Daily Archives: June 24, 2017

You've seen all the headlines about bitcoin and other cryptocurrencies rising in value. Maybe you want to get in on the game. But how do you even start? We'll show you.

Before you do this, though, you should note that bitcoin isn't universally accepted like regular currency. My colleague Seema Mody published a great video recently where she tried to live a week on the currency, and it wasn't easy. You can use bitcoin online and at some retailers, but for the most part you're still better off just paying with cash or a credit/debit card.

You should also be aware that bitcoin is more like a speculative investment than a regular currency, and can fluctuate wildly in value. Although the overall trend has been up in recent months, but crashes of 20 percent or more in a few days are historically not uncommon.

Still interested? Here's how to get started:

Excerpt from:
How to buy Bitcoin in seconds from your smartphone - CNBC

The teenagers story has captivated America, delighting people with its mix of childhood ambition, entrepreneurial skills and hard work. Mr Finman has been celebrated on news channels, and lauded in the tech community.For his story is little short of remarkable.

The tale began in 2011, when he was 12, and his grandmother gave him $1,000.

Mr Finman, whose parents Paul and Lorna met at Stanford University in the 1980s, when Paul was getting his PhD in electrical engineering and Lorna was getting hers in physics, took the cash and invested it in Bitcoin, following a tip from his brother Scott.

The Finman siblings, three brothers, admit to being fiendishly competitive. Erik describes his family as being the "Elon Musk version of the Kardashians" both his older brothers work in tech and engineering,and the youngest Finman was frustrated by school.

Read more from the original source:
Idaho teenager becomes millionaire by investing $1000 gift in Bitcoin - and wins bet with his parents - Telegraph.co.uk

Younger, tech-savvy people are also more likely to play the digital currency markets and the high risk involved, Sunnarborg said. He estimates that about two-thirds of investors in cryptocurrencies are under age 40.

That same age category is less likely to invest in the stock market. Just one-third of millennials, or adults currently aged 21 to 35, said they owned a stock in a Bankrate study last July. In contrast, 51 percent of Gen Xers, or those age 36 to 51, said they owned a stock, and 48 percent of baby boomers, ages 52 to 70, according to the survey of 1,000 American adults conducted for Bankrate by Princeton Survey Research Associates International.

"The next generation is suffering from the same thing that the Gen Xers suffered in the dot-com bust," Winer said. "They're playing all kind of markets that they know nothing about."

He was referring to the speculative trading that ended in the stock market's plunge in 2000.

Traders and market strategists also worry that a "fear of missing out trade" has helped send U.S. stocks deep into record territory the S&P 500 has posted 24 record closes this year and is up 9 percent over that time.

The difference is this time, typical measures of overexuberance may not apply to stocks.

Bank of America Merrill Lynch's June global fund manager survey found that while a record 44 percent of managers say stocks are overvalued, their cash holdings have actually moved up to 5 percent, higher than the 10-year average of 4.5 percent. There's "no irrational exuberance" in contrast with the 1999 bubble, the note said.

However, sluggish global growth and easy central bank policy could limit investment returns, while people remain wary about stock markets after the financial crisis.

"I do believe that in a market with few attractive alternatives, speculation tends to become rampant," said Daniel Alpert, a founding managing partner at Westwood Capital. "And it almost doesn't matter what people choose to speculate in, as long as they believe there is a fool greater than they out there somewhere."

Originally posted here:
Bitcoin speculators are the new day traders - CNBC

Financial markets are frothier than a millennial's 3-D latte. Investors are scrambling to throw money at Argentina, Vice Media and George Clooney's tequila. Only the crypto-currency craze seems to give us comfort there are worse bubbles out there.

One bitcoin is now worth

$2,677

The latest warning against digital currencies comes from Aberdeen Asset Management's top venture capitalist, Peter Denious. He blames a feeding frenzy of speculation for the explosion in prices and new coins.

"A lot of lessons will be learned and a lot of money will be lost, before a lot of money can be made," he told Bloomberg News. "It's a gold-rush mentality."

Bitcoin Boom

Crypto-currency craze is unsettling people but shows little sign of going into reverse

Source: Bloomberg data for Bitcoin Tracker, an open-end Exchange Traded Note incorporated in Sweden.

Denious is right to say that the market is speculative and unsustainable. Despite recent price wobbles, Bitcoin has almost tripled year-to-date, to $2,677. Its closest rival, Ether, is now worth more than 40 times its end-2016 level of $8.

This isn't because people are using crypto-currencies to buy homes or cars, or because regulators suddenly like them. It's seen as a way to make money.

Another Bubble?

BofA sees S&P 500's market cap relative to nominal GDP hitting all-time highs

Source: Bloomberg

It's hard, though, to separate the crypto craze from worries about regulated public markets and the real economy after a decade of ultra-cheap central-bank cash.

Everything's Fine

Volatility keeps getting crushed

Source: Bloomberg

Talk of a bubble permeates every aspect of today's financial markets. Bank of America research offered up several signs of "Wall Street excess" on Friday:

Bitcoin wasn't mentioned once. That makes it harder for the mud thrown at crypto-currencies to stick. Even Fidelity's CEO and John McAfee are mining bitcoins in this market.

The mind-boggling returns of crypto-currencies also reflect a desire to escape public market bubbles rather than just emulate them.

If bonds are the old world's safe haven, Bitcoin is the millennial generation's apocalypse insurance. Crypto-currencies are marketed as a direct expression of opposition to central-bank and government policy, far more so than gold.

Just as low yields push wealthy investors to take bigger risks -- like buying Argentinian debt -- some people see Bitcoin as an escape from financial repression and instability.

That's why Venezuela, where demand for digital coins is soaring amid triple-digit inflation, currency devaluation and political crisis, has one of the highest potentials for bitcoin adoption in the world, according to the London School of Economics. The other top country is -- you guessed it -- Argentina. Monetary experiments beget technological ones.

This doesn't mean that there are purely rational explanations for the actual price of crypto-currencies today, tomorrow or yesterday. If the bubble bursts, investors will have to lower their expectations as to what Bitcoin and its ilk can actually achieve without rampant speculation and illicit activity.

But the more worrying scenario is that political unease about central bankers and wealth inequality will help to funnel more money into crypto-currencies.

Societe Generale's Albert Edwards reckons citizens are close to turning on "unelected and virtually unaccountable central bankers" after years of economic crisis and stagnation.

Bitcoin's computer scientists don't deserve to be seen as a better alternative. But if the path out of the financial crisis takes a sudden turn for the worse, it may well be too late.

Both bubbles seem too closely connected for comfort.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story: Lionel Laurent in London at llaurent2@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

Read the original:
When the Bitcoin Bubble Bursts - Bloomberg

I continually get news feeds streaming across my computer telling me how other countries are jumping on board with Bitcoin. But, I read in American financial sites that say to stay away from Bitcoin. The fact is, as a medium of exchange, Bitcoin has tremendous value and ability. As an investment class, Bitcoin continues to move higher, latest pauses on the road to $3k. Bitcoin, as an asset class is heading much higher based upon supply and demand. Articles are being printed showing that Bitcoin could eventually print $1 million dollars. While I can see Bitcoin $1 million dollars, I am going to focus on the crypto-currency's move into from four to five digits for now; that is far more easily accessible.

It is very easy for Americans to dismiss Bitcoin. By, and large, Americans think in only one type of currency; The U.S. Dollar. So, when I read articles on major financial website trashing Bitcoin, I have no problem trashing the articles; the disconnect with Bitcoin is more because of a lack of understanding. A perfect example of a country that is not only embracing Bitcoin is Japan. Japanese are embracing Bitcoin at a very rapid pace. Because of this, demand is pushing higher and higher, and so is price. I see this as being continuous. I see Bitcoin pushing past $3k and, in fact, eventually hitting $10,000.00 per coin with an eventual price target of $1 million for Bitcoin. This is the framework of why that is going to happen.

Whenever I sit down with anyone who asks me about Bitcoin, I always show anyone the daily chart from just the past year alone - below. I then tell them they should consider Bitcoin as an alternative and explain the reasons why. I go into the details about limited supply and no central bank as well as what is happening in the economies around the world. Again, Americans have a tough time with this simply because they cannot think outside of the U.S. Dollar box. Most Americans have never even traveled outside of the country; only 8% of Americans traveled outside of the United States in 2016.

Bitcoin is being embraced in Japan at an incredible pace. I have read several articles over the past two weeks alone where Japanese hotels, cash systems and other purveyors are adding Bitcoin into their economy. And, yet, in America, financial websites are warning to stay away from Bitcoin. I took this as a lack of education, if anything.

In Japan, the government has legalized Bitcoin - along with other countries. At the same time, the Bank of Japan is in the process of desperately trying to dilute their currency to create any kind of inflation possible. It is largely not working.

Here is a look at the central bank's "printing press" in action: As stated, their goal is to stimulate the Japanese economy and keep inflation at target, normal levels. They are not succeeding so far. Inflation at 0.4% on a year-over-year basis is not even worth bringing up; It is negligible. My bigger fear is that mountain of printing that the Bank has done.

In the meantime, savvy Japanese investors are scooping up Bitcoin at a rapid pace. Whereas Japanese Bitcoin exchanges were not even really a factor, since the first week of April when the government legalized Bitcoin, the Japanese exchanges are now neck-and-neck with America exchanges. This is just one of many countries where Bitcoin is not just a curiosity but is becoming a way of life and is being integrated into the economy at a rapid pace with 100s of thousands of pay stations and ATMs appearing.

Americans simply do not get Bitcoin and they may very well regret that later. There is a great deal of potential with Bitcoin as an alternative to banking; some 56 million Americans do not even have a bank account. Bitcoin, just like cash, does not have the extensive paperwork criteria like a bank account has. With some 56 million Americans not even having a bank account this is a significant opportunity.

Unlike the charts above showing the Japanese central bank attempting to dilute its currency, Bitcoin has not central bank. Instead, Bitcoin will only ever have 21,000,000 million coins. Because of that, the price of Bitcoin is going to continue to be pushed higher. In fact, unlike fiat currency, Bitcoin appreciates in value. The purchasing power of any fiat currency is always being eroded by a central bank, whereas Bitcoin's potential to continue to move higher. And, although this cartoon is a bit tongue-in-cheek, it is also very accurate: Compared to today, if you had invested $100 in Bitcoin in 2009, you would be worth about $75 million today. And, yet, there are people who trash the idea of Bitcoin simply because they do not understand the currency and what it does.

At the beginning of April, Bitcoin was trading at $900.00. It is now just above $2,650.00 and looks set to test the $3,000.00 level for the third time. That is a simple multiple of 3.5x in two months. If that happens again, even if it takes another 6 months to happen, or even 6 years, Bitcoin will rise to nearly $10,000. That is an impressive gain unmatched by other "stores of value" or asset classes. Whether the currency crosses the $3k level this time, I am not certain. But, I am certain it will push past eventually. It is a matter of when, and not if, given the limited supply and the potential widespread demand.

Bitcoin's limited quantity of coins is set. But, there are 7 billion potential users of the currency. The fundamentals continue to support Bitcoin moving higher and higher as more and more access is available. And, since this currency's track record is that it moves higher and higher, its appeal over fiat currency is gar greater.

I can very easily see a day when Bitcoin pushes past $10,000.00 per coin. And, I can see a day when there is another order of magnitude to the coin's value. Some savvy investors even see $500,000.00 per coin.

Bitcoin works because of the agreement that there is a price for it and its exchangeability for goods and services, or conversion into fiat currency. And, as more and more countries ensure Bitcoin is able to work unhinged, the demands for the currency will continue to move higher. That will push up price. It is an added value to the coin's appeal.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in COIN over the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Read the original:
Embracing Bitcoin - Seeking Alpha