Crypto’s Bounce on Good News

Last night crypto currencies spiked the most since 2017.  At the time of writing BTC was up 12%, ETH up 13%, XRP up 21%, BCH up 9% and LTC up 9%.  The reason isn’t clear though speculation is that it was a combination of news breaking that Bitcoin has been declared Sharia Law compliant (adding 1.8 billion potential investors to the pool), news that global financial heavyweight and previous sceptic George Soros is piling in, and even Russian oligarchs piling in ahead of possible sanction repercussions on Russia.

This also aligns with Fundstrat’s Tom Lee predictions last week that we might see “a massive outflow of cryptocurrency into fiat in the lead up to tax day in the US”.  US Tax lodgement date is 15 April and anyone who took profits at the peak in December may now be up for capital gains tax and could well have put those profits in alternative coins which have been on the downwards journey since that peak.  That ‘tax sell-off’ would now be over.

This $1000 jump last night by Bitcoin comes after crypto markets have been on a sideways trajectory for the last 10 days or and soon after some big news announcements to counter the media fear mongering.

Litecoin Smart Contracts scheduled to be launched on 13 April and as we advised in our report last month Abra will be the first exchange or platform to make use of Litecoin’s new smart contract functionality.  This really is huge news for Litecoin, in essence Litecoin are accepting an exchange (Abra) on their network, while other coins and tokens struggle to be even accepted on exchanges.  

Another promising development is US cloud computing giant Salesforce announcing they were going to start development on a blockchain and cryptocurrency solution for Salesforce.  CEO Marc Benioff confirmed ‘personnel were executing a new offering for the company’s Dreamforce conference later this’.   Not to mention, Salesforce have just recently made public, their plans to acquire business software company MuleSoft for $6.5 billion.  This potential acquisition, which would be their biggest acquisition to date, will further Salesforce’s reach.  MuleSoft’s customers include the likes of Coco-Cola and Barclays.  Couple this in with potential blockchain and cryptocurrency offerings and the realisation of mass adoption could be closer than we think.

Coinbase has announced they are launching a new incubator fund for early-stage start ups.  As reported by CNBC, Asiff Hirji, Coinbase President and Chief Operating Officer said, ‘we’re going to invest off our balance sheet into crypto companies’.  Such developments indicate a strong belief in the crypto ecosystem as a whole.

China has also joined the ‘crypto big announcement’ party with the $1.6 billion Blockchain Innovation Fund announced during the opening of the Hanzhou Blockchain Industrial Park in China.  Reports indicate that the project is partially government funded.  This news appears to be a backflip for China, with various crypto related activities having been banned in the last 6 months or so such as ICO’s, exchange like services in January and foreign exchanges in February.  

Max Keiser, Wall Street Veteran and host of the Keiser Report is also still very much bullish on BTC with the market correction we have seen for most of the 2018 not changing his views.  ‘My view of the world-shaking tech that Bitcoin is has not changed’. – Max Keiser.

Keiser believes that Bitcoin fulfils Aristotle’s 4 conditions of money nicely – durable; portable; divisible or fungible; and has intrinsic value -  as does Gold (which he calls the perfect form of money).

In a recent interview Max was asked if “hodling” was the new “saving’ and is it a worthwhile economic activity given it goes against the Keynesian notion of spending to grow the economy.  Max reiterated what he has said on the Keiser Report many times:-

‘You can’t have Capitalism without capital.  And you can’t have capital without savers, and you can’t have savers without an incentive to save”.

New tech never takes the world by storm overnight.  Patience is ultimately the key to successful investing.