Monday, June 14, 2021

Will ICOs Take Down Wall Street The Way Bitcoin May Take Down Central Banks and Fiat Currencies?

by Jeff Berwick, The Dollar Vigilante:

I’ve said it many times in the past. Blockchain technology is the biggest evolution since the internet.

We’ve seen bitcoin quickly become a challenge to fiat currencies and central banks.

We’ve seen Ethereum change the very nature of apps into dapps or decentralized apps. And, it’s barely even begun yet.

And now we are seeing ICOs, Initial Coin Offerings, change how companies are formed and funded.

ICOs, similar to bitcoin, threaten entire industries.

It threatens the traditional investment banking industry… could that be why Jamie Demon hates it so much? Ya think? Over $3 billion has been raised by ICOs in the second quarter of 2017 surpassing the total funds raised via traditional equity financing for the first time.

It threatens the traditional stock exchanges.

And it certainly threatens the government regulators.

And the businesses that are being built with the ability for their tokens to be tradeable without third parties will threaten almost every other traditional business sector in the world.

To say all of this is a massive paradigm shift is an understatement.

ICOs have proliferated in the last year and, so far, on average, they have performed very well for investors.

ICOs remove the stranglehold on investment capital that has been monopolized by the big investment banks and made prohibitively expensive and restrictive by criminal government regulators.

The Chinese government has, as we’ve seen, been one of the first to, as Christine Lagarde puts it, “banned the initial, um, offer of, um, bitcoins.”

And, I have zero doubt that the criminal SEC will soon violently attack those who peacefully and voluntarily participate in the ICO market.

But, like with bitcoin, they can’t stop it. They can only do what all governments do; threaten violence and extort people who try to make the world a better place.

So, there will definitely be a lot of bumps along the road… the same as there will be for bitcoin… as governments and central banks try to stop progress from occurring.

And, there will be plenty of failures, scams, and drama as always occurs in the free market.

But, there will also be investment opportunities potentially of a lifetime.

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Russia starts working on Blockchain standardization

by BNE Intellinews:

Russia’s Federal Agency for Technical Regulation and Metrology (Rosstandart) appointed a new technical committee to work on the standardization of “the software and hardware of distributed register and Blockchain technologies”, East-West Digital reported.

“The standardization of Blockchain will allow these technologies to develop at a new level,” expects the agency, acknowledging that Blockchain technology is “actively spreading” across Russia.

Blockchain technology will develop through “internationally-agreed methods, more intense international cooperation, social adoption, new usages and, finally, increased trust in such operations,” believes Rosstandart.

The agency specifically refers to several technical committees formed under the auspices of the International Standardisation Organisation (ISO) — in particular, the TC 307, which gathers 35 ISO member nations to agree standards in Blockchain and distributed ledger technologies.

Earlier this month, a consortium of Russia’s biggest banks announced that it had developed a distributed ledger to make payment safer and faster. Dubbed ‘Masterchain,’ the new ledger uses a modified ethereum protocol while complying with national security standards.

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How High Can It Go? Bitcoin Shocks The World By Crossing The $7000 Mark Less Than 1 Month After It Sold For $5000


by Michael Snyder, The Economic Collapse Blog:

Less than a month ago, Bitcoin was selling for less than $5000, but now it has smashed through the $7000 mark with seemingly no end in sight.  At this point Bitcoin has a total market cap of more than 100 billion dollars, and some analysts are suggesting that it could eventually go as high as a trillion dollars.  Cryptocurrencies overall are up an astounding 640 percent so far in 2017, and personally I regret not investing when Bitcoin was still in the very early stages.  I always thought that governments would eventually crack down and regulate cryptocurrencies out of existence, and that still may happen someday, but it hasn’t happened yet.

One of the great things about Bitcoin is that it represents a medium of exchange that is not controlled by the central bankers.  So when you use Bitcoin you are choosing to become less dependent on a system that is designed to financially dominate the entire planet.  Any way that we can become more independent is a good thing, and so I greatly applaud the use of cryptocurrencies.

But there are those that are warning that a major bubble is forming and that extreme downward price action will be coming at some point.  Needless to say, the upward momentum that we are witnessing at the moment is certainly not sustainable indefinitely.  The following comes from Breitbart

The price of Bitcoin smashed another record early Thursday morning — $7,000 for each unit of the digital currency.

As of 7 AM Eastern time, BTC is selling for $7,191.16, according to data from Coinbase. Bitcoin — which is minted by a decentralized network of miners, not a governing body — hit this latest benchmark with a single-day increase of nearly $640, only 13 days after it first became valued at $6,000. If an individual bought 1 BTC exactly one month ago, it has grown $2,902.33 or +67.67{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in value.

Anything that goes up that fast is eventually going to come down, and those that invest at $7,000 could end up seeing the price fall back several thousand dollars.  Or, the euphoria surrounding Bitcoin cold propel it through the $10,000 mark and make all of the skeptics look like idiots.

We just don’t know, and that is part of the charm of Bitcoin.

And according to Bloomberg, soon investors will be able to trade Bitcoin futures…

The digital currency got new impetus this week after CME Group Inc., the world’s largest exchange owner, said it plans to introduce bitcoin futures by the end of the year, citing pent-up demand from clients. Skeptics including Themis Trading say the rally is evidence that the software-created asset is a bubble that should not be given regulatory cover.

Of course Bitcoin is not the only major cryptocurrency that is out there.  In fact, there are rumblings that Amazon is about to start promoting Bitcoin’s chief competitor

Ethereum, the top digital currency behind Bitcoin, has plunged in price as Bitcoin enjoys its massive surge, falling from a 24-hour high of $301.41 to $277.82 Thursday morning.

However, this Tuesday, Amazon bought the domain, and, fueling speculation that it may get into the action on decentralized digital currencies. Ethereum is not just a currency like Bitcoin but an app development platform — the Windows or OSX of blockchain. The domain purchase could be a sign that Amazon may join the Enterprise Ethereum Alliance — a group of large companies, including JP Morgan and Microsoft, putting their weight behind blockchain tech.

If Ethereum ultimately becomes the dominant cryptocurrency in the marketplace, what would that do to Bitcoin?

Or could it be possible that there is room enough for both of them?

The truth is that we don’t know what the future will hold.  Cryptocurrencies have never existed before, and there are so many variables at play.  The biggest variable is how national governments will respond to these alternate currencies, and I still believe that they will eventually make a move to heavily regulate them.

And unlike gold and silver, these cryptocurrencies do not have any intrinsic value.  The only reason that they have any value at all is because people believe they have value.  But for the moment the number of believers continues to rise, and this may be a factor in why the price of gold is relatively low right now.  This is something that Ron Paul commented on recently

“Does it represent real money to you?” Cambone further asked the former presidential candidate.

“Not to me, no, it doesn’t,” Paul answered. “But if it serves the voluntary exchanges of people, and serves the purpose of exchanging wealth, … it could act as if it were money ….” he stated.

“Some say Bitcoin is stealing the thunder away from gold,” Cambone continued, “and that’s one of the reasons the yellow metal is not rallying further. Do you agree with this?”

“I think that’s a very strong possibility,” he considered. “I am amazed,” he laughed, “at all the capitalization on these cryptocurrencies. It’s a huge amount of money,” Paul emphasized.

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My Crazy $17,000 Target for Bitcoin Is Looking Less Crazy

by Charles Hugh Smith, Of Two Minds:

The basis of this admittedly crazy forecast was simple: capital flows.

I think we can all agree that bitcoin (BTC) is “interesting.” One of the primary reason that bitcoin (and cryptocurrency in general) is interesting is that nobody knows what will happen going forward.

Unknowns and big swings up and down are characteristics of open markets.It’s impossible to forecast bitcoin’s future price because virtually all the future inputs are unknown.

We’ve lived so long with managed markets that only loft higher that we’ve forgotten that unmanaged markets are volatile and full of unknowns. We’ve forgotten that markets are reflections of all sorts of things, from human emotions to herd behavior to changes in the underlying Mode of Production, i.e. how stuff gets done, made, distributed and paid for.

Last May, when bitcoin was around $580, I distributed a back-of-the-envelope forecast of $17,000 per bitcoin to my subscribers and patrons ($5/month or $50 annually). (In June, I presented the case to subscribers of, where I’m a contributing writer.)

The basis of this admittedly crazy forecast was simple: capital flows. There is around $300 trillion in financial “wealth” sloshing around the global economy, and another $200 trillion in real estate. (The sum of financial wealth is now much higher, due to the extraordinary gains in global markets.) I reckoned that if a tiny slice of that financial wealth flowed into bitcoin–1/10th of 1%– the inflow of capital would push bitcoin to around $17,000 per coin.

If 1% of all that wealth sloshing around looking for yield and safety decided to find a home in bitcoin, the forecasted price was an insane $170,000.

Compared to this, $17,000 per BTC looked almost conservative. But since bitcoin was under $600 at the time, $17,000 looked pretty darn crazy. But the math looked compelling to me: $300 trillion in mostly mobile capital sloshing around an inherently unstable system, and little old bitcoin was worth a meager $9 billion. Given that the total number of bitcoin was limited to 21 million, it didn’t seem much of a stretch to imagine a tiny sliver of all that capital flowing into BTC.

I heard many reasons why my scenario didn’t hold water. Fair enough: the future is unknown, I could have been completely wrong, and BTC could have dropped back to $60 or $6.

I repeated my analysis to my subscribers and patrons in December 2016, when BTC had reached $900.

So now we know bitcoin didn’t go to $60, or zero; it has climbed to $9,500 or so, a bit over halfway to my rough and unsophisticated back-of-the-envelope forecast of $17,000. Could BTC suddenly drop to $7,000? Of course it could; given its history, we should expect dizzying declines of up to 30% or more.

The interesting thing to me is that nobody knows what will happen going forward. Not knowing is refreshing. So is the opportunity to be right or wrong. This is what investing is supposed to be about.

There are all sorts of scenarios out there. Some will be right, some will be wrong, some will be half-right, and in all likelihood, stuff will happen that nobody predicted.

Here is a chart prepared by Tuur Demeester way back in 2013. It’s interesting because nobody has a crystal ball, so we’re all guessing based on what we expect to happen and what we see as the primary dynamics in play.

For what it’s worth, here are my notes to subscribers/patrons from last May/June. To me, this was more or less stating what I took to be obvious. As for all the quibbles about centralization and decentralization: yes, yes, yes and yes–I realize fiat currency issued by banks has certain features of decentralization and that bitcoin is vulnerable to the dominance of (or manipulation by) self-serving players. But the question boils down to: what matters most going forward?

Musings Report #21 5-21-16 (emailed to subscribers/major patrons)

Unlike precious metals, crypto-currencies are easy mediums of exchange: you can send or receive bitcoin as easily as you send or receive dollars with PayPal, Dwolla or similar services. The great problem going forward for many people will be transferring their remaining financial wealth out of depreciating currencies in their homeland to some other currency in another more stable country.

When governments clamp down on bank transfers and impose other capital controls, this will become increasingly difficult in conventional channels. Should demand for bitcoin rise, the price will skyrocket. Right now all 17+ million bitcoin in existence are worth about $8 billion–a drop in the bucket of the world economy’s $200+ trillion in financial assets and a tiny sliver of gold’s global $7 trillion valuation.  It would take very little to push bitcoin’s valuation to $80 billion, and this would still be a very thin slice of total financial assets.

Musings Report #22 5-28-16 (emailed to subscribers/major patrons)

The primary reason to follow crypto-currencies such as bitcoin and Ethereum’s ether currency is that they are outside the control of the self-serving exploitive elites that control the credit money issued by central banks and states.

Crypto-currencies are revolutionary because they are independent of central banks and an easy medium of exchange. Gold and silver are independent forms of money, but other than silver coins, the precious metals don’t lend themselves to acting as mediums of exchange in an increasingly digital world.

The key point here is the current financial system is highly centralized, while crypto-currencies are decentralized. Should a government decide to recapitalize bank losses with a bail-in, i.e. expropriating depositors’ money to cover banks’ losses, as was done in Cyprus, the depositors have no recourse: the state sends the order to the banks and the depositors’ accounts are legally robbed.

While some people believe the government will be able to outlaw the use of crypto-currencies, or expropriate bitcoin just like it does with regular bank accounts, the decentralized nature of crypto-currencies makes this more difficult than in a system dominated by five Too Big To Fail banks and a central bank.

Another reason to follow the growth of blockchain applications (the technology underpinning bitcoin) is that these big banks have jumped on the blockchain and “smart contracts” technology of Ethereum. The politically potent banks recognize that they must either adopt these technologies or they will wither on the vine, and they will not look kindly on any government effort to outlaw the technologies that are their future.

The last reason to follow crypto-currencies is their potential to gain value. In a currency-swap, bitcoin acts solely as a medium of exchange between yuan and dollars. But due to the structural limit on the total number of bitcoin that can be created/mined (21 million, of which 17 million are in circulation), bitcoin is a store-of-value currency as well as a medium of exchange.

Global financial assets total $294 trillion.

All the gold in the world is currently worth about $7 trillion.

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Doug Casey on Why Bitcoin Could Hit $50,000

by Doug Casey, Casey Research:

Today, Doug and I continue our conversation on cryptocurrencies. As you’ll see, Doug isn’t just bullish on cryptos—he’s buying them hand over fist.

We hope you enjoy.

Justin: Yesterday, you told me how a young Belgian man gifted you a bitcoin. Have you bought any more since then?

Doug: Yes. I’ve put $100,000 in them. It’s no longer early days, that’s for sure. But perhaps it’s like getting into the Internet stocks back in 1998—they weren’t cheap, but the bubble got much, much bigger. And the Internet—contrary to what people like Paul Krugman thought—was not itself a bubble. Up till now, the only way to play this has been the coins, the tokens, like Bitcoin.

Justin: Got it. Do you own any other cryptos?

Doug: Yeah, I’ve got Ethereum, and a couple of others as speculations. There are perhaps a thousand of them out there now, and most of them are garbage.

So, I’m getting involved in these cryptocurrencies on several levels. I’m trying to make the trend my friend. But cautiously, because there’s a lot of speculation going on.

And as you know, the Chinese are clamping down on the area right now—but that’s going to change.

Justin: It doesn’t seem like you’re too concerned about all this bubble talk then.

Doug: Not true. I am concerned. The market is very, very bubbly. But I think it’s going higher, for several reasons. One, as we discussed, is that some of the cryptos have great utility, and only about 25 million out of the 7 billion people in the world have them. They’re going to get much bigger in the developed world, but even bigger in the Third World.

In all of Africa, most of South America, and a great part of Asia, fiat currencies issued by governments are a joke. They’re extremely unreliable within those countries. And they’re totally worthless outside the physical borders of the country. That’s why those people want dollars.

I think that the Third World will adopt Bitcoin and some other coins in a huge way.

This is because people who own cryptocurrencies, at least for the time being, are making money. They’re saving an appreciating asset rather than a depreciating asset. You’re on a Sisyphean treadmill if you try to save a Third World currency—but ¾ of humanity have no alternative.

These coins are also private. They can transfer wealth outside of the country, which is very helpful. Kwachas, pulas, pesos, and such are worthless outside of the country that issues them. Of course, governments hate that, and this will present a big problem down the road.

The whole Third World is going to go to these cryptocurrencies. They all have smartphones in these countries. A phone is the first thing they buy after food and clothing.

Sure, it’s a bubbly market. But soon billions more people will be participating in it. So, it’s going to get more bubbly. That’s my argument.

Justin: I’ve never heard that argument before, but it makes a lot of sense.

So, do you view cryptos mainly as speculation? Or do you also see them as a chaos hedge?

Doug: Well like I said, cryptocurrencies are just the first application of blockchain technology. I think they have staying power simply because government fiat currencies are bad, and will be getting worse. They’re not going away. But I view them mainly as a speculative opportunity right now.

How high is Bitcoin going to go? Bitcoin is kind of the numeraire. It’s the gold standard, as it were, of cryptocurrencies. John McAfee, who founded the cyber security giant McAfee, Inc., thinks it’s headed much higher.

I recently got together with John. I stayed at his house, we spent a day together, had drinks and cigars, and got along extremely well. He’s a very, very bright, knowledgeable, and entertaining guy.

He thinks Bitcoin’s going to $50,000.

That sounds outrageous, but it’s entirely possible. Another 10-1 in a manic market is possible—this brings up thoughts of tulip bulbs, of course.

Remember, Central Banks all over the world are printing up fiat currencies by the trillions, desperately trying to put off a collapse of the world economy. Many will issue their own cryptos—they’re trying to totally abolish paper cash as we speak. And they won’t want competition from private currencies like Bitcoin. Governments may well try to outlaw peer-to-peer cryptos. But that’s another topic.

Justin: Very exciting stuff. But I need to ask you one last thing before I let you go… How do Bitcoin and these cryptocurrencies relate to gold? Are they good or bad for gold?

I’m sure many of our readers are wondering this, too.

Doug: They’re very good for gold. Extremely good. That’s because they’re drawing attention to the nature of the monetary system. That’s something few people think about. At all.

When people buy these cryptocurrencies, even if they know nothing about hard money, economics, or monetary theory, they inevitably ask themselves, “Hmm, Bitcoin or the dollar?” They’re both currencies. Then they can start asking questions about the nature of the dollar…the nature of inflation…and whether the dollar has any real value, and what’s going to happen to it, and why.

People are going to start asking themselves these questions—which wouldn’t have occurred to them otherwise. They’re going to see that only a certain number of Bitcoin will ever be issued. But dollars can be created by the trillions, by the hundreds of trillions.

That’s going to make them very suspicious of the dollar. It’s going to get a lot of people thinking about money and economics in a way that they never thought about it before. And this is inevitably going to lead them to gold.

So, the Bitcoin and cryptocurrency revolution will prove extremely valuable for gold. It’s going to draw the attention of millions, or hundreds of millions of people, to gold as the real alternative to the dollar and other currencies, after Bitcoin.

Plus, I suspect future versions of Bitcoin, or Bitcoin 2.0, will be easily redeemable in gold grams. So, this is actually a big deal that most people aren’t looking at.

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John Rubino – Yellen’s Retreat and the Rise of the KleptoCurrencies


by Kerry Lutz, Financial Survival Network:
John Rubino joined us for a discussion of Fed Chairwoman Janet Yellen’s retreat from so-called interest rate normalization. Looks that raising rates is off the table for the foreseeable future. Can QE to infinity be far behind. Things aren’t so good in the Crypto-currency space. Prices of Bitcoin et al., have been hitting the skids the past week. Will it continue? As of last Wednesday there were 970 Crypto-currencies. Does the world need any more? But it’s sure to get them regardless. Let’s see where they head now.

Click HERE to Listen