Gold and silver had a sharp run-up in the last two weeks of 2017. However, the abrupt move in gold has been accompanied by a rapid rise in the gold futures open interest on the Comex. Furthermore, based on the last COT report the banks have dramatically increased their net short position and the hedge funds have gotten, once again, extremely net long. I don’t like the looks of the COT report right now plus I anticipate a possible brief “relief” rally in the dollar index.
But what about cryptocurrencies? Over the past few weeks the largest and most actively traded cryptocurrencies have been massacred in price. This follows on the heels of the news that the founders of Bitcoin and Litecoin sold 100% of their holdings. Nothing like insider selling as a signal about the value of what was sold…
Phil Kennedy invited me on to his podcast to discuss precious metals, cryptocurrencies and the U.S. dollar. We engage in a friendly (I want to emphasize “friendly”) debate on the merits of cryptocurrencies:
The bottom line for me is that gold has been declared a Tier 1 bank asset by the Bank of International Settlements. This means that gold is considered the highest form of bank asset. I believe there’s a good chance gold will move toward and over $1400 this year. As for a price prediction for the cryptos – it depends on the degree to which the fear of losing money overwhelms the fear of missing out on gains for the momentum-chasing speculators – most of whom are Asian-based. We may be approaching that point of no return:
I find it amusing that the stock market is attributing so much value to the “blockchain” technology. In reality, blockchain technology is just a piece of software that increases the degree of security for digital transactions. I fail to see how this will revolutionize our lives the way the roll-out of the internet or the implementation of mass production or the invention of the internal combustion engine or the harnessing of electricity changed and affected our daily lives. I believe the technology has been egregiously over-hyped by promoters who make unrealistic claims about the potential for blockchain software.
But for now it sure is a great “buzzword” for unscrupulous operators to make a lot of money selling blockchain “snake-oil” to suckers. Just add the word “blockchain” to the name of your company and the stock will triple in a day. It’s like the dot.com bubble when any stock with “dot.com” in the name of the company soared. 99.9% of those stocks disappeared completely by 2003.
This article was written Josh Brown of The Reformed Broker
Let’s start our discussion with the technology which made Bitcoin possible called “blockchain”. In very simple terms the blockchain technology is a record of all transactions ever done in Bitcoin. Imagine a gigantic piece of paper that lists every transaction ever completed. Then imagine that there are thousands of copies of this paper, and all of them are automatically updated when any two people agree to exchange Bitcoins. Every time a transaction takes place all these copies are checked for consistency to make sure you actually have the Bitcoins you claim to have. If everything checks out the new transaction is added to all the pieces of paper at once.
This is the heart of the truly genius idea that is blockchain, and it is what it makes it possible to have certainty over a Bitcoin balance someone owns, without needing any central party (like a bank) to verify it. If all the pieces of paper agree then the balance is correct, and trying to doctor or fake all the pieces of paper at once is impossible. The best (and worst) thing about this technology is that it has been made available for absolutely FREE to anyone who wants to use it.
You can read the rest of this here: The Fatal Mistake Crypto Investors are Making Now