The Money Makers Club now has 12 of 15 available seats. Learn more here!
As legend has it, prize fighter Jake Lamotta returns to his corner at the end of round four of one of his early boxing matches with blood all over and his face was a mess. Trying his best, his trainer tells Jake, you’re doing great kid, they haven’t laid a glove on you. To which Lamotta replies, well you better keep an eye on the referee because somebody is beating the crap out of me.
Lately, those of us who have a passion for the world of cryptocurrencies are feeling that somebody is beating the crap out of us. Trouble is, it is hard to figure out why. Just as we are about to land a punch with the SEC declaring that bitcoin and Ethereum are not securities, ditto that for ICOs that do not convey an equity interest in the issuer, whamo prices drop to 2018 lows.
The Other Side Of The Coin
We read of the recent hack of a tiny South Korean crypto exchange and pundits blame this for helping to push prices lower. However, the market seemed to completely ignore this week’s progress in the Mt. Gox litigation. There is actually a decent prospect that investors that held $450 million in bitcoin at 2014 prices will be compensated in nitcoin. If my arithmetic is working right, this is good news considering the 2014 Blbitcoin price was less than $2.00.
Institutionalizing Crypto
While most eyes last week were fixated on falling prices, exchange giant Coinbase let it be known that it was preparing a crypto custody service. This may appear as a boring administrative step but that is hardly the case. This move is being heralded as the final step in opening crypto to institutional buyers.
Before Coinbase’s solution the problem has been that, despite the highly secure nature of bitcoin and other cryptocurrencies, the wallets where they are stored are a regular target for hackers.
For investors, making cryptos more accessible to institutional investors is every bit as important as adding retail merchants that accept crypto for goods and services.