Big News for Bitcoin
Big news for bitcoin... This could be a game changer for the entire cryptocurrency market... Big tech is booming again... Don't miss Sjug's special 'Melt Up' Q&A...
There is no denying it...
Bitcoin and other cryptocurrencies are "frothy" today.
Suddenly, "cryptos" are all over the financial media. Big-name investors and celebrities like billionaire Mark Cuban, boxer Floyd Mayweather, and even socialite Paris Hilton are now endorsing initial coin offerings, or "ICOs." And folks who had no interest in the space a few months ago are now asking us how (and what) to buy.
Longtime Digest readers know we're contrarians at heart. Like our colleague Steve Sjuggerud, we prefer to buy assets that are cheap and out of favor. Typically, a situation like this would cause us to run the other direction.
But there is one big reason to believe significantly higher prices are likely...
Despite the big run-up in prices so far... and despite the clear signs of excessive bullishness in cryptos... most investors still don't own any.
This includes both individuals – the vast majority of whom still don't even know what a cryptocurrency is – as well as big institutional investors. The latter are particularly important...
These folks control trillions of dollars of investment capital. And if you joined us for our first-ever cryptocurrency webinar earlier this month, you heard our colleague Tama Churchouse explain that many of these folks are familiar with cryptos. They've seen the gains. And they would love to have some exposure.
But the reality is virtually none of them do.
This is because cryptocurrency markets are still too illiquid for "big money." More important, they don't meet the strict regulatory compliance rules that many of these firms are required to follow.
However, this could soon be changing...
Back in July, the U.S. Commodity Futures Trading Commission granted one small firm the first license to clear and settle cryptocurrency options and derivatives contracts.
And earlier this month, this company – LedgerX – quietly opened for business. As Bloomberg reported...
About 20 institutional investors – including investment banks, asset managers, hedge funds and proprietary-trading shops – executed bitcoin forward and option trades at narrow spreads and without difficulty.
These early trades were largely tests, with only about $1 million worth of contracts traded.
But this sort of "clearing house" – using standardized settlement, information security, and legal compliance practices – is a necessary step before cryptocurrencies can be considered as a legitimate asset class for institutional funds. More from Bloomberg...
If acquiring and holding cryptocurrencies becomes easier for institutions we can expect to see more passive investment, which in turn could lead to higher and more stable prices. But LedgerX has the potential to do far more. It could attract traders hoping to profit on the volatility of cryptocurrencies, offering liquid markets, secure clearing, a menu of options and – most important – physical settlement. That could bring cryptocurrencies squarely into the conventional financial system.
And LedgerX isn't alone...
In August, the Chicago Board Options Exchange – the largest options exchange in the U.S. – said its CBOE Futures Exchange plans to offer cash-settled bitcoin futures by early 2018.
And just this morning, the world's largest futures exchange – CME Group – joined the fray. As financial-news network CNBC reported...
CME announced Tuesday it plans to launch bitcoin futures in the fourth quarter, pending regulatory review. Bitcoin rose to a record high above $6,400 Tuesday morning after the announcement...
"Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract," Terry Duffy, CME Group chairman and CEO, said in a statement.
These moves will allow 'big money' investors to easily buy bitcoin for the first time...
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.
Today, the total market value of bitcoin is about $105 billion, while the entire cryptocurrency market is valued at just over $180 billion.
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.
Again, if you're interested in speculating on cryptocurrencies, you must be careful...
The upside potential is massive... But you could lose every penny you put in them. This means you must follow strict position-sizing limits, and you must know what you're doing.
If you're interested in learning more, we urge you to take a look at Tama's brand-new Crypto Capital advisory. Unfortunately, it's too late to lock in your introductory discount to this service. But it's not too late to take advantage of Tama's 100% risk-free guarantee to try it for yourself. Click here for the details.
Elsewhere in the market, 'big tech' is booming again...
Yesterday, we noted the blowout quarter by online-retail behemoth Amazon (AMZN). But it wasn't alone... Two other tech giants recently released stellar third-quarter earnings, too. As the Wall Street Journal reported last week...
Three of the world's biggest companies – Google parent Alphabet, Amazon, and Microsoft – reported booming quarterly growth, extending their reach in industries from advertising to retail to business software as they drive the economy's technological transformation...
Shares in three tech giants jumped in after-hours trading, adding a combined $80 billion in market value in the first hour or so after results were announced. Alphabet and Amazon's stocks both surged past the $1,000 mark and approached all-time highs.
This is great news for shareholders...
And it's a bullish sign for the broad market, too. After faltering earlier this summer, booming tech stocks are leading the market higher once again. And the S&P 500 Information Technology Sector Index just closed at a fresh all-time high on Monday.
The "Melt Up" rolls on.
Speaking of the Melt Up...
As regular readers know, we shared some big news from our colleague Steve Sjuggerud last month. As we wrote in the September 28 Digest, live from our Stansberry Las Vegas conference...
Steve promised to reveal big news about his "Melt Up" thesis, and he did not disappoint...
Sjug reviewed his thesis to date, including an update on several of the market's "vital signs" he has been tracking... He also introduced two new indicators that have predicted practically every major stock market top in history.
Steve noted that all of these indicators continue to give the "all clear" today. In fact, small caps, financials, and the Dow Transports each broke out to fresh all-time highs yesterday. This is an incredibly bullish sign.
And while it wouldn't be fair to conference attendees to share all the details yet, we can tell you that Steve's latest research suggests the Melt Up will continue even longer than he originally believed. And this means the gains could be even bigger, too.
If you weren't able to join us in Vegas this year, we have good news...
Because Steve knows so many readers have been following his Melt Up thesis, he's hosting a live briefing this week to share all the details on his latest research. Better yet, he's planning an extended Q&A session to address all your questions and concerns.
It kicks off this Thursday, November 2, at 2 p.m. Eastern time. And it's absolutely free for all interested Stansberry Research subscribers. Click here to reserve your spot and submit your questions in advance.
New 52-week highs (as of 10/30/17): Apple (AAPL), Amazon (AMZN), Eaton Vance Enhanced Equity Income Fund (EOI), Facebook (FB), Microsoft (MSFT), Nvidia (NVDA), ProShares Ultra Technology Fund (ROM), Sabine Royalty Trust (SBR), iShares MSCI India Small-Cap Fund (SMIN), short position in GGP (GGP), and short position in the Interpublic Group of Companies (IPG).
In today's mailbag, kudos for Stansberry Investor Hour... more on our latest Friday Digest... and a note from a longtime Stansberry Alliance subscriber. As always, send your questions, comments, and concerns to feedback@stansberryresearch.com.
"Hello Porter and Buck, I want to thank you for the work you are doing on the Stansberry Investor Hour Podcast. It has rapidly become my favorite podcast and there are about seven shows I regularly tune in to ranging from general financial news to bitcoin to precious metals. The two of you come across as genuinely having a great time and the shows are informative and fun to listen to. Thank you for improving my drive time financial education and entertainment simultaneously." – Paid-up Stansberry Alliance member Marcus Romanowski
"Spot on rationale why folks are at the end of their rope! It helps the politicians that a politicized press keeps everyone distracted. So, what is your over/under in terms of time when the SHTF?" – Paid-up subscriber Mike Obley
Brill comment: It's anyone's guess, but we suspect the real trouble will begin when the next credit-default cycle ramps up. Remember, interest rates (and therefore debt-servicing costs) remain near record lows today. As defaults begin to mount and interest rates move higher, these problems will escalate quickly.
"When I read the Digest each evening, I find it interesting to see subscribers talk about how their Alliance membership was paid for with one great trade. It certainly makes me smile, but let me give you an example of how being an Alliance member can give you something that is far more valuable than a hot stock.
"Imagine being invited to an Alliance event where Porter takes the stage, and for close to 2 hours, answers questions on everything from finance to politics. From personal investments to what the future holds. Would you like to know what asset class Porter recently made the largest purchase of his life? Would you like to know what stocks he personally invests in because he believes they will still be around in 20 or 30 years? Would you like to know what Porter is doing today to ensure his children are financially positioned to be successful when they are his age? How about the best book he has ever read? The best issue of his Stansberry's Investment Advisory newsletter he has ever written?
"What price would you put on have unrestricted access to THAT information? What value can you place on being able to ask a successful millionaire what he is doing with his own wealth, and more importantly, why he is doing it. What does he see that most of us don't? While profiting on a stock can be rewarding, knowledge can be life changing, and last [week], [Porter] gave Alliance members in the New York area VIP access to insights normally reserved for closed door sessions. Listening to [Porter] discuss how broken our economy is, what caused it, and what cataclysmic event could throw this country into utter chaos, was mind bending and worth every penny of an Alliance subscription. Being invited to sit in the room was pure gold. Being able to ask questions was priceless. How do you NOT charge for this, was all I kept thinking.
"So, the next time someone asks, 'Is an Alliance membership worth it?' remember the value of what's not listed on the NYSE or the NASDAQ. For me, having access to moments like [this] and the Alliance Conference, is what makes the difference. Listening to people smarter than me, and engaging with subscribers who are wiser than me. That's the power of learning. Thanks Porter." – Paid-up Stansberry Alliance member Mark T.
Regards,
Justin Brill
Baltimore, Maryland
October 31, 2017