Archive for Cryptocurrencies

Hyperinflationary Expectations: Reflections on Cryptocurrency and the Markets

Source: Michael Ballanger for Streetwise Reports   06/16/2021

Sector expert Michael Ballanger offers insights from bear markets of the past to illuminate the “business of money.”

How quickly we forget.

In each of the last five bear markets since the 1970s, I have etched into my neural storage unit memories as strong and clear as if they happened yesterday. Each one of those nasty declines were accompanied with events that marked the tops and bottoms, consistently found in errant behaviors, and whether they originate from greed, fear or desperation, they were memorable.

Some of those events were the irrational decisions of the investment industry, which always increases staff at the tops and reduces staff at major bottoms. It is found in the emotion-charged decisions of clients who would write letters of complaint because I would not them buy shares in the Hot Stock of the Month, usually some dilly named “Underground Airlines” or “Rectal Gas.”

But the classic bottom-spotting signal always came from the financial advisors, whose evolution from the term “salesmen” in the 1960s and 1970s morphed into “registered representatives” in the ’80s, “financial consultants” in the ’90s, and finally settled as the industry-standard moniker for 2021, “wealth managers.”

A very wealthy businessman from Sarnia, notorious in the local brokerage community for being a “tough sell,” once said to me “Young man, you are the person that takes the bus to work to advise the man that drives a Porsche to work on how he should invest his money, right?” (He wasÖ).

Another memorable story was the broker who had placed a cold call to that same old Sarnia cuss, introducing himself and his brokerage firm at the onset of the sales pitch. Well, it seems that the call went very poorly, during which the prospective client hurled every imaginable insult at the salesman, finally finishing off his diatribe with some ignominious remark about the salesman’s sexual preferences. Pausing for a brief second to determine the wise choice of action, the conversation ended like this:

Salesman: “Mr. Jones, it seems that you are disinterested in the services I have offered. Let me ask you two final questions.”

Mr. Jones: “Fine!”

Salesman: “Do you remember my name?”

Mr. Jones: “No! Why would I remember your name?”

Salesman: “Do you remember the name of my firm?”

Mr. Jones: No! I could care less about your crappy little bucket shop!”

Salesman: “All right, you don’t remember my name and you don’t remember my firm’s name. Correct?”

Mr. Jones: “Correct, Einstein!”

Salesman: “Great. Now go $%$^ yourself.”

Click.

Another great little jewel of an event occurred literally within days of the bottom of the 1981ñ1982 bear market on an elevator in the old Royal Bank building in London, Ontario. A certain high-profile broker known to have a quick wit and slow temper entered the car on the eighth floor and proceeded to sigh and stare down at his shoes for the first few floors. I put on my cheeriest (and phoniest) smile and asked: “Dougieóhow’s it going?” He responded with the singular greatest bottom-spotting indicator of the entire bear market: “Let me tell you how it’s going. I have one client left and that’s me and I am looking for a new broker.

There are literally dozens of little anecdotes like these collected and stored over the last forty years, and while some are entertaining, many are simply instructive of the massive swings in sentiment that one encounters when it comes to the business of “money.”

Here in 2021, behaviors are very similar to those found in 1999 and 1987, and they are in direct contrast to those found at major bottoms in that the euphoria currently gripping the emerging and very youthful “new class” of investors is of a magnitude that made the dot-com bubble pale by comparison.

In the late summer of 1987, I was attending the monthly meeting of the London Chamber of Commerce. Each month a certain “professional” would be asked to speak on a topic that was deemed to be his or her “area of expertise.” One month it would be an accountant and the next a realtor and the next an accountant, after which there would be complimentary cocktails and an informal question-and-answer session. In September of ’87, I was asked to speak about the “booming stock market,” and as I had grown increasingly wary of all of the wild-eyed speculation during that summer, I proceeded to paint a picture of impending doom and the need for caution and restraint.

Well, after the session, what appeared at the time to resemble a lynch mob descended upon me, waving their Manhattans and martinis at me like war clubs, and they proceeded to levy insult after insult as they vociferously shouted the myriad of reasons why stocks were “different” this time, and that speeches like the one I just gave were “dangerous.” One elderly gentleman even threatened to send a letter to my employer, advising them of the errant prognostications of “that dour young man.”

One month after I had to drop off my suit, stained with the juices of olives and cherries (and the odd lemon rind) at the cleaners, the stock market crashed. It took the Dow Jones down 38% from the prior peak, with a 23.7% drop on Oct. 19 alone. Needless to say, just as “hell hath no fury like a woman scorned,” it also applied to the speculator class of investors, who were all summarily taken out to the woodshed and pummeled to within an inch of their financial lives.

Last week, I had the pleasure of speaking with a younger member of the Millennial demographic who quit his job in 2016 to embark upon a career as a serial day trader, blogger, and social media “influencer,” with several thousand followers on Twitter and Instagram. It seems that he (and his followers) decided last summer to sell their stock portfolios and go “All In Bitcoin” at around the $10,000 level.

This young man claimed to have a “plan” that had worked without a hitch for most of the next nine months, but at $55,000 he and his followers discovered the wonderment of leverage and they proceeded to quintuple their positions, using borrowed money, because some electric car guy had decided to put all of his working capital into crypto. It seems the “plan” they had was the same one to which Iron Mike Tyson referred when he said, “Everyone’s got a plan til they get punched in the mouth.”

I do not need to finish off this sad anecdote, but needless to say, this new generation of investors think that the arrival of the Carl Icahns or Elon Musks into the world of social media indoctrination and cryptocurrency participation was a validation of sorts that should be celebrated as the next coming of the Messiah. Sadly, when the Goldman Sachs and JP Morgans of the financial world enter any trading pit, sexagenarian battle scars tell me to sew my wallet to the inside of my sports jacket while I strap my shirt to my back.

These youngsters would have been far better off keeping their cryptocurrency sandbox to themselves, rather than let the “smiling cobras” in, with their disingenuous cheerleading and CNBC sponsorship. The “old guys” from Wall Street looked down from their C-suite towers and saw a brand-new herd of gazelles brandishing pockets full of newly found wealth, and by signaling to the world that they were “initiating coverage” on Bitcoin, it was a seminal “come into my parlor, said the spider to the fly” moment. Here we are, sixty days later and with thousands of Millennial bodybags piling up at the side of the Road to Riches as a result of unbridled greed and unprecedented naivete.

The markets today are entering the summer buoyed by the end of the lockdowns, with supply shock bottlenecks slowly beginning to unclog themselves, liquidity levels incredibly high and “cash on the sidelines” growing rapidly. Normally, I would expect a late-spring selloff in advance of the usual summer rally, but for the metals, it is getting monotonous, as we continue to get report after report of higher prices literally everywhereóexcept for gold and silver, which remain locked in a bullion bank death grip.

How on earth can you get a CPI reading over 5% and have gold prices stay dormant? Answer: bullion bank interference. Jerome Powell’s insistence that this spike in inflation rates is “transitory” only works if the two key barometers of currency debasement are held in check. Gold and silver charging to new highs would send a signal to the bond vigilantes that yields are headed higher, and if you thought the COVID Crash of 2020 was ugly, watch what happens when the bond market participants, all operating on the razor’s edge of leveraged long positions, decide to move from the port to the starboard side of the Titanic. “Ugly” times fiftyÖ

I am of the opinion that there is soon to arrive an “Emperor’s New Clothes” moment, when the bond market decides that central bank omnipotence is somewhat “overrated” and to go with hyperinflationary expectations, as opposed to the status quo. At that moment, the safety of the sound money and assets that you can actually hold in your hand and store in your vaults take precedence over digital havens and virtual hedges. That moment does not appear to be on the immediate horizon, but it is most certainly out there, and remains the reason I continue to hold big positions in the gold and silver developers, with positional emphasis on those companies with undervalued and expanding resources (ounces).

As this missive is being written, copper and silver are up 2.11% and 1.33% (respectively), while gold is down 0.5%. I need to see a two-day close above US$1,910/ounce for gold and a two-day close above US$28.50/ounce for silver. Without those, we are swimming in shark-infested waters.

Originally published Friday, June 4, 2021.

Follow Michael Ballanger on Twitter @MiningJunkie. He is the Editor and Publisher of The GGM Advisory Service and can be contacted at [email protected] for subscription information.

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger’s adherence to the concept of “Hard Assets” allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

Disclosure:
1) Statements and opinions expressed are the opinions of Michael Ballanger and not of Streetwise Reports or its officers. Michael Ballanger is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation. Michael Ballanger was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
3) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Michael Ballanger Disclaimer:
This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

 

Cryptos: What the “Bizarre” World of Non-Fungible Tokens May Be Signaling

By Elliott Wave International

The world of cryptos includes something known as non-fungible tokens, which go by the acronym NFTs.

If you’re unfamiliar with them, they’re a bit bizarre but quite simple. Here’s what the April Global Market Perspective, a monthly Elliott Wave International publication which covers 50+ worldwide financial markets, noted:

Investors’ manic behavior has expanded to include non-fungible tokens, paying large sums of money for essentially a picture of something.

Getting more detailed, “a non-fungible token is a unique identification code that is affixed to a [digital] asset using blockchain to distinguish it from all other [digital] assets.”

The April Global Market Perspective provided more insight with this chart and commentary:

The chart shows the performance of one of the most unseasoned of all collectibles, the non-fungible token (NFT), which first hit the market in December 2017. … In addition to rocketing prices, NFTs surged into the culture at large with tokens tied to everything from basketball and football players to Passover and a Saturday Night Live skit. Capping the rage is a “digital collage” of bizarre, post-apocalyptic images called Everyday, which sold for $69.3 million through Christie’s on March 10.

Well, the NFT craziness has persisted, as the May Global Market Perspective followed up by showing this NFT and saying:

Apparently, NFTs are still a thing. Paris Hilton, who is famous for being famous, garnered a bid of $1,111,211.00 for this Iconic Crypto Queen token on [April 25]. The absurdity of it all is not lost on everyone. “Each market frenzy seems crazier than the last,” says MarketWatch.

As for one of the latest developments, on June 10, Barron’s showed this image under the headline:

‘Covid Alien’ CryptoPunk Sells for $11.75 million in Sotheby’s Sale

The reason for pointing out investors’ interest in non-fungible tokens is to emphasize the level of financial mania that has been reached.

The monthly Global Market Perspective employs Elliott wave analysis to forecast what’s next for cryptos, global stock markets, rates, metals, energy, forex and much more.

If you’d like to learn how the Wave Principle can help you analyze financial markets, you are encouraged to read Frost & Prechter’s Wall Street classic book, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:

In the 1930s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns. The patterns he discerned are repetitive in form but not necessarily in time or amplitude. Elliott isolated five such patterns, or “waves,” that recur in market price data. He named, defined and illustrated these patterns and their variations. He then described how they link together to form larger versions of themselves, how they in turn link to form the same patterns of the next larger size, and so on, producing a structured progression. He called this phenomenon The Wave Principle.

Although it is the best forecasting tool in existence, the Wave Principle is not primarily a forecasting tool; it is a detailed description of how markets behave. Nevertheless, that description does impart an immense amount of knowledge about the market’s position within the behavioral continuum and therefore about its probable ensuing path. The primary value of the Wave Principle is that it provides a context for market analysis. This context provides both a basis for disciplined thinking and a perspective on the market’s general position and outlook. At times, its accuracy in identifying, and even anticipating, changes in direction is almost unbelievable.

Good news! You can read the entirety of the online version of the book for free!

All that’s required for free access to Elliott Wave Principle: Key to Market Behavior is a free Club EWI membership. Club EWI members enjoy free access to a wealth of Elliott wave resources on investing and trading.

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This article was syndicated by Elliott Wave International and was originally published under the headline Cryptos: What the “Bizarre” World of Non-Fungible Tokens May Be Signaling. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

The Bitcoin Crime Wave Hits

By Elliott Wave International

The conviction gripping bitcoin’s ascendancy is so deep that children are now being indoctrinated into the bullish fold. We talked about this phenomenon with respect to the stock market last month. This Bloomberg column from May 16 signals its arrival in the cryptocurrency world: “Why I Pay My Seventh Grader in Bitcoin.” The columnist claims he wants his “kids to be able to think independently about money” and “feel the full spectrum of feelings that money induces.” Sure, why not feel the burn of the real world? Besides, the big kids are doing it, too. According to MarketWatch, “As Bitcoin and Dogecoin Plummet, College Students” are “Going Long on Crypto.” According to a survey by College Finance, “more than 60% of college students and recent graduates see crypto as a long-term investment.”

In April, EWFF showed two magazine covers’ positive portrayal of bitcoin and other cryptocurrencies. We labeled it bearish for bitcoin’s immediate prospects. Last month, we added that bitcoin’s “Great Arrival” into the “mainstream” of finance confirmed this forecast. One of the signals of cryptocurrencies’ acceptance into the financial establishment was Coinbase Global Inc.’s emergence as a publicly traded company. On May 19, with bitcoin down more than 53% from its high, Bloomberg observed the following about the premier cryptocurrency trading platform:

The siren song reached a peak with Coinbase Global Inc.’s market debut on April 14. The direct listing of the largest U.S. crypto exchange supercharged theories that crypto had made it to the investing mainstream, that Wall Street’s embrace lent legitimacy to the asset class and the sky was the limit. Retail investors flooded in.

210609 - FFThe chart at right shows the relationship between bitcoin’s top and Coinbase’s public offering, which occurred the same day. The chart also shows that the rise in crypto optimism pressed on as so-called altcoins, dash, litecoin and ethereum, rallied until May 7, May 10 and May 12, respectively. Then they crashed. Various other indicators also pressed on. According to a Bank of America monthly survey, fund managers were never as enamored with bitcoin as they were in the first few days of May. The result of its poll of 194 managers showed that bitcoin was the “most crowded trade,” with 43% saying they were long bitcoin. The total was the highest for the cryptocurrency in the history of the survey, which dates from December 2013. In January, bitcoin was also the leading fund manager asset with 40% holding the crypto back then. The only other months in which bitcoin was the leading asset were September and December 2017, when about 30% of fund managers said they held the crypto. Bitcoin topped that very month and plunged 84% over the next 12 months. The same set-up is already well on the way to producing a similar result.

If there is one thing bitcoin enthusiasts cannot accommodate, it is criticism. In early May, after Berkshire Hathaway vice chairman Charlie Munger called the cryptocurrency “contrary to the interest of civilization,” “crypto enthusiasts mocked his investment performance, compared him to an elderly Muppet and said he was too old to understand the technology.” A well-known crypto investor/CEO added, “Do you go to your great-grandfather for investment advice on new technologies?” And then of course, there is dogecoin, the joke-coin-turned-crypto-blue-chip, which recently showed up for its curtain call. As discussed last month, the crypto took its star turn on Saturday Night Live on May 8, where guest host Elon Musk mentioned the joke currency. As he did, dogecoin’s price fell 30%. From its peak of 74 cents, dogecoin declined 70% to May 19.

Here’s what EWFF said to look for in the culture with the onset of a new trend: “When a bear market begins, the focus will shift from crypto speculation to crypto crime and scandal.” It didn’t take long. On May 12, two days after the Dow’s recent intraday high, Bloomberg Businessweek columnist Joe Light reported that “a criminal gang” responsible for the cyberterrorism attack that shut down 45% of the East Coast’s fuel supply, demanded to be paid “a ransom in bitcoin, or another cryptocurrency. How’s that for “contrary to the interest of civilization.'” He went on to list various ways in which regulators are moving in on the crypto sphere. As bitcoin declined over 30% on May 19, the attacks against the legitimacy of cryptocurrencies spread. “China banned the use of cryptocurrencies for financial institutions,” reported Barron’s. “Other countries might be considering tighter regulation, particularly as cryptos become the currency of choice for ransomware hackers. Tesla stopped accepting bitcoin as payment for vehicles.” On May 21, Bloomberg ran an editorial stating that bitcoin’s “price is completely disconnected from any practical use. It’s useless as a means of payment and store of value (unless you’re a criminal). Your crypto is worth only what the next buyer will pay–and that could be an awful lot less than you hope.” In investment markets, it was ever thus. As bitcoin started its post-December 2017 crash, EWFF observed:

Bear markets are always more volatile than bull markets. Yet-higher volatility will further damage bitcoin’s role as a medium of exchange, which will destroy its role as a store of value. The currency has always been vulnerable to this vicious cycle.

The attacks in more public forums are occurring because the vicious part of the cycle is underway once more. But this is not to say the optimism is in any way extinguished. Bitcoin hedge funds are reportedly treating the decline “as nothing more than a sale.” Here’s a quote from a Singapore-based hedge fund operator on May 21: “Every time we see massive liquidation is a chance to buy. I wouldn’t be surprised if bitcoin and ethereum retrace the entire drop in a week.” On May 19, Bloomberg reports that a well-known investment manager is “keeping the faith.” “We go through soul searching in times like this,” she says. “Our conviction is just as high.” Bloomberg’s headline says she’s still a “Bitcoin Believer, Sees It Going To $500,000.” Our guess is that it will not be the last wild bitcoin prediction.


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When it debuted in 2009, one Bitcoin was worth ~0.5 a cent. By 2011, it suffered one blow after another, from hacking and theft, and remained currency-non-grata to most of the world.

But the contrarians at Elliott Wave International saw Bitcoin’s potential as early as 2012; quote:

“Presuming Bitcoin succeeds as the world’s best currency — and I believe it will — it should rise many more multiples in value over the years.”

Result: What happened next… well, you already know.

The question is, how do you ride Bitcoin’s upcoming twists and turns? (And there will be many!)

EWI’s free crypto report gives you 5 clear Bitcoin strategies.

Read EWI’s “Crypto Trading Guide: 5 Simple Strategies to Catch the Next Opportunity” now.

This article was syndicated by Elliott Wave International and was originally published under the headline The Bitcoin Crime Wave Hits. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

El Salvador becomes first country to adopt Bitcoin – it won’t be the last

By George Prior

– El Salvador has become on Wednesday the first country to adopt Bitcoin as official legal tender – but it will not be the last, affirms the CEO of one of the world’s leading financial advisory and fintech organisations.

The prediction by Nigel Green, chief executive and founder of deVere Group, comes as the Legislative Assembly of El Salvador on early Wednesday voted to pass a bill that declared Bitcoin, the world’s largest cryptocurrency by market capitalisation, as legal tender, according to the Communications Secretariat of the Presidency of the Republic of El Salvador.

It secured 62 out of 84 votes.

Mr Green notes: “El Salvador has become the first country to adopt Bitcoin as official legal tender – but it will not be the last.

“Some larger, more powerful countries are trying to quash or slow the inevitable shift to borderless, global, digital currencies.

“But this small Central American nation has embraced the biggest one of them all – Bitcoin – and recognised it as official legal tender.

“El Salvador has made history and become a true pioneer of the digital age.”

He continues: “Where El Salvador has led, we can expect other developing countries to follow.

“This is because low-income countries have long suffered because their currencies are weak and extremely vulnerable to market changes and that triggers rampant inflation.

“This is why most developing countries become reliant upon major ‘first-world’ currencies, such as the U.S. dollar, to complete transactions.

“But reliance on another country’s currency also comes with its own set of, often very costly, problems.”

A stronger U.S. dollar, for example, will weigh on emerging-market economic prospects, since developing countries have taken on so much dollar-denominated debt in the past decades.

The deVere CEO goes on to say: “By adopting a сryptocurrency as legal tender these countries then immediately have a currency that isn’t influenced by market conditions within their own economy, nor directly from just one other country’s economy.

“Bitcoin operates on a global scale and is, as such, largely impacted by wider, global economic changes.”

In addition, cryptocurrencies could also help bolster financial inclusion for individuals and businesses in developing countries as they can circumnavigate the biases of traditional banks and other financial services providers.

Mr Green concludes: “There will no doubt be critics – probably those based in wealthy countries – who will knock this bold move by El Salvador.

“But I believe we should welcome the forward-thinking approach to solving complex issues.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Bitcoin Crashing To $16,000 Would Be Completely Normal If We Look At Its Historical Price Action. Are Traders Still In Denial?

By TheTechnicalTraders 

Chris Vermeulen joins Greg Dickerson from Dickerson International for the first time to discuss the historical price action of bitcoin and what we can expect in the future. It may seem like the correction is over with bitcoin dropping 54% in a matter of weeks but when you look at its history, having a 70 to a 90% correction is completely normal. That is why we still see a strong possibility of a downside move to $16,000-$20,000. But are traders in denial and expect instead to get rich quick and go to the moon? Watch to learn more.

CLICK ON THE IMAGE BELOW TO WATCH THE INTERVIEW

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New Technology Company Launches a Prime Brokerage for Digital Asset Management

Source: Streetwise Reports   06/03/2021

DLCC received funding from exclusive, NYC-based accelerator Aves Lair that supports start-ups in the verticals of AI, blockchain, cloud and data.

Digital Lending Capital Corp. (DLCC)óa new private companyóoffers full-service prime brokerage solutions for digital assets.

“Our all-in-one user interface leverages both API and SaaS product offerings to connect clients with a growing network of liquidity providers to transact, borrow and lend digital assets, and manage collateral,” states DLCC, “Our product suite also offers traditional prime brokerage services.”

Technology

“Prime brokerage is a bundled group of services that investment banks and other financial institutions offer to hedge funds and other large investment clients that need to be able to borrow securities or cash in order to engage in netting to achieve absolute returns,” states Investopedia.

Financial institutions need a minimum account size to be able to transact with prime brokers and all prime brokers have different requirements and fees.

“There would not be hedge funds if it weren’t for the large, bulge-bracket investment banks like Goldman Sachs and Morgan Stanley and Bank of America Merrill Lynch and Credit Suisse that provide them with these prime brokerage services,” confirms Forbes.

DLCC Prime Services

“Our platform is agnostic across the board,” stated James Runnels, co-founder, CEO and director of DLCC. “Our clients can trade Bitcoin or Ethereum, or any other digital asset. We don’t care if it goes up or down, left or right. Volatility is our friend. That’s what we care about.”

“If crypto is going to be considered a real asset classówhich I think we are on the verge of nowóyou need traditional players to come into the space and participate in the manner that they’re accustomed to, from a regulatory perspective,” added Runnels.

All of DLCC’s clients go through a rigorous KYC (Know Your Customer) and AML (anti-money laundering) process before they can be on-boarded.

We asked Runnels if DLCC is set up for retail investors.

“In our current iteration, we can only onboard institutional clients,” explained Runnels. “That’s defined by investors with greater than $5 million in assets. That said, we are in the process of submitting a member application with FINRA (Financial Industry Regulatory Authority) and the NFA (National Futures Association) to be a registered as broker-dealer.”

Once the broker-dealer registration is finalized (180-day process) DLCC would have the ability to onboard “sophisticated retail clients.”

Streetwise Reports did a demo on DLCC’s platform andódespite the complexity of the serviceófound it entirely intuitive.

Aves Lair, a New York City-based accelerator that supports start-ups in the verticals of AI, blockchain, cloud and data, has made an investment in DLCC.

“DLCC, a member of our Winter 2020 accelerator cohort, has built a suite of prime services that allows traditional asset managers and allocatorsóincluding global macro hedge funds, family offices and endowmentsóto participate in digital assets,” explained John Payne for Aves Lair on Hacker Noon.

“DLCC’s prime services suite makes participating in digital assets less confusing and fragmented for institutions, can be plugged into a firm’s existing infrastructure, and borrows best practices and rules and regulations from traditional asset classes,” continued Payne.

“The product offering allows users to trade digital assets through the company’s prime brokerage platform, locate and borrow digital assets, short digital assets with cutting edge tools to manage directional risk, lend digital assets to augment yield, and manage collateral across users’ open positions, as well as profit and loss.”

Aves Lair states the DLCC’s platform “mitigates the fragmentation that discourages traditional institutions from participating in digital assets.”

“Most everyday investors understand the operational components of buying and selling traditional stocks,” explained Runnels. “That’s ingrained in everyday finance. DLCC’s software embeds those operational components with all the rules and regulations and best practices that govern those traditional securities.”

“The real meat on the boneóthe most financially meaningful part of prime brokerage and traditional financesóis borrowing, margin financing, all those tools that sophisticated fund managers use to manage directional risk,” added Runnels.

“DLCC clients have the ability not only to just buy and sell, but also borrow and lend in one ecosystem, with one counterparty,” explained Runnels, “In crypto prime today, there are usually multiple counterparties. That is complicated and makes investors uncomfortable.”

“When traditional hedge fund allocators, endowments and family offices allocate capital to a fund manager, they know that their prime broker will have all the tools to manage directional risk in one relationship versus having three or four or five different relationships,” added Runnels.

DLCC also has a comprehensive white label solution for institutions looking to offer a full suite of prime services to clients.

We asked Runnels if he planned to take DLCC public.

“It’s a possibility that we will do an IPO,” stated Runnels, “But, in my opinion, there’s a higher likelihood that DLCC gets acquired by a traditional financial entity before an IPO takes place.”

“Typically, prime brokers are created through acquisitions,” explained Runnels. “These businesses need to stay relevant. DLCC’s technology is an extension of their core businessólending and borrowing. We could plug our platform right into a bank today. For these reasons we feel that an acquisition is more likely than an IPO.”

“DLCC’s prime services offering has the potential to revolutionize how traditional institutions participate in digital assets and help the traditional finance world lean into, embrace and adopt digital assets,” stated accelerator fund Aves Lair.

 

Disclosure:
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NFTs – part of this decade’s investment megatrend?

By George Prior 

– NFTs, or non-fungible tokens, will become an integral part of the “tech investment megatrend” of the next decade, affirms the CEO of one of the world’s largest independent financial advisory and fintech organizations.

The comments from Nigel Green, deVere Group chief executive and founder, come despite the drops of about 80% in recent days in the NFT market from a peak of $102 million in NFT transactions in one day at the beginning of May.

NFTs are digital collectibles that are encoded onto a blockchain – the same technology on which cryptocurrencies run – creating a unique digital watermark showing ownership and the digital rights to that collectible.

In recent months many major global sports franchises, fashion brands and household name artists and musicians have launched NFTS.

In April, auction house Christie’s sold “Everydays” the First 5000 Days,” a digital artwork in JPEG form by an artist known as Beeple, for US$69.3 million – making it the third-most-expensive work ever sold by a living artist.

Mr Green notes: “The temporary drop in NFT transactions in the last few weeks is not surprising. It’s still a very new market that many investors still do not understand or even know about.

“However, technology will inevitably be the investment megatrend of the decade and, I believe, that we can expect NFTs to become an integral part of this.”

He says there are four main reasons why this is the case.

“First, our daily lives are becoming ever more tech-driven – and this is picking up momentum all the time.

“Second, it is about demographics. With the younger demographic – who are “digital natives,” having grown up under the ubiquitous influence of the internet and other technologies – who have increasing spending power, there will be increasing demand for tech-orientated products such as digital investments.

“Third, there’s increasing interest and investment in cryptocurrencies, which is how NFTs are purchased.

“Fourth, NFTs are positively changing business models, especially in the creative industries.

“Artists and musicians for example can provide enhanced virtual experiences for collectors and buyers, they can prove their works are not counterfeited, and they can include criteria to get royalties every time their works are resold in the future.”

But Mr Green recognizes that there are still many NFT skeptics.

“Some traditionalist commentators have dismissed NFTs as a fad and/or a bubble about to burst.  I would suggest that these would have been the people, including some tech experts, to have also dismissed the internet in the 1990s and the likes of Amazon in the 2000s as ‘hype.’

“The bottom line is that millennials and Gen Z especially have digital lives and it’s natural to want to take digital representations of luxury brands, music and art into these worlds – and now they can – and this has value.”

However, the deVere CEO concludes with a warning: “NFTs will have growing dominance within the tech investment megatrend of this decade.

“But the market is very young and highly speculative at this stage and, as such, the risks are high.  Extreme caution must be exercised.

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Bitcoin: Here’s the “$64,000 Question”

Will the cryptocurrency ever trade at its all-time again?

By Elliott Wave International

In the 1950s television game show, “The $64,000 Question,” contestants answered general knowledge questions and the money they could earn doubled as questions became more difficult.

The show’s title spawned the well-known phrase — “that’s the $64,000 question” — which, as you probably know, means the crucial question which gets to the heart of a matter.

Well, “the $64,000 question” for bitcoin is: Will the cryptocurrency ever trade at its all-time of $64,899 again (which was reached on April 14 of this year)?

This is a top-of-mind question for many bitcoin investors who’ve seen the cryptocurrency bounce back from every “correction” since the start of its meteoric rise.

For instance, on Jan. 27, the headline of a major financial magazine asked (Forbes):

Bitcoin Has Crashed. Is This The End?

That was in response to Bitcoin’s swift slide from near $42,000 to around $30,000.

Yet, bitcoin’s Elliott wave pattern suggested that the price would rebound. Here’s a chart and commentary from the Feb. 5 Global Market Perspective, an Elliott Wave International monthly publication which covers 50+ worldwide markets:

Our preferred [Elliott wave] count is that [Bitcoin] is advancing within the subwaves of a [larger up wave]. … The wave IV (circle green) correction played out for most of January. Wave evidence suggests that the correction ended on Jan. 22.

As you probably know, the cryptocurrency went on to climb to as high as near $58,000 on Feb. 22. But, then, another heart-pounding drop followed. The price had dropped around $12,000 in just a matter of days.

But, yet again, the digital currency bounced back and eventually hit that April 14 high of more than $64,000.

So, we return to the “$64,000 question”: Will bitcoin ever trade at $64,000 again?

The Elliott wave model is once again offering insight — you’ll find it inside Elliott Wave International’s Crypto Pro Service right now, as soon as you’ve subscribed.

Also, tap into the knowledge found inside the special free report:

Crypto Trading Guide:
5 Simple Strategies to Catch the Next Opportunity

Here’s a quote from that timely free report:

From its December 2017 peak near $20,000, Bitcoin plummeted more than 80% to below $4000 per coin at its 2018 low.

Yet, as you just saw, in both cases — before Bitcoin took off and before it crashed — Elliott wave analysis and sentiment readings were several steps ahead of the markets.

Imagine what you could have done with such advance information.

Elliott wave analysis is uniquely equipped to warn you of changes no one else sees coming.

You can have Crypto Trading Guide: 5 Simple Strategies to Catch the Next Opportunity on your computer screen in just moments. Remember this special report is free.

Just follow this link: Crypto Trading Guide: 5 Simple Strategies to Catch the Next Opportunity

This article was syndicated by Elliott Wave International and was originally published under the headline Bitcoin: Here’s the “$64,000 Question”. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Are some banks on wrong side of history on cryptocurrencies?

By George Prior

– Banks and other financial institutions who still refuse to recognize major cryptocurrencies, such as Bitcoin, as a legitimate asset class are putting themselves on the wrong side of history, says the CEO of one of the world’s largest independent financial advisory and fintech organizations.

The bold observation from Nigel Green, chief executive and founder of deVere Group, comes despite the cryptocurrency market shedding more than $1 trillion in a week after all-time highs, which have prompted some financial institutions to speak out on the likes of Bitcoin.

However, the world’s largest cryptocurrency advanced as much as 19% on Monday.

Mr Green says: “Bitcoin, amongst other digital tokens, has had a hugely impressive run over the last six months, so it’s not surprising that there’s a period of consolidation and short-term correction in such a hot market.

“We can expect market turbulence of this nature to continue until it fully matures and there is even greater institutional investment.

“But if you zoom out on the charts and take a look, they show that Bitcoin and Ethereum, the two biggest cryptocurrencies, have consistently been on an upward trajectory over the longer-term – but no financial market ever moves up in a completely straight line, yet the upside direction is clear.”

He continues: “As such, I find it baffling that some banks have decided to refute the legitimacy of cryptocurrencies.

“By doing so, they are not only placing themselves on the wrong side of history, but they’re not providing clients access to the potentially significant opportunities of key digital assets that could define the future.

“Of course, cryptocurrencies are not for every client – but neither is any investment. Therefore, a refusal of one particular asset class seems somewhat peculiar.”

He goes on to say: “The blistering pace of the digitalization of economies and our lives means that from now on there will be a growing demand for digital, global, borderless money.

“Indeed, digital currencies have already changed forever the way the world handles money, makes transactions, does business, and manages assets.

“They are becoming an integrated part of the mainstream financial system, which is evidenced by more and more Wall Street giants, social media platforms and multinationals, amongst others, becoming increasingly actively pro-crypto.

Mr Green, who has long been an advocate of cryptocurrencies, is one of the leading voices calling for greater regulatory scrutiny of the market.

Last week, he said that the U.S. Treasury Department’s new, stricter cryptocurrency rules underscore how the likes of Bitcoin are becoming increasingly mainstream.

“I believe that this is recognition by those running the world’s largest economy that cryptocurrencies, in some form or another, are the future of money. The genie can’t be put back in the bottle,” he noted.

He went on to say that he believed it could be the first significant step towards global regulation.

“It is inevitable as the market grows and matures.  Proportionate regulation should be championed. It would help protect investors, shore-up the market, tackle criminality, and reduce the potential possibility of disrupting global financial stability, as well as offering a potential long-term economic boost to those countries that introduce it.”

The deVere CEO concludes: “When everything from voting to entertainment is already digital, dismissing digital currencies in a digital era as part of a properly diversified portfolio, to my mind, seems a little archaic.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Bitcoin: More Volatility Directly Ahead?

Here’s how Elliott wave analysis helps you prepare for cryptocurrency volatility

By Elliott Wave International

If there’s a single word to describe bitcoin’s price action, that word is “volatile.”

Yet, those who invested roughly a year ago in the cryptocurrency — and stuck with it — have been hugely rewarded. (At least until very recently, as bitcoin traded more than 50% lower from its all-time high on May 19, as the price careened nearly 30% at one point on that day alone.)

Indeed, Elliott Wave International cryptocurrency analyst Tony Carrion provided a video update on bitcoin in the March 2020 Global Market Perspective, a monthly publication from Elliott Wave International which provides coverage of 50+ worldwide financial markets.

You’ll notice in the chart below that his analysis included a forecast for higher prices (as indicated by the upward blue arrow in the right side of the chart):

At the time, bitcoin was trading a tad north of $8700. Of course, since then, bitcoin has climbed as high as near $64,000 before pulling back significantly.

Remember, at the time the March 2020 Global Market Perspective published its bullish outlook, there was a lot of negative news about this “granddaddy” of crypto-assets.

For example, here’s a Feb. 27, 2020 headline from a major financial publication (Forbes):

Bitcoin Has Crashed — Now What?

So, the upward rise in bitcoin from March 2020 was by no means a “given.”

Realize that EWI’s analysts do not extrapolate the present into the future as so many investors are inclined to do. No — they focus on a market’s Elliott wave pattern, and bitcoin’s price pattern at the time strongly suggested that the cryptocurrency was not only headed higher — but significantly so.

The questions now are: Does bitcoin have a lot further to climb — according to the Elliott wave model — or is an even higher degree of volatility expected just around the corner?

Well, a May 13 headline suggests that “fundamentals” are driving bitcoin’s price (CNBC, May 12):

As much as $365 billion wiped off cryptocurrency market after Tesla stops car purchases with bitcoin

Yet, it may be a good idea to see what Elliott wave analysis suggests is next for bitcoin, in addition to other cryptocurrencies.

If you’re new to Elliott wave analysis, or need to brush up on your knowledge, you are encouraged to read Frost & Prechter’s book, Elliott Wave Principle: Key to Market Behavior. Here’s a quote:

No matter what your convictions, it pays never to take your eyes off what is happening in the wave structure in real time. Ultimately, the market is the message, and a change in behavior can dictate a change in outlook. All one really needs to know at the time is whether to be long, short or out, a decision that can sometimes be made with a swift glance at a chart and other times only after painstaking work.

Good news: You can access the online version of this Wall Street classic for free when you join Club EWI, the world’s largest Elliott wave educational community (about 350,000 members and growing rapidly). A Club EWI membership is also free.

Just follow this link to get started: Elliott Wave Principle: Key to Market Behavior — free and instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Bitcoin: More Volatility Directly Ahead?. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.