equities or the continued support of U.S. bonds. The results of Fed tightening are slow, to be sure, but effects have also been obscured for months now by yet another distraction — namely the Trump tax reform bill.

Trump’s bill has been acting as a placebo for markets going into the end of 2017, mostly because the assumption among investors is that corporations will use the profits from tax cuts for continued stock buybacks. For those unaware, it has been stock buybacks fueled by no-interest Fed loans that has allowed for the seemingly endless stock market bull rally the past few years. This is essentially open manipulation of equities by corporations coordinating with the central bank. However, with interest rates rising even marginally, the billions (if not trillions) of dollars required to sustain such a rally are no longer affordable. They must be free in order to be exploited.

The Fed’s balance sheet rise corresponds almost exactly with the explosion in the Dow Jones. If the correlation continues, then it only follows that the Dow will fall as the balance sheet is reduced. Faith in Trump’s bill to prop up stocks is misplaced, and the rally is purely driven by blind assumption. It would take at least a couple of years of tax cycles before tax cuts could be utilized effectively to fund buybacks, and the effect would be nowhere near comparable to that produced by zero cost fed capital.

The Rise Of The Cryptocurrency Psyop

What is interesting and also most suspicious in the sudden “explosion” in cryptocurrencies and blockchain technology like Bitcoin is that the actual market volume and individual trading interest in these digital products is still rather small, yet, the global mainstream media promotion of crypto has been massive; almost unprecedented.  Is perception driving demand?  Is demand driving perception?  Or, is it really that an all out mainstream branding campaign supported by international banks is driving perception and thus artificial demand?  I think the latter option is the most likely given the evidence.

I have written extensively on the “Virtual Economy” being created by globalists using crytpocurrencies as a flagship in my articles ‘The Globalist One World Currency Will Look A Lot Like Bitcoin’ and ‘The Virtual Economy Is The End Of Freedom’.  The extensive establishment interest in crypto and the blockchain certainly refutes the farcical notion that these products are somehow a threat to the international banks.  But beyond this, the rise of cryptocurrencies outlines a rather obvious trend being engineered for the next decade.  Clearly, globalists want a cashless society with zero anonymity for the serf class, and this system is set to launch subversively in the next year.

Crypto is potentially the most disastrous development in 2017, exactly because so many liberty activists see it as as tool for decentralization when it is really a tool for total centralization.  Many are beginning to wake up to the reality that crypto is not what activists thought it was years ago, but is this too little too late?  Crypto means the death of the real decentralized and private economy as humanity begins to abandon localization and person to person transactions for a digitized phantom economy completely dependent on internet based trade under constant surveillance.  If left unchecked, economic independence, localization and individual production will be crushed under the weight of the crypto-psyop, just as sound money was crushed under the weight of the central banking fiat psyop.

When historians look back on 2017, they will say that this year was the beginning of the end of the greatest economic bubble of all time, as well as the beginning of the full-spectrum digital economy and the last vestiges of fiscal independence.

To be sure, there have been many more events this past year with wide ranging implications for the future, but I felt that those listed above would have the largest impact over the longest period of time. 2017 has been a year for subversive foundation building and the lighting of geopolitical fuses. 2018 will likely be a year of actions and consequences.

 

This article first appeared at Alt-Market.com.

If you would like to support the publishing of articles like the one you have just read, visit our donations page here.  We greatly appreciate your patronage.

The post A Review Of The Most Disturbing Events Of 2017 appeared first on The Sleuth Journal.

Cryptocurrency Bank AriseBank To Acquire 100 Year Old FDIC Bank; Partner With BitShares.

Intro by Vince Lanci

via the Soren K. Group at Marketslant.com

The Next Revolution is already Happening

Over the past few weeks, I"ve had the pleasure of meeting the next revolutionaries in the democratization of money. This was while looking to understand better the guts of the blockchain tech and how it differed from crypto to crypto. I had the  pleasure of meeting with and  speaking to several people involved with Bitshares and those  involved  at the  periphery with Arisebank. During that time, by coincidence, Arisebank was in the process of doing the deal described in the headline. And I was able to look through the glass at this event where people were ,to my eye, looking to facilitate the transition from intellectual ideas to applications in reality. That is what Capitalism is in part about. Providing a service that fills a need and makes it easier which  gets you paid. Not making a dollar and being apathetic if the service actually helped someone. Free market capitalism allows for new ideas to make it (or not) on their own merits. That is what I saw. The potential  for self-clearing markets to  reassert themselves and for money to get to where it is needed most without incumbent toll booth operators throttling ideas fortheri own benefit.

I saw people who will make a bundle of money by adding value to a system in need of overhaul. i spoke wit ha few on a guarantee of anonymity. One key person said to me  in response ot me pointed question that blockchain is the beginning, Bitcoin may be the early pioneer, but like the Palm pilot, it was replaced by better tech. Why wed yourself to Blockchain?:

"Look, the tech is evolving, and we are already looking at how Quantum computing will make different types of tech more palatable than blockchain. I agree with you. In a few years at most, something better will come along. And that is a good thing. Because the goal here is to use these new tools to remove the friction in all things that prevents ideas from getting their chance to make it or not on their own merits. If you ( he was addressing me directly here) have an idea that will make a market more efficient and serve the greater good, I want to hear about it. Because now, I can help you get it into "production" much easier because  of what we can  do."

My response was: Sure, I feel intermediaries in general that do not add value need to be removed. Frankly, I feel Precious metals producers"  have been victims of their own ignorance for years. As a result they are captive clients to intermediaries who tell them when to hedge in order to maintain their credit line. Meanwhile those same firms that manage the producer"s banking, LOC, ISDAs, and production hedging are making money not just from those services, but on the prop-side of being able to benefit from the natural sell order flow captive producers provide. This is too much friction from production to user. It"s like a poorly connected pipeline slows waterflow"

His response was simple:

"Exactly. And we are already working with someone who is working on solving that problem right now. You should connect with them. "

And in 24 hours I was involved in a pressure cooker with a couple geniuses having conceptual discussions on how to use the available tech to make more precious metals distribution from producer to end user more efficient. The point is, the man quoted above was all about making  it happen. And it likely will if the people I"m now talking with and learning from get their wish. i hope to be sharing more on this topic soon. Moving on to the event at hand today.

Better Money Needs a Better Banking Model

If money is the life blood of capitalism, then banks are the valves that control the flow of that blood. In this way, traditional banks can sometimes make errors in allocation of investment capital, errors in custodial trust, and due to their centralized “gatekeeper” status have a Fed sponsored franchise that can be a deterrent to efficient, free markets. If you had the time to listen to my podcast yesterday on this topic you can see where I was coming from in light of today"s events.

This is actually why crypto currencies are vulnerable. They are not regarded as money officially, like Gold is not anymore either . They are also in the process of being regulated via futures listing and “crackdowns” to protect us so we are told; also what happened to precious metals. 

There are many of them, and this fragmentation itself has risk that comes with its promise of economic freedom. Many will not make it. And they exist outside the banking network. 

But what happens if a crypto (or all crypto currencies) gets access to the circulatory system itself? What happens when a cryptocurrency, due to Blockchain’s distributed ledger accounting tech, obviates the need for those custodial trustee valves that  exist like manned toll booths when ez pass exist? They unionize in a panic to protect their jobs. That is what happens. And that has begun. 

To digress a second, we actually pay to get access to our money now. Cash Remember the advent of the ATM? It was heralded as a cost reducer for banks and a convenience for the client. Now, it is a profit center where people frequently are charged to get their money. This is basically cash trading at a discount to digital cash. You are paying the bank money to use your money in private transactions . But Quick-Pay, in which they monitor all cash use and collect data from, is free; for now. 

Supply Side Scalability is No Longer a Viable Business Model in a World Without Scarcity. Demand Side"s Network Effect Model Is

Banking’s centralized method of  “service” which at one time was necessary for orderly and counter-party trustworthiness in markets, has either outlived itself or become easily abused in its use. The trust resided in the person who did the  custodial duties.  Their supply side-market structure based on scalability, key to the industrial revolution, is no longer the most efficient. Scarcity is not the problem anymore. Distribution is. And that means another business model applies more efficiently. It is the demand side market structure model based on the network effect. And  to implement that, we need  a better way of mitigating counterparty trust that removes the  human element and bottleneck that comes along with its centralized systems. 

Traditional brick and mortar centralized Banking, like every industry before it, is jeopardized by the most important concept behind the current disruptive technological movement: decentralization. The problem with decentralization for banking until the advent of Crypto and blockchain tech is: it was not compatible with mitigating counterparty risk.  Therefore a centralized authority was needed. Distributed ledger accounting tech removes the need for a central custodial trustee to protect you from counter-party risk. This is what tech geeks say when they refer to a "trustless" transaction. They mean; there is no need for a human to verify the authenticity of the deal. The trust is verified at its DNA level so to speak.

The Bank Teller"s Revenge

When they fired the tellers it was a good thing for everyone but the tellers. What happens when the credit officers are not needed in a few years? What happens when those technologies that banks use to lower costs actually replace their revenue streams like Letters of Credit, banking fees and other overpriced franchises? White collar people get fired, that"s what happens. Credit lawyers alongside operations managers. The corporation will triage every extremity it has to, to continue to perpetuate its own incumbent authority and existence. It could get very weird. Call it the Teller"s Revenge if it plays out as it could.

The replacement is not crypto per-se; it is Crypto , Gold, Fiat, or anything that people agree is money but in a decentralized system where perfect money (whatever that may be) can exist in a perfect banking system. One that does not need to violate privacy to ensure custodial trust anymore.

Centralized Clearing will be less needed like centralized execution was obviated before it by things like Globex.  Electronic trading platforms removed the need for Central Limit Order Books (CLOBberred Clients) in commodities. CLOBs were comprised of resting orders entrusted by clients and handled by their bankers who traded both principle and agency. This was how the Gold , Silver and LiBor Fixes were run, and we now know how that worked out.

Specifically, a decentralized crypto-exchange that operates network across the borders of nation states on combination with decentralized bank with FDIC approval? Globalism without centralization, organically better for all and a remover of walls for the flow of free capital would be possible. Enter Arisebank in partnership with Bitshares..

- Vince Lanci

contact Vince at vlanci@echobay.com

Cryptocurrency Bank AriseBank To Acquire FDIC-Insured Bank; Partners With BitShares.

Written by Michael Taggart at Huffington post

 

Arise Bank offers a myriad of services to consumers looking for a banking alternative. 

 

Dallas, TX —- AriseBank announced that they have reached an agreement with an FDIC insured bank, that has been operating in the United States for over a century, that they will acquire them before the end of the year. This comes on the heels of their record ICO launch, where AriseBank plans to raise one billion dollars, which would end up being a record in the ICO investment space. 

“We are very excited to be at the forefront of history today. We feel like this was going to happen eventually and wanted to get the process started for the industry as a whole. There are certain people who may disagree with this move but, it has to happen eventually. The bank we are acquiring has hundreds of banking partnerships across the world and many certifications and licenses that make sense when it comes to interacting with our decentralized cryptocurrency platform”, said Jared Rice Sr., a co-founder and current CEO of AriseBank. 

 

Arise Bank is the worlds first decentralized bank.

 

With this acquisition, AriseBank, the world’s first decentralized cryptocurrency bank, now has the full financial capabilities of traditional banking coupled with the power and platform of real-time crypto-banking including a global network of ATM’s, debit cards and an AI trading platform. 

“The world’s first federally compliant, decentralized bank invites visionary strategic partners from all countries”, said Eddy Taylor a BitShares partner and a current advisor to AriseBank. “Arise features will include quantum computer-safe operating systems, multi-crypto debit cards, cell to satellite global outreach and much more”, he said. 

Also included in the acquisition is a 25-year old investment bank that Arise plans on converting to a crypto-investment house for consumers around the world. “We plan on growing investor confidence outside of our decentralized platform, which will enable many other outside services in areas like real estate, among many others on a global scale. 

 

Bitshares DEX is the worlds first decentralized cryptocurrency exchange.

 

This acquisition is happening concurrently with the announcement of a strategic partnership with BitShares, the world’s busiest financial blockchain as seen on blocktivity.info. AriseBank, the first decentralized bank is teaming with BitShares, the first decentralized exchange to provide a comprehensive platform for real-time delivery of incorruptible financial products and services. 

BitShares (BTS), with a market cap of $680M, is also a smart coin factory with hundreds of innovative financial products and compliant ICO offerings. It currently holds the record for over one million blockchain transactions per day dwarfing the performance of Bitcoin and all other blockchain networks. BitShares has in turn, teamed with the United Precious Metals Association (UPMA) to bring real-time metal-backed digital currencies into the mainstream. 

 

Gold and Silver can be used as legal tender in many states in the US, and other countries around the world.

 

The combined strengths of a conventional bank + decentralized bank + decentralized exchange + smart coin factory + gold depository + enterprise integrator makes the first full service alternative financial system to offer honest money and a level the playing field for all mankind. 

For more information contact:

Eddy Taylor (310) 940-2404 or visit SovereignHero.com.

John 469-71-ARISE or visit AriseBank.com

"It"s In The Mania Phase": Securities Regulator Warns That "Mortgages Are Being Taken Out To Buy Bitcoin"

As the investing world continues to argue back and forth over whether Bitcoin is an acceptable store of value or nothing more than a massive bubble that has only been rivaled by the Dutch tulip mania of the 1600"s, new information revealed by the President of the North American Securities Administrators Association would tend to lend some credence to the latter.

Appearing on Power Lunch today, Joseph Borg, also director of the Alabama Securities Commission, argued that Bitcoin has clearly entered its "mania phase" with people now taking out home equity loans and cash advances on credit cards to purchase the digital currency in the hopes of getting rich quick.

"We"ve seen mortgages being taken out to buy bitcoin. … People do credit cards, equity lines," said Borg, president of the North American Securities Administrators Association, a voluntary organization devoted to investor protection. Borg is also director of the Alabama Securities Commission.

 

"This is not something a guy who"s making $100,000 a year, who"s got a mortgage and two kids in college ought to be invested in."

 

"You"re on this mania curve. At some point in time there"s got to be a leveling off. Cryptocurrency is here to stay. Blockchain is here to stay. Whether it is bitcoin or not, I don"t know," Borg said in an interview with "Power Lunch."

Of course, as we noted a few months ago, JP Morgan"s Jamie Dimon has has been among the most vocal critics of Bitcoin and has frequently expressed his skepticism that international governments will allow it to survive in any meaningful capacity after someone inevitably "gets killed..."

Speaking to CNBC later in the day, Dimon said he’s skeptical governments will allow a currency to exist without state oversight: “Someone’s going to get killed and then the government’s going to come down,” he said. “You just saw in China, governments like to control their money supply.”

 

“You’re wasting your time with Bitcoin! Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” said Dimon. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”

 

“Blockchain is like any other technology. If it is cheaper, effective, works, and secure, then we are going to use it. The technology will be used, and it could be used to transport currency, but it will be dollars, not bitcoins.”

...perhaps the Americans now levering up their largest asset in the midst of yet another housing bubble, only to turn around and purchase what could very well end up being an even bigger bubble, are the people to whom Dimon was referring???

If You Don"t Own Any Bitcoin, Read This

Authored by Adam Taggart via PeakProsperity.com,

This week it hit $19,000. What"s next?

Wow. Just....wow.

Bitcoin"s price has gone "beyond exponential" this week. Just yesterday, as I started working on this article, it shot up 22% -- from $14,000 to $17,000 (hitting an intraday high of over $19,000).

And that"s after a mind-blowing upwards rocket ride over the past several months. 

I think it"s safe to say that the vicious melt-up in price over such a short timeframe has surpassed the expectations of even the starriest-eyed Bitcoin fanboys.

The whole world, especially the 99.99% of us that own zero cryptocurrency, is asking: What happens next? And, What should I do?

Is this insane trajectory going to continue for a lot longer? Do I need to get in now to avoid missing this once-in-lifetime fortune-making opportunity?

Or is this a classic bubble blow-off top? Is this the deadliest time to enter, right before the price implodes?

An Expert"s Take

I had the chance to ask these questions Wednesday to a long-time veteran in the digital currency space. We met at a gathering of online media "mavens"; this guy has published news and analysis on cryptocurrencies since 2011, for both investors and developers. He knows the space exceedingly well.

Unsurprisingly, he holds a lot of Bitcoin. I didn"t ask directly how much; but knowing that he was covering the space back when Bitcoin traded in the single-dollars range, my conservative mental math quickly concluded he"s probably worth more than most people I"ve met in my life.

So here what I learned during my chat with him:

• He thinks the current price action is "nuts": To his veteran eye, the current frenzy is a speculative mania and will end in a massive sell-off, resulting in huge losses for those buying in at these prices. He"s watched Bitcoin long enough to have seen it experience several 70%+ corrections. In his mind, this will simply be the latest one. And there will be more in the future, he predicts.


• But he"s not worried in the long run: Like many longtime crypto investors, he sees a much higher price potential for Bitcoin. But to reach that level and sustain it will take years. The currency will need to be much more widely held among the general populace and used in a material percentage of transactions (i.e., not just being held by speculative investors). Until then, he expects lots of volatility (both up and down) of the sort we"re seeing now.


• He admits that Bitcoin could lose out to a superior successor: When asked if the capital currently flowing into Bitcoin could flee for a better crypto "mousetrap" in the future, he says "sure". Which is why he has diversified holdings across a number of cryptocurrencies and watches new entrants into the the space closely. But one advantage Bitcoin increasingly has over the rest of the crypto field is scale. He gave a highly-technical argument for how the blockchain actually has limited value without a platform to offer it sufficiently critical scale. "Does Bitcoin offer that critical scale yet?" I asked. "Probably not yet" he answered, "But it"s much closer to it than any other competitor at this time. And it"s growing faster than the rest." Translation: Bitcoin is the odds-on winner at this point.


• He expects the world"s central banks to criminalize the cryptocurrencies: We talked about the central banking cartel"s longstanding monopoly of the money supply and its historic ruthlessness for squashing all competition. He agreed that the central banks would like nothing more than to replace the current cryptos as well as all paper fiat currencies with digital sovereign versions. And he predicts they will likely try to do exactly this. How successful will they be? Uncertain. He can certainly foresee a time when they ban ownership of Bitcoin and its brethren, criminalize transacting with them, and shut down the exchanges. Though while the cartel may be able to seriously curtail Bitcoin et al, he doesn"t see it succeeding in driving them to extinction for several reasons. One he offered that I hadn"t heard before (but have since verified) is that private investors have put a network of satellites up in space dedicated to making it possible to transact in Bitcoin anywhere on Earth even if the terrestrial networks are taken down by the authorities or natural disaster.

His overall takeaway? Don"t buy at today"s prices; wait for a correction (it could be a really big one). But once it happens, buy in and hold, as he sees the price going much, much higher over the next decade.

By the way, I"d share this guy"s name with you but he asked me not to. Given how stratospheric Bitcoin has risen over the past year, he says his biggest priority right now is to fly under the radar and have as few people as possible be aware of his crypto holdings. Apparently this has recently become a real concern for Bitcoin investors who have suddenly become overnight multi-millionaires (Or hundred-millionaires. Or in the case of the Winklevoss twins, even billionaires). A vast windfall like this makes you an alluring target to criminals.

Just one more unexpected consequence of this crypto mania we"re watching play out in real time.

The Peak Prosperity View

The above expert"s views match well with those of our team"s outlook here at PeakProsperity.com.

Charles Hugh Smith, who has been writing about Bitcoin for us since it traded below $600 has long had a price target of $17,000 -- which seemed unattainably high even just one short week ago. That underscores how insane the price moves of the past few days have been.

With the $17,000 milestone hit so quickly, does he think a large correction could ensue? Very possibly. (I should make clear though, he remains quite bullish about Bitcoin"s long-term future potential).

Davefairtex, our resident charting expert, notes that his model now shows Bitcoin"s level of overvaluation at "nosebleed" levels with a daily RSI of over 98 and the forecaster clearly predicting a reversal:

And reader mrees999, our community"s most-respected educator on the cryptocurrency space -- and one of the biggest advocates earlier in the year for buying Bitcoin -- offered the following words of caution yesterday:

I probably wouldn"t get in now. It"s gotten irrational with FOMO. I"m selling into this rally and waiting for a massive correction once the bit shorts come in with the futures trading about to begin.

(Again, I should point out that mrees999 remains robustly optimistic about Bitcoin"s longer-term future price potential.)

To the above, I"ll simply add two additional pieces of data to show how quickly Bitcoin has outstripped any sort of rational justification for its recent price explosion.

The first is this chart below, which shows how Bitcoin"s price has blown above the maximum Fibonacci extension between its previous swing low and yesterday"s swing high (note: this chart was created before the price continued higher to $19,000):

(Source)

And lastly, here"s a table showing the accelerating compression of time it has been taking for Bitcoin to hit each new $1,000 price milestone:

(Source)

That right there, folks, is the madness of crowds. It"s a FOMO-driven mania to make the South Sea Bubble blush.

Advice For Those Who Missed The Rocket Ride

So, if you"ve been feeling like the loser who missed the Bitcoin party bus, you"ve likely done yourself a favor by not buying in over the past few weeks. It is highly, highly likely for the reasons mentioned above that a painful downwards price correction is imminent. One that will end in tears for all the recent FOMO-driven panic buyers.

To that point: as I"m finishing up this article, Bitcoin has retraced back to $15,100. That"s a 21% loss in less than 24 hours for those who bought at yesterday"s $19,000 high. If yesterday indeed proves to have been the blow-off top, that loss could get a lot uglier quickly.

But even if it doesn"t, what can those of us who don"t currently hold any cryptocurrency do as we wait for the dust to settle here?

Here"s our current guidance:

• Open an account with a crypto exchange: While we maintain Bitcoin and many other cryptocurrencies are in a bubble right now, we reiterate our position that they are worth having exposure to in your portfolio -- albeit not at today"s prices. So, while waiting for (possibly much) lower prices after the inevitable blow-off top, you should open an account with a leading crypto exchange (like Coinbase, Kraken, Bitfinex or Bitstamp), so that you"ll be positioned to buy when the insanity is over. These exchanges require a fair amount of personal information that they use in account verification, and some of them take a surprising amount of time and effort to set up before your account is approved and/or funded to transact. So get all of that out of the way now, while your waiting on the sidelines.


• Build cash: We"ve been beating this drum for a while because it"s not just Bitcoin that"s in a bubble. As laid out in previous reports, nearly all financial assets are dangerously over-valued in today"s financial markets. Keep building your cash reserves as "dry powder" to deploy when the next big market correction hits. Chances are likely that at some point in the next 0-2 years, you"ll have the opportunity to buy cryptos, stocks, bonds and real estate at generous fractions of the prices seen today.


• Hold on to your precious metals: Holders of gold and silver have watched Bitcoin"s moon-shot with a lot of understandable envy. This is the kind of massive re-pricing boom they expected the precious metals to experience as world fiat currencies inflate away their purchasing power. Were PM investors wrong? Did they pick the wrong horse in this race? Should they have piled into the cryptocurrencies instead? While it has been a painful five years, we expect precious metals holders will be rewarded in the end. Separate from the current emotion-driven FOMO blitzkreig, the reasons informed investors are buying Bitcoin have heavy overlap with the rationale for owning gold and silver. Capital will return to the PM market as soon as the current nested set of financial bubbles begins bursting. And if you think the jump in Bitcoin has been tremendous as a money tsunami has flooded into this small market, remember that Bitcoin"s market capitalization is now substantially larger than that for all the world"s above-ground silver. How high could we see silver go when that metal become en vogue again?


• Practice emotional resilience: Hey, Bitcoin could still rally higher from here -- much higher. It"s still a small market with a lot of hot money fighting to enter it. How long the mania will last is unknowable -- we could be seeing the end of it right here (Bitcoin"s price dropped below $15,000 as I wrote the last paragraph), or it could still go on for a lot longer than we can imagine. If it does, don"t let the twin devils of fear and greed compel you to be one of the "last fools" to jump in before a correction takes hold (remember: that"s how Isaac Newton lost his fortune in the South Sea bubble). And don"t beat yourself up for not being one of the very few people to make millions from this craze. It"s like being jealous of lottery winners. Instead, focus on the real wealth in your life (hint: it"s much more than the money in your bank account), take time to appreciate what you have, and plan on sustainable ways -- instead of speculative ones -- to increase it. Those looking for some guidance on how to best do this can find our thoughts here.

Don"t Ignore The Revolution

While we"ve made the case that Bitcoin"s current run-up has been "too far, too fast" and a painful correction is highly likely, the new cryptocurrency era is a bona fide revolution. The underlying technology of the blockchain will transform industry and commerce on a similar scale as the Internet has.

While we urge prudence and caution regarding the conditions under which you invest in the cryptos, we don"t recommend you ignore their significance.

Charles Hugh Smith has written several reports for us designed to demystify the digital currency space and help you understand the future value that the blockchain promises to unlock for society.

If you feel you don"t yet have a good grasp on all this, make his report Understanding The Cryptocurrency Boom your mandatory reading over the next few days.

Written just a few short months ago, when Bitcoin was a mere $2,600(!), this publication and its excellent companion report, The Value Drivers Of Cryptocurrency, explain in layman"s terms the real utility value of digital currencies and why a long-term view can justify prices that may ultimately be much higher than where they are today.

Don"t let ignorance or a sour-grapes frustration from missing out on the first big run make you blind to the revolution underway. Whether you participate in it or not, and at what price, is up to you. Just make sure your decisions are well-informed ones.

Click here to read Understanding The Cryptocurrency Boom (free to all readers).