In this article, I want to present to you my take on the future of cryptocurrency.
I will cover what I think will impact the future of cryptocurrency to include …
Institutional Support For Cryptocurrency
The Solidity of Bitcoin
The Impact of Exchange Traded Funds (ETFs)
Junk Coins (aka “Shitcoins”)
I had stated about a year ago (in videos on YouTube, in my cryptocurrency course, and articles on this website) that 90% – 95% of the cryptocurrencies in the Global Marketplace are junk coins or scams. I am still under this opinion.
Smart Money investors should not be holding a large bag of junk coins. Why? Because when the marketplace flushes – and we are seeing a flush right now – these are the first coins to go away. They go down the toilet.
I believe that if you get involved in cryptocurrency, you really have to be smart about it, not greedy about it. How does one be smart?
Firstly, accumulate and hold non-junk coins; that is cryptocurrencies that have solid utility, have use cases for the future, and solve real-world problems. What I consider safe-assets.
Secondly, only involve yourself in smart-projects such as Stellar (a decent borderless decentralized exchange), 0x (a decent decentralized exchange for just about everything), and ZCash (the future of privacy), and Monero (another decentralized privacy cryptocurrency for privacy). (These are all in my portfolio)
Note: JP Morgan is using ZCash technology on its banking platform.
By the way, Bitcoin is the foundation of cryptocurrency and is not going anywhere and will always be king. That is why I hold Bitcoin in my portfolio and accumulate as much of it as I can. I agree wholeheartedly with one of my mentors and visionaries Andreas Antonopoulos about the future of Bitcoin.
What Will I Do? Dump all cryptocurrencies I consider junk coins and accumulate and hold cryptocurrencies that are not junk coins. None of the cryptocurrencies in my Core Portfolio I do not consider junk coins. Most of the cryptocurrencies in my Opportunity Portfolio are not either but a few of them could drop off the radar. I believe most of them could be promoted up into my Core Portfolio.
Note: XRP (Ripple) will be removed from my Opportunity Portfolio and sold. Why? I believe it is a junk coin and will be flushed out.
Institutional Support For Cryptocurrency
Eventually, ETF (Exchange Traded Funds) will be approved by the Securities Exchange Commission (SEC). Permit me to expand on this.
The only purpose of an ETF is to buy an underlying asset such as gold, silver, or Bitcoin on the New York Stock Exchange (NYSE). So, there is an ETF for gold and an ETF for silver. (We await an ETF for Bitcoin).
An ETF is simply a way for people to buy those assets on the NYSE. There are many in the space who do not feel comfortable buying Bitcoin on cryptocurrency exchanges that are either unfamiliar to them. Traditional investors would feel more comfortable buying Bitcoin on a platform that they know and trust, the NYSE. These investors just want to call there Broker and have them buy Bitcoin on their behalf. This is where a Bitcoin ETF comes in.
No other cryptocurrency is being considered as an ETF other than Bitcoin. It is possible – even probable – that other solid cryptocurrencies may be considered as an ETF. But for now, it is Bitcoin. We have to get over the Bitcoin ETF before other cryptocurrencies will be considered as an ETF on the NYSE. That could be a long ways off.
When an ETF is created, it follows a strict set of rules and regulations under the Investment Advisers Act of 1940. So, when a company submits a cryptocurrency for consideration as an ETF, it must pass the test. The SEC must make sure that they know who these companies are and the people behind these companies and that they will be able to strictly adhere to those rules and regulations.
The only people that the SEC has rejected has been the Winklevoss Twins (who have never run an institutional product), a company called Direxion (a company I never heard of and the SEC probably hasn’t either), and a few others.
So basically, the Winklevoss Twins, Direxion, and others were rejected by the SEC because they do not understand or are vested in the Investment Advisers Act of 1940.
However, the SEC has not rejected or accepted VanEck Funds which already run a massive amount of ETFs and VanEck Funds knows the rules and regulations of the Investment Advisors Act of 1940. They are an established company.
The SEC will make a ruling about VanEck Funds by September 30, 2018. Why is the SEC treating VanEck differently than the Winkle Voss Twins and Direxion? Because the Winkle Voss twins are not in the ETF business, they are in the Bitcoin business. Direxion is an unknown. VanEck, on the other hand, is an institutional money manager with over a trillion dollars in management! They have professional and experienced investors who manage ETFs and mutual funds, they have direct contact with the SEC, and they are probably working out all of the details to make sure all of their “I’s” and “T’s” are crossed prior to the September 30, 2018, SEC ruling.
The SEC has been holding back and they are working with those companies who understand the Investment Advisers Act of 1940.
I believe that VanEck will get SEC approval for a Bitcoin ETF.
I believe that VanEck will get SEC approval for a Bitcoin ETF. That is why I am accumulating as much Bitcoin now while the prices are down. I believe we will see a pump in Bitcoin price near or around September 30, 2018, and definitely afterward if VanEck gets SEC approval.
If this unravels in the manner that I think it will, VanEck has to buy Bitcoin if investors buy into that their ETF. Investing 101 – supply and demand – the price of Bitcoin has to go up. Especially if you have these 38 or more billionaires who want a piece of the Bitcoin action and take a position in it.
I am happy that the SEC is taking a methodical approach to ETF approvals. Because once all of the kinks are ironed out and they get it straight and right, then investor confidence builds and massive amounts of money will pour into Bitcoin.
I know that SEC regulation is contrary to the concept of decentralization. But one has to admit, cryptocurrency is getting out of control and people are losing their shirts. I would rather see this type of intervention than to have none at all.
I think it is a good thing.
Cryptocurrency Is Not Going Anywhere
Cryptocurrency will eventually replace paper money. It is the natural evolution of money. At present, there is over 200 billion dollars worth of cryptocurrency in the Global Marketplace that will replace 200 trillion dollars of paper money. That is a huge potential gain in the future for those who see this. Remember, the supply of Bitcoin is fixed so the prices will have to go up.
The key is to get yourself positioned for this inevitable change that is sure to come.
For example, if you were positioned correctly back in the early 2000s in Amazon, Apple, Microsoft, etc you made out like a bandit who robbed Fort Knox.
I believe positioning oneself in Bitcoin and the solid cryptocurrencies I mentioned in this article, you stand a very good chance to come out ahead in the future. Maybe, by end of year.