The Future of Bitcoin

Quote of the Day

Decisions we make affect more than one billion people. Here, you shed your clothes and your inhibition."

Gopi Kallayil, chief evangelist of brand marketing at Google, singing the praises of the Esalen Institute. The famous retreat center helps Silicon Valley entrepreneurs loosen up and let it all hang out.

Market Snapshot

  • Financial stocks rallied in response to the Senate passing the tax bill.
  • A sell-off in tech dragged the S&P lower.
  • European markets surged after news of the U.S. tax bill.
  • Bitcoin inched closer to $12,000 before settling back down at $11,500.



Want Morning Brew Daily Served Fresh to Your Inbox?
Drop Your Email Below...

 

The Future of Bitcoin Is Bitcoin Futures

Chicago's got itself an entirely new subway series, with the city's largest derivatives exchanges (CBOE and CME) racing to list Bitcoin futures contracts first.

Yesterday, CBOE beat its competition to the punch, marking its calendar for December 11th--a week before CME's listings will hit the market.

Here's how it'll work: CBOE contracts will be priced by Gemini (the crypto exchange run by the Bitcoin billionaires themselves...Cam and Tyler Winklevoss).

Then? Hungry Wall Street investors will pour millions into short and long positions, betting on the direction of cryptocurrency.

And for a lot of investors, it'll finally be their chance to bet against Bitcoin

Everyone from your grandma to hotshot hedge fund managers like Mike Novogratz has helped inflate Bitcoin's price to ~$11,800. If you invested just $1 back in 2010, you'd have about $1.4 million now.

And while Novogratz believes this is just the beginning, Wall Street's thinking more along the lines of the Jamie Dimons, Warren Buffetts, and Mark Cubans of the world:

"short...short...SHORT."

Critics of the cryptocurrency argue there's nothing intrinsically valuable about Bitcoin. Put it this way: would you rather invest in a stock that generates earnings and pays you dividends, or an overpriced asset that offers you neither?

All-in-all, some investors see it as the economy's best short since the dot-com bubble.

But there are always two sides to the coin

Those who don't want to watch the crypto burn have high hopes for futures.

  • They offer more legitimacy to a currency with practical economic applications (the tech allows for faster transaction speeds and cleaner back-end paperwork for big institutions).
  • They open the door to other financial instruments (like Bitcoin ETFs).
  • A regulated exchange could stabilize the daily mood swings of the currency.

So either way...whether you hate it or you love it--Bitcoin's here to stay.

Things Get Chippy Between Broadcom and Qualcomm

Broadcom (-2.93%), in an attempt to acquire its fellow chipmaker, is proposing a wholesale swap of Qualcomm's (-1.42%) board: 11 of theirs out, 11 of ours in.

How'd it come to this? Qualcomm swatted away Broadcom's initial monster bid of $105 billion, and instead of upping the price (for now), Broadcom is appealing straight to Qualcomm's shareholders.

Here's its pitch:

  • The combined company would rank as the third-largest supplier of semiconductors.
  • For Broadcom, the acquisition would boost EPS by 40%.
  • Broadcom has a much better relationship with a mutual customer, Apple, than Qualcomm (that's not saying much).

Qualcomm's not buying it, calling the proposal a "blatant attempt to seize control" of the board (some real sleuthing there). It still feels low-balled by the offer, and seems content with its strong position leading the 5G revolution.

If the two don't come to the table, it could set up a semiconductor showdown at Qualcomm's annual meeting on March 6th. We've already ordered pay-per-view.

Facebook Tackles Messaging for Kids

Facebook (-2.07%) released Messenger Kids--a new app that allows parents to monitor and approve their kids' online communication.

And with nearly 93% of children ages 6-12 using tablets and smartphones...kids are talking online. And not always with the right people.

For instance, Snap's been a virtual breeding ground for pedophiles looking to hide their identities through the platform's disappearing messages.

So for Facebook COO concerned mother Sheryl Sandberg, creating a parent-controlled messenger app that customizes everything from friends, to GIFs, to detection filters for sexual and violent content, was a no-brainer.

But of course, it's also a strategic play. Snap's recently overtaken Facebook in popularity among teens. Zuck's solution?

Get those tweens hooked before they're teens.

Apple Runs Out of Luck in Ireland

Apple's (-0.73%) free ride in Ireland is over, now that it'll pay $15.4 billion in back taxes starting in 2018.

But what a ride it was. From '03-'14, Apple paid the Irish government at a rate of .005% to 1%--essentially avoiding taxes on all European profits. That didn't sit so well with the EU, which ordered Apple to reimburse Ireland last year (although both Apple and Ireland appealed the decision). Hold on a sec...wouldn't Ireland want Apple to pay up?

Not necessarily.

Ireland's favorable tax structure has made Dublin feel like home for major foreign companies--we're talking the likes of Google, Facebook, Twitter, LinkedIn, and many others. Seriously, an entire neighborhood is known as "Silicon Docks," which is like its California counterpart, but with more bootstrapped leprechauns.

So if Ireland starts losing its luster as a tax haven, tech companies could bolt to the nearest, business-friendliest city. Nuuk, Greenland is pretty nice this time of year.

What Else Is Happening...

  • Roark Capital has a bigger appetite than just BWW. It'll be raising $2 billion to acquire more restaurant chains (h/t Axios).
  • Discovery is upping its stake in Oprah's television network to 70%.
  • There was no breakthrough in Brexit talks.
  • Richard Cordray, the former head of the CFPB, will announce he's running to become the governor of Ohio on Thursday.

Economic Calendar

  • Monday     Earnings: No Events
  •                     Economic Events: Factory Orders (+)

  • Tuesday    Earnings: Dave & Buster's, Lands' End
  •                   Economic Events: International Trade, ISM Non-Mfg Index

  • Wednesday    Earnings: Broadcom, Lululemon
  •                         Economic Events: ADP Employment Report, Petroleum Status

  • Thursday   Earnings: Cloudera
  •                    Economic Events: Jobless Claims

  • Friday       Earnings: No Events
  •                  Economic Events: Consumer Sentiment

By the Numbers: Christmas Trees

By now, we're firmly in the Yuletide spirit, and are busy decking out the Brewery with holiday ornaments. Menorah? Check. Snowman? Only a puddle now, but he was pretty handsome at one point. Christmas tree? Still working on it. The supply of Christmas trees (like the popular Fraser fir) is down, while the price is up. What's going on?

10%--How much more you'll pay for a five-to-seven foot Christmas tree than last year.

$74.70--Average price of a Christmas tree last year. That's more than double what you paid in 2011.

30%--Decrease in acreage used to grow Christmas trees from '02-'12 in the U.S. Blame the Great Recession for putting growers out of business.

7-10 years--The length of time it takes for a Christmas tree to reach maturity. So, it's clear why the downturn is curbing current supply.

$2.84--Price of a gallon of diesel, up 46C/ from a year ago. Rising fuel prices have also made shipping trees a more expensive venture.

The Breakroom

Question of the Day

What four digit number has digit 1 three less than digit 4 which is one more than digit 2 which is twice digit 3 which is not a prime number and is one more than 1/3 of digit 4?

(Answer located at the bottom of newsletter)

Business Trivia

Pick the sponsored 2017 college football bowl game that does NOT exist:

1. Bad Boy Mowers Gasparilla Bowl
2. Cheribundi Tart Cherry Boca Raton Bowl
3. Love's Travel Stops & Country Stores Oklahoma Bowl
4. San Diego County Credit Union Holiday Bowl

(Answer located at the bottom of newsletter)

Stat of the Day

$5.7 billion--Valuation of Vice Media. That's more than the NYTimes, Financial Times, and Washington Post...combined.

Want Morning Brew Daily Served Fresh to Your Inbox?
Drop Your Email Below...

 

Breakroom Answers

Question of the Day: 6849

Business Trivia: Love's Travel Stops & Country Stores Oklahoma Bowl

Comments (15)

Dec 5, 2017

Hey MorningBrewDaily, I'm the WSO Monkey Bot and I am sad to say, but this thread is lonely, so thought I'd post in here to try and help out. Some potential topics that might help:

  • Is $$$Bitcoin$$$ The Next Tulip Bulb Or The Next Dell? Bitcoin was only 0.0001 USD on June 2009; after that, the price of Bitcoin rose to 0.07 USD a year ... of PayPal. Earlier this year, probably late to the party, I heard about Bitcoin again at a local ... poker game; then, the price of one Bitcoin was ~3,000 USD. I immediately headed home to do my research. ...
  • Bitcoin Reaches an All-Time High the value of Bitcoin, as noted in the above article, are capital/currency restrictions and ... isolationist policies. On the verge of a Trump presidency which appears more isolationist than its predecessor, ... comes to investing, so I'm curious: what do you monkeys think about bitcoin and its future? ...
  • Bitcoin Will Explode This Weekend; or How I Got Over My Fear of Public Shot-Calling and Challenged the Bros to Come at Me future of the future of the currency as a legitimate means of commerce; if Black Friday results are even ... $1,200 this weekend. The Bitcoin Black Friday movement will be a real thing and the first legitimate ... display of its capabilities as an actual medium of exchange in the
  • I made the mistake of doing some math on Bitcoin yesterday... case for Bitcoin, Ethereum, Litecoin, etc. I made the mistake of saying "what if" I tossed ... that's right, $50 million is the rough value of the Bitcoin you would currently hold (assuming you ... $1000 into Bitcoin back in mid 2010 when I was about a year out of college... $50 million. Yes, ...
  • Some Thoughts on Bitcoin, Part 1 sleep on Bitcoin, because its volatility will bite you in the ass. And that's the voice of ... experience. I could spend a lot of time explaining what Bitcoin is and how the whole thing works, but ... anarcho-capitalists. That was the genesis of Bitcoin. Alternative currencies were hot almost from day one. Certainly by .
  • Why the question "Is Bitcoin in a bubble?" is not the right question to ask. Bitcoin is in a bubble. I don't think that's really a relevant statement. The prices of Bitcoin ... a hedge against a recession? Do you think the price of bitcoin is going to fall? Either way, where do you ... I was talking to friends recently and though they love Bitcoin and the blockchain, they think ...
  • The Bitcoin Founder? Who is this guy? No one knows who he really is, but according to Wiki: As of 24 May 2017, Nakamoto ... is believed to own up to roughly one million bitcoins,[4] with a value estimated at approximately $4 ... billion USD as of September 2017." So an unknown person is sitting around sipping a latte and no one ...
  • $10,000+ Bitcoin: How might it get there? In a recent article, UBS mentioned The relatively high volume of cryptocurrency turnover, against ... cryptocurrencies to make a real-world transaction. After doing some digging, I realized that most proponents of the ... Intrinsic value and Unit of Account and found that Bitcoin beats Gold on 1 key aspect- Portability. Note ...
  • More suggestions...

Maybe one of our professional members will share their wisdom: @curiousGeorge88 @Damil4real @Dazed_Iam

Hope that helps.

Dec 5, 2017

Researching crypto-currency is not light reading haha. You might consider it discount after the China issue. Block chain technology has the potential to end transaction ledgers and eliminate the need for money wasting bureaucracy thus increasing efficiency. Just ask yourself, how well have I researched this potential position and what are the various ways it might blow up in my face? Proceed with caution.

"The only thing I know is that I know nothing, and i am no quite sure that i know that." Socrates

Dec 5, 2017

It's the beginning of the end. Some of its fundamental weaknesses are emerging. The federal government is already talking about regulations. Rogue countries like North Korea are already focused on hacking the system. This is probably a good time to sell.

Dec 5, 2017

A good time to buy; buy or double down when people are panic selling. Price will rebound towards greater heights. You need time and patience to research and understand the blockchain technology. Hacking won't be easy and cheap; what doesn't kills you makes you stronger. Only invest what you can lose.

Dec 5, 2017

3,400 usd as of now. We'll see in the near future.

Dec 5, 2017

Break 4000... Hmm... let's see where it's at the end of the year... Still a good time to buy...

Dec 5, 2017

I think Bitcoin is very far from the maximum price that will eventually hit. What will that price be? I don't know, but I think it can make 10k, easy.

Dec 5, 2017

The thing that gets me about Bitcoin is how it is not government backed. The U.S. dollar has respect world over because the U.S. Government is backing it.

Who's backing bitcoin ? I think it may take time for the haze to settle. It works in places where there is 0 trust in the government , like in Venezuela. But Central Banks across the world aren't all out of whack. The entire world is not a Zimbabwe or a Venezuela where you need a truck full of paper government currency to buy real goods.

More-over, how does the layman understand it ? 99.9% of my relatives are lay people. They don't even know what a blockchain is.

As for the coin itself, I don't trust it. I've been duped by way too many private "value creators" in my life. People passing off companies listed on the stock exchange as having massive amounts of revenue when in reality it was just fake financial statements, fraudulent CEOs lying about the quality of their oil reserves, blah blah blah.

Moreover, I'm wary of unscrupulous get-rich quick schemers going to any length to mess with the system to mine a gazillion overnight. I've seen the lengths some people in my college go to , they spend entire nights mining and invest heavily in computers to set them to mining work.

I know the shady guy at my college can't print the U.S. Dollar and even if he did he'd be caught and the law would take its own course. What I don't know is who's stopping some computer genius with 0 moral compass from messing with the system and dragging my coin's value down in his get rich quick scheme.

It may work for some, but I've been ripped off way too many times by private value creating organizations to trust it.

    • 1
Dec 5, 2017

Best time to buy bitcoin at a discount. This is the future of transactions. The innovation of the blockchain technology has given us a tremendous amount of advantages with a few disadvantage like money laundering etc. The problem is not with the technology, but bad people that use the technology.

If a car crash happened every year, does that mean you stop selling cars?
If an aspirin causes 15 death over 100,000 cases, does that mean you stop taking it when needed?
It's the same argument and it's irrational to say ban all bitcoins because there's a few who's money laundering it and using it to buy illicit products.

And I'm not down to debate fiat currencies against a distributed ledger based on blockchain etc.

    • 2
Dec 5, 2017
indophilosopher:

Best time to buy bitcoin at a discount. This is the future of transactions.

It may be the future of transactions. Does this mean that Bitcoin will succeed?

Dot coms had identified the internet as the future, and they were correct. Selling books, clothes etc via the internet were all great ideas, and nowadays there is plenty of super successful firms or websites which have just developed the dot coms intuitions.
However, we all know how it ended.

Bitcoin (and cryptocurrencies generally) has a huge potential, but what I ask myself when I am tempted by investing in it is: how could it develop in the near future? Is it the near future of transactions, or for decades nothing will change?

Can we go into a shop and pay with Bitcoins? Are transactions conducted through Bitcoin payments? Will this happen soon? I don't think so.

And this looks similar to the already mentioned dot coms bubble, in my opinion. Again, selling clothes through the internet was definitely the future of shopping. Would this have happened soon? It depends on what "soon" means to you, probably.

What do you think?

Dec 5, 2017

Hi Biriyo Neru, any of these discussions helpful:

  • Blockchain Technology & RE WSO, I'm sure everyone has heard of the recent Bitcoin craze or made a few bucks dabbling in ... it. Outside of Bitcoin, blockchain technology does create some disruptive opportunities. Specifically ... definitely some holes in the theory, but it actually seems like it could be possible. Blockchain Technology ...
  • Why the question "Is Bitcoin in a bubble?" is not the right question to ask. I was talking to friends recently and though they love Bitcoin and the blockchain, they think ... Bitcoin is in a bubble. I don't think that's really a relevant statement. The prices of Bitcoin ... causes the value of blockchain to decline. This means that the only way blockchain wo
  • Blockchain Technology spreadsheet and you have a basic understanding of the blockchain. Information held on a blockchain exists as ... -based applications. Personally I think the system of blockchain is amazing, and will be a major disruptor in the ... Hopefully everyone has heard of blockchain by now, but if not you may want to read up on it. ...
  • Studying cryptocurrency: great idea or waste of time? worth to spend time learning cryptocurrencies and everything around (blockchain, bitcoin...). This is ... how it works. Do you think cryptocurrencies will become more and more important in the future and do ... you think it's a good investment to spend hours studying the matter? Thanks ...
  • End of Bitcoins on 18th December 2017 Bitcoin will become worthless on 18th December 2017 when Bitcoin futures start trading. 4% of ... bluffing: Over the top statements against Bitcoin from the likes of Jamie Dimon about "firing anyone ... hedge funds are gonna make a shit ton of money on the 18th, they have played the masses. Bitco
  • Is $$$Bitcoin$$$ The Next Tulip Bulb Or The Next Dell? Bitcoin was only 0.0001 USD on June 2009; after that, the price of Bitcoin rose to 0.07 USD a year ... of PayPal. Earlier this year, probably late to the party, I heard about Bitcoin again at a local ... poker game; then, the price of one Bitcoin was ~3,000 USD. I immediately headed home to do my research. ...
  • Some Thoughts on Bitcoin, Part 2 There has already been enough mainstream adoption of the blockchain to drive Bitcoin along with it. So, ... These recent price swings came as a result of people using Bitcoin to facilitate the transfer of Yuan ... exchange, I would use blockchain.info. It's the original home of the
  • More suggestions...

If we're lucky, maybe these professional users will respond: @Chip1321 @RichardBooty @RichardBooty

I hope those threads give you a bit more insight.