Blockchain Blockheads
OK, maybe this whole cryptocurrency thing is starting to get a little ahead of itself.
Bloomberg tells the story of a small-cap British internet and information company that’s been around for 20 years… whose stock suddenly quintupled in value on Friday.
The catalyst? The company changed its name from “On-line Plc” to “On-line Blockchain Plc.”
Nor is this a first: Earlier this month, Bloomberg tells us, an outfit in Colorado called “Bioptix” changed its name to “Riot Blockchain”… and nearly doubled in value over the span of a few days.
Even cryptocurrency websites have to acknowledge the crazy. “At the peak of the tech bubble,” says the website Coin Telegraph, “adding an ‘e-‘ prefix or ‘.com’ suffix caused the valuations of companies to jump multifold. During this bitcoin bull run, adding ‘Blockchain’ seems to have the same effect.”
Heh… Here at The 5, a more recent analogy comes to mind. In October 2013, Twitter announced plans to go public the following month under the ticker symbol TWTR… and “investors” instantly bid up a bankrupt electronics retailer called Tweeter with the ticker symbol TWTRQ. (The “Q” is how you know it’s bankrupt.)
Meanwhile, bitcoin crossed the $6,000 threshold on Sunday. (Unlike other asset classes, cryptos trade 24/7.)
bitcoin chart
Whew… It was earlier this month the $5,000 barrier fell.
No obvious reason for this latest move, although rumors abound that the Chinese government is about to ease up on its recent crypto crackdown.
“Crypto opportunities are never going away, and generational wealth will be made.
“I’m telling you the opportunity here is immense. Think, ‘internet 1994’ — a lot of people got very rich before that bubble burst. One day soon, ‘B.C.’ will stand for ‘before crypto’ and ‘A.C.’ will stand for ‘after crypto.’
“Right now we’re living in early years of ‘A.C.’ It’s time to get ready… the world is about to change.”
“Money evolves like anything else and the natural evolution of money is always as a store of value that is easier to move, more secure and more private.”
This just in as we’re assembling today’s episode of The 5: The world’s biggest operator of financial exchanges wants to introduce bitcoin futures. Bitcoin is now over $6,400.
CME Group already has a hand in futures on the S&P 500, oil and gold. Why not crypto? The company “wants to introduce the contracts by the end of the year,” Bloomberg reports — adding that this development “could help professional traders and investors finally get serious about the cryptocurrency.”
But there’s a downside.
This leads to two problems,
“If a transaction doesn’t make it into a block (on bitcoin), it waits a certain period of time to get into the next block. This means it might take more time
“Another problem is that everyone can “see” the transaction on what is called the blockchain. They can’t see who made it, but they can see the size and other details.
“The good news, “is these are problems that can be eliminated.
“But until then, many cryptocurrencies are a big risk and can lead to a lot of overvalued coins. That’s setting the stage for a perfect bubble situation.”
But it also sets the stage for the ideal opportunity: “If you can identify the cryptocurrencies that are legitimate (have strong intrinsic value), then you can make a lot of money playing off the volatile situation in crypto.”
We wrap up our crypto musings today where we began them, harking back nearly 20 years: “Many were burned with similar bubbles like the dot-com boom type in the ’90s,”
To the more conventional markets… where traders are again keeping an eye on events in Washington.