5 Reasons To Be Bullish About Crypto

David Goodboy's picture

Thursday, September 13, 2018 - 2:30pm

by David Goodboy

Things have not been bullish for leading cryptocurrency names. Bitcoin, ethereum, and XRP are in the midst of an extended bear market from the highs.


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While ethereum has posted over 40% losses and XRP is down close to 90%, bitcoin remains higher by nearly 53% this year. It is interesting to see the grandfather of crypto hold its ground despite the market collapsing around it.

Despite the negativity sweeping the market, bullish progress is steadily being made.

It is critical to keep in mind that cryptocurrencies are a market in its infancy. Volatility and even price crashes are to be expected in new markets. This is particularly true after such a massive price explosion.

What was once a market of anarchists, financial rogues, and other unsavory characters is slowly turning mainstream. The selling is all part of the process!

I remain firmly committed to blockchain and cryptocurrency. It is changing the world, and it is just a matter of what form it takes in the future.

Here are five reasons to remain bullish about cryptocurrency:

1. Cryptocurrency May Save Venezuela
The Venezuela economy is in deep trouble. Inflation approaching 1,000,000% and bolivar devalued by 95% has sent the nation into an extreme crisis.

Hyperinflation has resulted in social and economic chaos. To control the situation, President Nicolas Maduro pegged the bolivar, Venezuela's main currency, to a state-run cryptocurrency called the petro. The petro was launched in February and is backed by Venezuela's oil and mineral reserves.

While an incredibly bold move by the South American nation's government, it is critical to note that most economists, and even cryptocurrency experts, call the policy a colossal mistake. Despite the Venezuela government encouraging its use for commerce, the majority of crypto experts call the tokens worthless and even a scam.

So, with all this negativity, what is the bullish story here?  

First, the experiment of a government attempting to save its economy via a state-issued cryptocurrency is an incredible step toward legitimacy. Even if the petro is a fraud, as many believe, it still paves the way for better implemented government-issued cryptocurrencies.

Secondly, the respected cryptocurrency Dash is making substantial inroads toward mass adoption in Venezuela. Over 200 merchants per month are signing up to accept Dash in the struggling nation. Even name brands like Subway and Calvin Klein have started to honor the currency in Venezuela. Dash is the 14th largest market cap crypto with around $1 billion in circulation.

2. Yahoo Finance Offers Crypto Trading
One of the world's most significant financial news sites has started offering cryptocurrency trading on its platform. The move helps expose crypto trading to millions who see Yahoo Finance as a natural and seamless way to access the market.

It is another building block toward the mass adoption of the product. A very bullish happening!

3. Ethereum Futures Pending Launch
Future contracts are about to launch on the second largest cryptocurrency by market cap, ethereum.

Based on the Gemini Exchange prices, the CBOE plans to start trading futures on the crypto contracts by the end of 2018.

Some experts believe that the launch of bitcoin futures was directly responsible for BTC's price plunge. While there is evidence that this may be the case, it is not definitive. Remember, correlation is not causation.

BTC futures volume was up over 93% in the second quarter, and the futures allow investors to take short positions on the leading cryptocurrency. In other words, BTC futures have been a success so far, prompting the launch of ETH futures.

The fact that the CBOE is expanding its crypto-based futures offerings is another signal that crypto is here to stay!  

4. Bank Of America Signals Crypto Future
In a move that may signal one of the U.S. largest banks preparing for the future of finance, Bank of America (NYSE: BAC) recently applied for a blockchain patent focused on the secured storage of cryptocurrency.

The giant bank boasts nearly 50 patents in the blockchain space, supposedly the most of any company.

While the bank states it has not found widespread use for the patents, it has reported that it wants to be ahead of the curve should cryptocurrencies move mainstream.

It seems that the effort to obtain the patents is signaling that Bank of America has more of an interest and belief in the space than its public statements.

In fact, I think there may be much more going on behind the curtain of secrecy at BAC and other large institutions to prepare for some form of widespread adoption of cryptocurrency.

5. Citigroup Creates DARs
Along with the trend of institutions embracing cryptocurrencies, Citigroup has announced the creations of DARs. DARs, or Digital Asset Receipts, are similar to stock market ADRs but represent cryptocurrencies rather than foreign stocks.

This product removes some of the risks from crypto investing therefore will likely attract more institutional players into the market.

It is critical to note that SEC approval is pending for DARs.

Risks To Consider: Speculation in cryptocurrency is exceedingly risky. Only use money that you can afford to lose.

Action To Take: Continue to watch for signals of the inevitable widespread adoption of blockchain and cryptocurrency!

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David Goodboy does not personally hold positions in any securities mentioned in this article.
StreetAuthority LLC does not hold positions in any securities mentioned in this article.