Month: August 2018

What do a Former US President, Keynote Speech, and Cryptocurrency have in Common? Ripple Labs.

Posted on by Rand Preston

A puzzle involves strategy and seeing a picture of the final result can help you develop that strategy.

In difficult puzzles, there is an indiscernible area of the puzzle that you guess your way through. Maybe a field of grass where the blades are so alike one another that the only way to find the next piece is to find the proper shape of the puzzle piece, rather than looking at the picture.  This is the cryptocurrency world. The picture, however, is not right in front of us, so we are often left to our own reasoning, understanding, and logic.

The players are either known or unknown with a landscape that changes often and internationally. Built on the blockchain, cryptocurrencies are but one use for this technology, and each crypto can have an entirely different use case. Some will rise to the top and be adopted as accepted technology, while others wither away before they even gain a foothold in the marketplace. Others still will come into existence, grow their market share reaping hefty profits, only to crash leaving retail investors wondering how this “get rich quick” scheme didn’t work out.

As an investor, researcher, and investigator, you are watching all players, sifting through news, tweets, whitepapers, and the like. Governments, bankers, investors, and companies are at the table. Even with the seemingly perfect strategy, you may come up short. Researching and connecting dots in this infant asset class while watching new use cases unfold is fascinating. That is why I write about the crypto sphere.

Take for example Ripple Labs. Ripple is a San Francisco based company that founded a very specific niche in the blockchain-cryptocurrency world. They focus on international payment remittances and liquidity for cross-border payments. To make the almost instantaneous liquidity possible (i.e. sending USD to Japan for Yen in a matter of seconds), the dollar converts to a cryptocurrency called XRP, then to Yen, almost immediately. This is ground-breaking in the world of finance and money transfer. The other contender in the payment remittance sphere is IBM, which uses the Stellar (XLM) platform.

Using a cryptocurrency to act as a liquidity solution brings some concerns, such as the price stability of that currency. If trading volatility affects prices, how might that affect the cost of the transaction for the transacting parties? The instant in-and-out speed (about 3 seconds) of using the XRP ledger should quell some level of this concern working to provide real-time gross settlement of payment (RTGS).

Banks and money transfer platforms (Western Union, MoneyGram, etc.) must hold reserve funds  (in Nostro/Vostro Accounts) in order to facilitate these cross-border payments and the time can take days to perform the transactions using the existing system.

Ripple asserts that they are not XRP and if Ripple were to shut its doors forever, XRP will still exist. Think of it like this: Ripple is a company that has designed some of its services to use XRP. I suggest gaining greater insight into Ripple as a company due to their fascinating approach to blockchain technology. I am not suggesting an investment into XRP, but an understanding of Ripple. They have surrounded themselves by very influential people and are a company to watch as the cryptocurrency and blockchain revolution progresses.

Former US President, Bill Clinton will be the keynote speaker for a Ripple event called Swell. Ripple invites well-thought  regulation to the cryptocurrency marketplace. As a matter of fact, Ripple has been very vocal about their intentions to work with regulators. Ripple’s business focus is within a very regulated industry and aims to improve the efficiency of certain banking functions.

Ripple Labs promotes that Swell, “connects the world’s leading experts on policy, payments, and technology for the most provocative dialog in global payments today.” Having former President Clinton, Founder and Board Chair of the Clinton Foundation, shows me a strong effort to bring government regulators to the table.

Best,

Rand

DISCLAIMER: As the domain name of this site suggests, the content of my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions. I hold XRP and XLM.

Cryptocurrency Investing is Surrounded by Powerful Information.

Posted on by Rand Preston

Let’s take a look at the hiring statistics for Coinbase:

Coinbase is arguably the fundamental route for cryptocurrency new-comers to get into the market. That is not to say that other options do not exist, perhaps even better options. Options that may spread more of the cryptocurrency universe at your fingertips or suite your particular style. Remember, Coinbase currently hosts only four currencies so far: Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC).

With the investment world still largely focused on technology firms such as Amazon and Apple, which have tremendous market capitalizations, expansion, and hiring trends, I think it wise to look at the growth of companies and industries surrounding the cryptocurrency market.

The hiring data from Coinbase as it is available on Linkedin.

Coinbase Hiring - Linkedin Stats

Certainly, we can look at this exponential growth as an indicator that this market segment is growing…quickly. In July of 2016, Coinbase employed just under 211. In two years’ time, they have grown at a rate of 170% to a current total of 570 employees.
As an investor looking for cues and educational instruments regarding the growth and stabilizing of an emerging market, employment data of leading companies in the sphere is a good place to start. This is not to say that it is the crystal ball, as we know that companies rise and fall with the times.

Let’s take a look at BlackRock.

This is a July 16, 2018 video clip from an interview with BlackRock’s Chairman and CEO, Larry Fink.

https://www.bloomberg.com/news/videos/2018-07-16/blackrock-s-fink-says-clients-aren-t-looking-to-buy-cryptocurrency-video

After being asked by Bloomberg interviewer Erik Schatzker, Mr. Fink says that none of his clients have expressed any interest in crypto. Meanwhile Schatzker states that Goldman Sachs, JP Morgan, and Morgan Stanley are building out crypto trading desks.
Mr. Fink again states that he has not heard from any clients that they want to be in crypto. You can develop your own conclusion about what he says, but I believe that he may not be showing all of his cards.

The Elephant in the Room: Insurance for Crypto Assets:

Bloomberg published an article recently uncovering the quite side of insurance for cryptocurrency storage. AIG, Chubb, XL, and Aon are a few of the tycoons quietly, and quickly, building their portfolios for insuring the cryptocurrency markets. Read the full article on Bloomberg.

Some quick market research on cryptocurrency topics show that this asset class is quickly becoming an allure to not only the original crew of techies, but to the financial institutions that our economies rely on.

The Final Take:

There is an incredible amount of information and misinformation to be found with regard to cryptocurrencies. From where I stand, I prefer to look at the digital asset’s underlying use case. Where is the news around not only the coin, but the institutions that play a part in making it available? Even then, some digital currencies exist today, that may not exist in the future. Regulators may come down with one fell swoop and knock some (or many) coins/ICOs/tokens out of existence.

If you are reading blogs such as this, you are obviously intrigued with the idea that the cryptocurrency market is ripe for the picking. It is my intrigue with this new asset class that has me writing this blog and providing the insights that I find.

Read. A lot.

I can tell you that with the onslaught of new cryptocurrencies and ICOs (Initial Coin Offerings), there are many bogus attempts to lure people’s money into worthless coin purchases. Look at the structure of the crypto asset and use your reasoning to determine which tokens you want to get into.

CoinMarketCap provides an extensive listing of available coins. Currently, there are 1,656 coins listed and prices range from fractions of a cent to thousands of dollars. However, not each of the coins listed is available through the same platform. In some cases, you need to discover an exchange method for purchasing a specific coin. This could very likely mean buying a token on a platform like Coinbase and exchanging that coin for another coin, which you hold in a wallet. This is a major reason why people are finding it difficult to get in the crypto currency asset pool.

The cryptocurrency market is global, but regulated differently by the country you reside in. You may be able to set up some accounts in one country that you are unable to use in another.

For example, DX.Exchange is an institutional and individual trading platform sitting on NASDAQ’s technology. Though NASDAQ is based in NYC, DX.Exchange is based in Estonia and will be regulated by the Estonia Financial Supervision Authority. The regulatory issues keeps the US usability of this platform at zero, as of now.

Best,

Rand

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions.