Regulation Week/IBM & Lumens
What an ugly week. This is the frustrating part of cryptocurrency. You can take an hour trying to find news to support why things are tanking, and there is nothing. I haven’t needed to trade anything for about two weeks now, as I have migrated most of my earnings to ETH. This week put most of us underwater in terms of profit, but seeing ETH stick above $1,000 when BTC was in the $8,000s was extraordinary.
People are beginning to differentiate technical currency from store of value. I do not provide recommendations, but it is quickly becoming apparent that Ethereum has extraordinary value. Their DAPP and smart contract technology is the paradigm in blockchain commerce. That means people use it a lot to pay/get paid for ICOs, development and smart contracts. Solidity is the coding language of Ethereum, and people who can design with it at a high level are extraordinarily rate due to the fact that all of them became filthy rich as early investors. Scarcity and demand are all I am seeing.
My take on the markets
The pain we’ve witnessed the past few weeks is temporary. We have an SEC and futures joint meeting on Feb. 6. This is the big one. Other than the U.S., Japan, China and South Korea, I am not too concerned with governments’ views. India was the culprit this week, with about three different people in their government saying different things about their regulation of currency. I have absolutely no interest in their opinion, as American business/government will determine the future.
On the other side of the spectrum, we have Japan , which has fully embraced crypto and blockchain. Their implementation of blockchain technology will allow them to move much further ahead in the way their companies do business and interact with each other. Their biggest bank (Mitsubishi UFJ) is launching a cryptocurrency exchange! I will be rippin’ the cryp’ in my Mount Fuji Temple in no time. A country like this adopting technology can only be forward moving. Cryptocurrencies can now be used in Japanese banking and transactions, and it is one of the most advanced societies the world has ever seen. Don’t get so gloomy on your prices, we have entire countries getting behind us.
If I could provide one opinion, just don’t move a thing right now. Stay still. Turn off the computer and silently watch the SEC meeting. We will see how they are going to be laying down the law, and that will most likely be what other countries follow. Regardless of whatever happens, we now have smart people looking into the market, so the times of shoddy whitepapers and no coin ecosystem value are long gone. We will get our 1,000% growth this year, but if it is spread across more dog and Trump coins then this ship is going to sink again. We want this market to be built on the customers of these coins, not speculation. This is something we can’t change as investors. Hopefully, as Robinhood exchange comes out with stock/crypto trading for ETH and BTC, we can get some more sticky assets in ETH from new adopters. But, Feb. 6. Remember that date.
IBM and Lumens
I came across the relationship between IBM and Lumens while researching Stratis. The results surprised me.
IBM does have a competitive cloud business, but this is not their relationship with Lumens. IBM has developed a rapid payment processing system, and has used XLM as the encrypted currency to settle the transactions immediately, and compliantly (AML procedures, KYC Information all necessary). So far, banks in the South Pacific – Australia, Indonesia, New Zealand to name a few – have already begun using it in their payment processing for cross-border transactions. The way that people describe XLM is that it can take the digital form of any currency – crypto or non-crypto – use that form to rapidly transact and send funds to any destination, and then change form and settle in the desired currency instantly.
IBM’s Michael Dowling, payment group Group CTO, went on Reddit and did a Q&A about his company’s relationship with Lumens/XLM. When describing their relationship, he said: “It is not just long term, it is tight.” He even mentioned that they are working on opening up fiat/XLM at the institutional level so that banks could begin working with each other in this manner more broadly. Lumens ended the year with almost 14 bank relationships, and Mr. Dowling said that was the beginning.
This was a huge move for IBM. They are the technological backbone of corporate America, as our office infrastructure is almost holistically operated with IBM technology. The fact that they are professing a tight relationship with cryptocurrency is astounding. Please read my earlier analysis on Stellar, as their ICO platform alone is investment-worthy. This IBM relationship is truly the icing on the top. Banks in the South Pacific are small potatoes. IBM and Lumens are waiting for the Feb. 6 meeting mentioned above, and then the true work begins. Please get your popcorn, and also think about a Lumens investment at these lows.
This is NOT a recommendation to buy or sell cryptocurrencies. I am sure most have lost some money right now, so stay put and wait the storm out. I will say it once more. 2/6/2018. This will determine the rules from now on, and I will not be moving a muscle until that happens. Let’s all hope for the best. Good luck. Please do follow me on Twitter @raijincrypto for some tidbits throughout the week.
Featured image courtesy of Shutterstock.