Category: FinTech

Today on March 16, 2018 bitcoin is sitting at $8,550 USD. Here we have a couple of my favorite investors throwing shade at bitcoin. What’s interesting is that the crypto industry is actually going thru the necessary growing pains of regulation and use scaling. Because both bitcoin and ethereum are testing their scaling solutions (to compete with banks & visa/mastercard, etc), both are poised for more use adoption this year.

So here’s the FUD:

In February, Berkshire Hathaway, Inc. (BRK.A, BRK.B) vice chairman Charlie Munger had harsh words for bitcoin at the Berkshire annual shareholder meeting.

“It’s just disgusting. Bitcoin is noxious poison,” Munger said. Billionaire Berkshire CEO Warren Buffett once famously called bitcoin “a mirage.”

And the Foresight:

Still, bitcoin has plenty of supporters on Wall Street. Fundstrat Global Advisors co-founder Thomas Lee[WD] says Fundstrat’s bitcoin misery index suggests the sell-off is an excellent buying opportunity for long-term investors.

“The BMI is telling us to keep the negative headlines in perspective,” Lee said, according to CNBC. “When the BMI is at a ‘misery’ level, future returns are very good.”

Fundstrat has a year-end price target for bitcoin of $25,000.

I like to listen to economic news at night and recently heard this lady, Nomi Prins, who was a Goldman Sachs manager, then journalist, talk about the history of the Federal Reserve in America. Her book, All the Presidents’ Bankers is a telling of the relationships between US Presidents and powerful bankers from 1907 to the present.

In 1907 there was a potential stock market meltdown, (caused by some bankers (some people are always trying to game the system)) and Teddy Roosevelt called on his friend J.P. Morgan to fix it. That led to the creation of the Federal Reserve in America. So basically the Fed (the US version of a “Central Bank”) acts as a bridge to do what the Government wants in the economy, via handling Government money. Unfortunately, it seems that printing money (called “fractional reserve banking” and “quantitative easing”), and thus devaluing the currency, is what the Fed tends to do, because it’s easier to flood the economy with money than it is to actually solve the economy’s root problems.

And right now, in 2018, it seems like the US is in the middle of a bigger bubble than it was in 2008 when the banking bubble burst, because the US is over 20 trillion in debt, and is at the point of not being able to make interest payments on the debt if the bond market rates keep going up. So buckle your seat belts!

This article/ video interview is with Mike Novogratz, a veteran Wall Street trader who sees a lot of opportunity in the bitcoin ecosystem:

It started with a late-2015 visit to a friend’s startup in Brooklyn.

“I expected to see Joe, a dog and one assistant. Instead I saw 30 dynamic young people crammed in a Bushwick warehouse, coding, talking on the phone, making plans for this revolution,” Novogratz said. “Macro guys are instinctive. My instinct was, ‘I want to buy a chunk of this company.”’

The article mentions that he’s also starting up a $500 million hedge fund to invest in the crypto-space.