“I never considered for one second having anything to do with [bitcoin]… I detested it the moment it was raised. It’s just disgusting. Bitcoin is noxious poison.”
That’s a quote from billionaire vice chairman of Berkshire Hathaway Charlie Munger last winter.
Munger is far from the only bitcoin hater.
A lot of people hate cryptocurrencies… the very idea of them. And they hate them with a passion that’s almost palpable.
We’ve talked a lot about not letting your emotions get in the way when it comes to investing. Unfortunately, this is a problem that’s plaguing a lot of (potential) cryptocurrency investors right now. And it’s preventing them from potentially making big gains.
So if you’re a cryptocurrency hater, here are four things you need to consider before avoiding the space forever…
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1. Wall Street is coming
Soon, no one will remember the exasperating and complicated steps you had to go through to get your hands on cryptos. The idea of “bitcoin wallets” will be as outdated as dial-up modems. Bitcoin will be fully integrated into the financial system.
It will start this year. That’s when a start-up called Bakkt hopes to launch. You might not have heard of Bakkt yet, but you will.
It was started by the organisation that runs the New York Stock Exchange – Intercontinental Exchange (ICE). ICE operates the most important futures markets in the world. It also runs the clearinghouses, which process and verify stock trades between buyers and sellers.
And it’s precisely what the world of crypto has been missing: a trustworthy custody solution… a place where you can buy bitcoin with the click of a button. A place that’s insured, secure and worry-free.
As soon as it launches, massive amounts of money could start flowing through it. For a lot of institutional (or big-money) investors, this will be the first time they can safely and easily buy bitcoin.
And Bakkt is only the beginning.
Asset manager Fidelity, which has US$2.5 trillion under management, is already testing a similar platform with hand-picked investors. And global bank Citigroup is working on crypto investing options. Meanwhile, investment bank Goldman Sachs has partnered with BitGo (a blockchain security company)… and Japanese investment bank Nomura has partnered with Ledger, which makes hardware to protect cryptos.
What we’re witnessing is a technological war between traditional financial institutions. These companies know the crypto industry’s going to be massive. And they’re quietly positioning themselves to take advantage of it.
2. Coinbase adds 25,000-50,000 new users every day
Coinbase, the world’s largest crypto exchange, now has more than 25 million users. And it’s adding 25,000-50,000 new users every day. For comparison, the biggest stock brokerage firm in the U.S. has 21 million brokerage accounts.
(Interestingly, there are only 17.6 million bitcoin in the world, so it’s impossible for all of Coinbase’s users to each hold an entire bitcoin.)
Binance, a crypto-to-crypto exchange based in Malta, has experienced even more dramatic growth. It grew from zero to 10 million users in less than a year.
In short, more and more people are getting involved in the crypto space. I expect that trend to accelerate in 2019.
3. Blockchain is big business
Companies across almost every conceivable industry are investing in blockchain technology (you can learn more about the blockchain here). Auditing firm PwC recently surveyed 600 executives from 15 territories. They found that 84 percent of organizations have at least some involvement with blockchain.
It’s possible, PwC says, that by 2030, 10-20 percent of the global economic infrastructure will run on blockchain-based systems. Global tech research firm Gartner agrees. It forecasts that blockchain will generate some US$175 billion in annual business value by 2025 and US$3 trillion by 2030.
Every year, the business networking and jobs site LinkedIn tracks the top emerging jobs. In 2018, “blockchain developer” was the fastest-growing job. It grew by 33x. Other reports say there are as many as 14 job openings for every blockchain developer in the world.
4. Tokenizing the world
Crypto enthusiasts talk about two different types of internet. First, there’s the internet of information. It’s news articles, big data and social networking – just about everything we use the web for today.
Blockchain, the technology behind bitcoin, has unlocked a second layer for the web: the internet of value.
The internet of value (or more specifically, blockchains) does what its name says: it lets us transfer value across the internet. There is no bank, government or clearinghouse that needs to verify our transactions. And it’s not just money we can transfer.
With the internet of value, you can tokenize just about anything that’s unique: frequent flyer miles, votes in an election, video game “skins” (or suits), intellectual property and more.
One of the first and most obvious candidates for tokenization is the stock market. And we’re already seeing it happen. Two firms recently launched what they call “tokenized securities”.
DX.Exchange’s trading platform lets clients swap crypto tokens that represent stock in 10 different tech stocks, including Tesla, Alphabet, Apple, Baidu and Netflix. Each token is backed 1:1 by the underlying stock. Investors don’t have to buy an entire token, either. That’s important as some of these stocks trade for more than US$1,000 per share.
Currency.com in the European country of Belarus also launched a trading platform for tokenized versions of more than 150 stocks and commodities. And they say their platform could eventually support more than 10,000 different types of tokens.
Tokenized security trading is now live on Currency.com
It’s the first step in a multi-trillion-dollar move toward tokenization, and it’s going to happen whether you love it or hate it.
In short, facts and data might not be as newsworthy as angry soundbites from billionaires, but they show where we’re heading… and that’s toward a world where crypto infiltrates just about every industry on the planet.
Cryptocurrency Analyst, Stansberry Pacific Research
P.S. If you’re ready to give cryptocurrencies a try, it’s urgent that you get in right away. In our recent report, we explain the big event happening soon in cryptocurrencies. It could cause a massive amount of money to flow into the space – and some cryptos could soar 100x. You can get the full story here.