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piperjaff
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I have an interest in auction houses and insurance companies.
  • Alternative Currencies: Where There's Smoke There's Fuego! 0 comments
    Mar 21, 2014 4:12 PM | about stocks: OSTK

    Alternative currencies are picking up steam as we can see from the increasing market caps of these assets. This also includes at events like Coin Summit 2014 in San Francisco, CA. An interesting phenomenon took place at the beginning of the Bitcoin craze, it exploded upward in value. Today it's being used by hedge funds, stores and 45,000 online commerce sites around the world. It's also exchanged for cash in minutes at places like Coinbase, a company funded by top Silicon Valley venture capitalists such as Marc Andreessen, founder of Netscape, on of the most successful IPO's in the history of Nasdaq.

    What needs to be understood here is that during the financial crisis of 2008/09 a flight-to-quality took place away from the banking system and away from standard asset classes including stocks, bonds, oil, commodities, etc and into alternative currencies like Bitcoin. Back then, people lost confidence in the banking system. Iceland's banking system collapsed. Which, by the way, is the reason why the alternative currency, Auroracoin, is being issued to the 300k+ population of Iceland. Others include Litecoin, Songcoin, Vertcoin and Ripple.

    People do not trust traditional assets as much as they used to. They do not trust traditional banks. This results in the continuing flow of money from those corrupt and untrustworthy old-world systems to new alternative currencies that are coming into existence today with Bitcoin having paved the way.

    There are number of different ways to position or hedge with stocks related to alternative currency such as with Overstock.com ($OSTK). Many other value plays may come to the fore as time goes on, so this is a sector definitely worth watching.

    During the next Black Swan event or downturn in the economy, the same thing will happen but in a much bigger and broader way, even more money will flow into alternative currencies as a safe-haven.

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