Luddites

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gif by Rollin Bishop, Popular Mechanics

Perhaps, calling someone averse to new technology a Luddite is too harsh a term.  Luddites were trying to stop the advance of technology by destroying labor-saving knitting machines in 19th century England.  Today, we’ve come to use the word to mean a laggard, someone slow to adopt new technology.  There are several friends I consider true Luddites. These are the folks that confess an aversion to technology, only it sounds more like a condemnation. “I can’t even set the clock on my VCR.”

These are the folks that would ask me which PC they should buy, ten years after everyone else already had a computer.  Then, when Apple announced they were coming out with new models in the spring, decide to wait. When I showed off my new Kindle, these same folk would say something like “Nah, I want to feel the texture of the paper in my hands.”  That meant to me electronic books hadn’t come to Main Street yet.  These conversations have helped me gauge where we might be on the new technology adoption curve as I have been wondering about with Bitcoin. When Bobby says “I’m in” I know the technology has hit its cruising altitude.

So it frightens me when one of these same folk (I’m not mentioning any names) calls to find out how to buy Bitcoin. It seems that there is a new vape product he wants to buy but the dealer only accepts Bitcoin. Wow. It hasn’t been thirty days since the Thanksgiving dinner discussion when we had argued over the Bitcoin bubble. Had he purchased Bitcoin then, he’d never have to think about how much pot cost, ever again.

Now, what to think? Are we finished?  Is the run over already? Has Bitcoin reached its fighting weight?  Is this what the future looks like?  Or, is the adoption curve of this new technology so steep that we are going to see explosive growth ahead that will make this past month’s action seem like the calm before the storm?

I’m beginning to think that that is what we are facing. Just in the last few days, I heard about Cryptokitties.io, the online kittens you buy with Ethereum, which are so popular the sales have slowed the Ethereum network to a crawl.  There’s the eSports network switching to Litecoin for its sports gambling.  There’s the CBOE and CME (Chicago Mercantile Exchange) which have been heralded for the past couple of months. Their futures markets will bring Wall Street to Bitcoin.

Each of these is guaranteed to contribute a great deal of new, increased traffic to the world of cryptocurrency. Add to those the coming Ripple ala SWIFT network where banks will sign up to use Ripple to expedite International Wire transfers, Cob coins which will introduce to us fee-free trading of cryptocurrencies, and Electroneum which will replace energy-wasteful mining with mining on smartphones.  The list is seemingly endless.  There are already thousands of new crypto-coins being programmed and introduced.  Some won’t make it.  Many will.  This is going to be huge.

171104 Bitcoin Strength ($7400.00)

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One-year Bitcoin price chart demonstrates explosive growth

Bitcoin’s strength is breathtaking.  You don’t have to be a clairvoyant to see where this is headed.  Coinbase, a leading Bitcoin exchange, claims 100,000 new users opened accounts in the 24 hours (November 1, 2017) after CME (Chicago Mercantile Exchange) announced they would be starting Bitcoin futures trading before the end of the year. The second American exchange, Rofex, Bloomberg reports of Argentina’s futures trading exchange, will formally announce adding cryptocurrency services to its platform. Outrageous predictions by long-time Bitcoin advocates don’t seem all that crazy now.  Max Keiser, who predicted $100,000 in 2011 when Bitcoin was $3.00, says $10,000 is just around the corner.  longforecast.com  a website that gathers future predictions says Bitcoin reaches $10,439 by the end of 2017, $28,781 by the end of 2018, and $46,232 by the end of 2019.

For the last two weeks, Bitcoin’s price has surged.  It started 2017 at $961.  By September 1, 2017, Bitcoin was up 515% to $4,957.  In the next three weeks, Bitcoin has pushed up to an all-time high of $7,412.44; a 50% increase in 21 days.  At first, the other cryptocurrencies also rose in sympathy with Bitcoin.  Of late, however, the other cryptocurrencies had dropped in price, indicating investors were shifting funds into the more lucrative Bitcoin.  Ethereum and Litecoin are now beginning to rebound.

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One-week Bitcoin price chart shows steady, aggressive growth; up 50% from October 14th.

171101 Mainstream Media Calls Bitcoin “legit”

Yesterday, just yesterday, two events made Bitcoin news.  First, Chicago Mercantile Exchange (CME) announced they would be trading Bitcoin futures by the end of 2017.  Then, on CNBC Brian Kelly made a glowing endorsement of Bitcoin as a stable, promising investment. Bitcoin, perhaps as a result of these praises moved to new heights.  This morning Bitcoin hit an all-time high of $6624. Breathtaking.

Today, Bloomberg says the CME announcement “legitimizes” Bitcoin.  This is a very important distinction for any would-be Wall Street investment.  As evidenced by today’s trading volume and all-time high prices, Bitcoin is only beginning to reap the benefits of large investments that were bound to follow.  Bitcoin’s market cap is now about $110B, somewhat less than half the size of VISA.  Bitcoin is hardly a mainstream idea yet.  glider

171031 CNBC Recommendation

There will be a quantum leap in the speed and size of Bitcoin investments when big money Wall Street investors decide to invest.  However, as of yet, no big bank has declared a willingness to trade in Bitcoin using client money.  There have been no Wall Street investment firms buying or selling Bitcoin for customers.  Fidelity has started a Bitcoin mining operation but that is a far cry from trading bitcoin.  Quite the contrary, Jamie Dimon, CEO of JP Morgan Chase declared that bitcoin is a “fraud,” and, he would fire anyone in his firm that traded bitcoin.  Other big bank CEO’s are not as negative but remain on the sidelines and are cautiously optimistic about Bitcoin’s prospects.  This might change very shortly.

Along with Chicago Mercantile Exchange’s (CME) announcement that they would begin trading bitcoin futures by the end of the year, CNBC’s Brian Kelly, who has been a cryptocurrency advocate for several years, today recommended Bitcoin as an investment.  This is huge. This could open the floodgates.

171031 Chicago Merchantile Exchange

Screenshot 2017-10-31 10.42.53The Chicago Mercantile Exchange (CME) (also called “the Chicago Merc”) announcement:

CHICAGOOct. 31, 2017 /PRNewswire/ — CME Group, the world’s leading and most diverse derivatives marketplace, today announced it intends to launch bitcoin futures in the fourth quarter of 2017, pending all relevant regulatory review periods.

This is a big deal.  This could open the way for Wall Street, big banks and investor capital pouring into bitcoin.  At the very least, bitcoin is now on their radar.

The CME trades derivatives, mergers and acquisitions, commodities and options futures.  The old Chicago Board of Trade and NYMEX are now folded into the mix, having been acquired by the CME Group who owns the CME.