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ETF Leader Matt Hougan Predicts Trillion-Dollar Crypto Market in 2018

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After 15 years in the ETF industry, Matt Hougan is taking a career-changing plunge into the cryptocurrency market. The impetus behind the decision is simple: in his view, cryptocurrencies will transform the investment world just like ETFs did over the past decade.

Trillion-Dollar Market

In a recent interview with Bloomberg, Matt Hougan described cryptocurrency as an “early-stage technology,” but one that is primed to grow manifold in the not-too-distant future. This includes a trillion-dollar valuation as early as 2018.

“The pathway to $1 trillion eventually is fairly certain,” Hougan told Bloomberg. “How we get there is going to be volatility and uncomfortable. I think we’ll get there pretty soon, though. I wouldn’t be surprised if we ended the year with a cumulated market cap of over $1 trillion. But I wouldn’t be surprised if there were a significant drawdown again before we got there.”

Earlier this year, the cryptocurrency market looked poised to cross the $1 trillion mark. The total market cap peaked above $830 billion before undergoing a series of massive corrections that saw the total market bottom near $276 billion.

Hougan, who is currently serving as an executive with Bitwise, has also described bitcoin as the millennial generation’s gold for its safe haven characteristics. Although coins such as bitcoin have struggled to achieve mainstream adoption as money, they have succeeded as stores of value.

Crypto Market Cap

The cryptocurrency market has declined sharply over the past week, offsetting an equally large gain during the previous seven-day period. At the time of writing, the total market cap of bitcoin and 1,518 other cryptocurrencies was $435 billion, according to CoinMarketCap.

As we reported earlier, there was no apparent catalyst behind the market’s latest slide, a sign that profit-taking may have been in play. Speculators are slowly returning to the market in the wake of favorable regulatory signals from countries such as the United States and South Korea.

Although many analysts still consider cryptocurrencies to be a bubble, they expect the market to continue growing in the near term. As Hougan indicated, the path higher will be volatile, with double-digit percentage drops likely to remain a staple of the market trend.

To those who doubt the idea of a multi-trillion-dollar cryptocurrency market, it’s important to bear in mind that technological growth is usually exponential. There’s little to suggest that cryptocurrency, or the underlying technology behind it, is even close to hitting full stride.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 462 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Crypto Real Estate: The Time Is Now

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If you’re a Russian oligarch, an Asian billionaire or just a simple kid from South Jersey with giant aspirations, it is time for action in the newly emerging world of crypto real estate.  Here is why.

For the average home buyer the price of a home has increased about 1.72% annually over the past 10 years.  That is just slightly more than the 1.49% rate for the U.S. economy. Things have changed somewhat in recent time and we read Case Shiller numbers placing the rate between 5%-7%.

For investors in bitcoin, the action is taking place elsewhere in the real estate world.  It is in the world of the super high-end real estate where BTC and other cryptos can play a role.

If your soul contains an ounce of cynicism, at this point,  you are probably saying what is new about the connection between crypto and real estate?  The answer is arbitrage. Never have high-end property prices been so high and crypto prices so low.  It would be a classic arbitrage to sell high-end real estate and buy bitcoin.

Natural Buyers For Bitcoin

There are plenty of statistics on housing and loads of public records revealing who owns a given piece of property.  The US government claims that 9.6 million Americans own second homes and perhaps 16% own investment property.

But when it comes to the true high-end market, global real estate is definitely in the billions. For example, take penthouse in 432 Park Ave in New York that, when new, sold for over $100 million in cash and you get the idea.  This is a market where anonymity is prized and protected. This has long represented the “no brainer” for bitcoin to gain acceptance. And best of all, it is perfectly legal medium of exchange.

Enter Propy (PRO)

Here is a company that appears to be positioned to take advantage of transactions in the global ultra high-end real estate market. Before getting started, one thing needs to be disclosed.  I neither own or am being compensated for writing about Propy. I stumbled across the name purely by accident.

Propy.com fancies itself as being dedicated to solving the complexities of purchasing property across borders.  They claim to be the world’s first international marketplace. The PRO token is built on the Ethereum ERC20 standard. Propy raised $15.4 million with their ICO last September which places a value on the company of roundly $100 million.

So PRO may not rank with the likes of Telegram but they are not exactly chopped liver either. With the spread between the price of ultra high-end real estate and bitcoin never having been greater and the perpetual need for anonymity, the team at PRO may find itself in a sweet spot no matter if the like it or not.

The First Crypto Test In Rome On June 28

CCN.com reports that PRO has managed to team up with the Hilton family-owned real estate broker Hilton & Hyland in an auction of a Roman villa named the Palazetto Mansion aiming to snatch $38 million in dollars or crypto from the buyer.  This is not first effort of its kind but it is by far the largest.

Arbitrage In The Air

Events in Rome on June 28 will be most interesting as much for bitcoin as for PRO.  This is not to say that bitcoin is the only crypto in the world, just the largest and best known. Nevertheless, the total value of bitcoin is now just a little over $114 billion so every billion of future real estate transactions will make a difference at these levels.

Perhaps this is all wishful thinking on the part of someone who owns neither PRO nor BTC but several things are obvious.  First, those folks that put their hidden billions in real estate using corporate identities are not casual investors but savvy players with lots of high priced advisors.  Arbitrage spreads between ultra high end real estate and crypto present a pretty irresistible attraction. Just something to consider when investor psychology toward crypto in general stinks.  

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 82 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Market Overview

Derailed

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Hi Everyone,

Another day another crypto related hack.

Even though the volumes traded at the crypto exchange known as CoinRail are rather insignificant, it seems that alternative investors are taking this hack quite seriously.

Despite CoinRail freezing all trading and keeping its lips sealed about specific numbers, some reports indicate that about $40 million worth of tokens were actually stolen. Of course, these estimates were made using yesterday’s prices. Since then, the value of all cryptos has dropped by about 10%.

Here’s a new strategy: any time someone steals something, we reduce the value of the stolen goods on the open market.

Kidding aside, there is absolutely no reason why this smash and grab job at a local boutique should have sent bitcoin down by $1,000. More likely, what we’re seeing is more of a technical correction as we’ll explore below.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Pic of the Year
  • Holy Oil
  • Bitcoin Chart

Please note: All data, figures & graphs are valid as of June 11th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Responding to reporters on Friday afternoon, President Donald Trump seemed very proud of the fact that he hadn’t prepared much for his important meeting with the other global leaders at the G7. If his intention was to derail this negotiation, then indeed not much preparation was needed.

If a regular picture is worth 1000 words, my guess is that this one is worth 10,000. Most telling I think, is Shinzo Abe, who at second glance actually seems to be mirroring Trump’s body language.

Shortly after this shot was taken, President Trump left the meeting early and is now in Singapore preparing for his historic meeting with Kim Jong Un tomorrow.

Global markets seem to be in a rather good mood this morning with all major indices in the green, especially in Asia where stocks are up by about 1% today.

This comes as the US Dollar remains under pressure. It’s come up a long way since mid-April but like President Trump’s policy, the next move is rather uncertain.

The Church on Climate Change

Excuse the pun, but it does seem that Pope Francis the First is a little unorthodox. Over the weekend, he sat with some of the biggest oil tycoons in the world to express his concerns about climate change.

While recent efforts by the energy industry to reduce its carbon footprint were commended by the Supreme Pontiff, it seems there’s still more that can be done.

On the surface, it does seem that the Pope’s interests are actually aligned with the oil barons as many of them are already investing billions into clean energy. In the short term of course, they can probably use this as an excuse to limit production and keep prices up well into the transition.

Bitcoin $1000 Plunge

A deeper analysis reveals that the media may be attributing too much of this plunge to the CoinRail hack.

Here we can see the short term graph. The purple circle shows the approximate time when news of the hack was spreading on social media sites.

As we can see, the big drop came more than 15 hours after the news was fully digested by the markets. Notice that yellow line?

That’s the long-term trendline that we’ve been tracking since the beginning of the year. The break below it was in fact more significant than any hack could ever be.

Here we can see the long-term graph, with the same yellow trendline. Two main levels of support remain. The green line is the lows that were tested and held in early April, and the red line is the low from February 6th.

Ultimately, it seems that the market has been trying to take out that yellow line for several months now. So now that that’s out of the way, what’s next?

Though the CoinRail hack may have set us off-track, I don’t think that this will have very significant ramifications in the long run. The industry has certainly seen much bigger hacks before and other than a technical price level, this doesn’t change much for the path of the industry over the next five years.

At the moment, we know that the infrastructure is still under construction, and some very big investors stand ready to enter the market. However, they will most likely wait until an upswing to join in. We got a taste of that in mid-April when FOMO hit the market like a ton of bricks but in the end wasn’t strong enough to change the trend just yet.

For now, the big money will most likely remain on the sidelines and wait for emerging markets to build momentum, as they did in late 2016. Whether this happens over the course of a year, or within a week, I guess we’ll have to wait and see.

For today, just try not to worry about it too much. A well-diversified portfolio is one that will always withstand the test of time.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Daily Update: U.S. Stocks Retreat as Trump Reshuffles Cabinet

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U.S. stocks declined Tuesday, reversing a strong open as political turmoil in Washington weighed on investor sentiment.

Nasdaq Pulls Back from Record

All of Wall Street’s major indexes finished in negative territory on Tuesday, with the Nasdaq Composite Index pulling back from record territory. The technology-driven index fell 1% to close at 7,511.01.

The broader S&P 500 Index was down 0.6% by the close to settle at 2,765.31. Seven of 11 sectors contributed to the loss, with financials and information technology each shedding more than 1%. Energy and consumer discretionary stocks also posted firm losses.

The Dow Jones Industrial Average declined 171.58 points, or 0.7%, to settle at 25,007.03.

Al three major indexes started the day in positive territory before giving back gains on political headlines involving the Trump administration.

A measure of implied volatility known as the CBOE VIX rose for a second consecutive day but continued to trade below the historic average. Wall Street’s gauge of investor anxiety rose edged up more than 3% to 16.34, on a scale of 1-100 where 20 represents the historic average.

Tillerson Out, Pompeo In as Secretary of State

President Donald Trump removed Rex Tillerson from his post as Secretary of State on Tuesday, a move that caught markets and members of his own party off guard. CIA Director Mike Pompeo was immediately named the successor, ending months of public discord between Trump and his former Secretary of State.

The decision to replace Tillerson comes as the Trump administration embarks on high-stakes negotiations with North Korea on matters ranging from economics to Pyongyang’s nuclear program. Although the Secretary of State is not considered a key decision-maker on economic policy, the cabinet shuffle triggered renewed anxiety over the internal dynamics of the Trump administration.

Trump praised Pompeo for earning “the praise of members in both parties by strengthening our intelligence gathering, modernizing our defensive and offensive capabilities, and building close ties with our friends and allies in the international intelligence community.”

Inflation Rises

A closely-watched report on U.S. inflation came in as expected Tuesday, all but confirming the Federal Reserve’s plans to raise interest rates later this month.  The consumer price index (CPI) rose 0.2% in February, which translated into a year-over-year gain of 2.2%, the Department of Labor reported from Washington. That was slightly ahead of January’s 2.1% annual pace.

So-called core inflation, which strips away volatile goods such as food and energy, also rose 0.2% on month and 1.8% annually.

The U.S. central bank keeps close tabs on inflation to determine the future path of interest rates. Fed officials are widely expected to raise interest rates by a quarter point at next week’s FOMC meeting.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 462 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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