Bitcoin’s Crypto Bubble, Thanks to Facebook Libra
Today, we’re not going to talk about Trump, China or the Democratic debates.
The reason: I’m plumb Xi’ed out. I’ve got no more Trump in the tank, and it’s far too early to worry about what the two million candidates running for the Democratic nomination are debating right now.
Besides, bitcoin (CCC: BTC-USD) is where this week’s real hotness is for investors.
The world’s most popular cryptocurrency has experienced a second awakening in 2019, rallying more than 200% this year.
It’s hard to believe that analysts around the world were calling for the end of bitcoin back in December, when the cryptocurrency bottomed out near $3,500. It’s like they deliberately called a bottom.
But just this past week, bitcoin once again topped $13,000, coming just shy of all-time highs.
And then, just as quickly as it came, the rally fizzled. OK, not fizzled, but it did hit a major roadblock.
Bitcoin is down nearly 9% today, bringing back that classic cryptocurrency whipsaw activity we all know and love. You know you wanted this volatility back; it’s been far too quiet for cryptos this year.
The biggest factor driving bitcoin’s volatility is Facebook Inc. (Nasdaq: FB). The social media company announced that it’s launching its own cryptocurrency called libra.
Facebook believes that libra will bring financial transactions to more than 1.7 billion people without bank accounts. What’s more, libra will be easily accessible to the roughly 2.3 billion monthly active Facebook users.
That’s a massive shot in the arm for cryptos from a sentiment and acceptance standpoint. But it also means a bubble is brewing.
I’m going to give Ian King, Banyan Hill’s resident cryptocurrency expert, the last word on this one. The following is an excerpt from Ian’s latest article on Facebook’s libra and the impending crypto bubble:
We’ve seen this movie before.
Every few decades, we utilize the technology du jour to devise a scheme to create more credit under the guise of less risk. Our mantra is always: “It’s different this time.”
But it’s never different.
It wasn’t different in 2008, when the housing bubble burst…
It wasn’t different in 2000, when the dot-com bubble burst…
It wasn’t different in the late ’80s, when savings and loans were collapsing left and right…
And it won’t be different this time. It will be fun on the way up and painful on the way down.
Sound advice, Ian. And if you’d like more sage investing advice on the crypto market from Ian King, click here now!
The Good: Home Is Where the Profit Is
The housing market has been all over the place this year. This past week, we learned that new-home sales have fallen for two straight months. But this uncertainty hasn’t stopped KB Home (NYSE: KBH).
The little homebuilder that could reported Street-beating earnings and revenue last night, surprising analysts across the board.
Seriously. Raymond James, which downgraded the stock earlier this month, has egg on its face now.
KB also painted a rosy picture for the second half of the year, citing double-digit order growth across the board. If the Fed cuts interest rates next month, that picture could get even better.
There’s enough uncertainty out there that you might not want to jump in right this second, but certainly keep a close eye on KBH.
The Bad: Learning to Fly
The Boeing Company’s (NYSE: BA) 737 MAX was learning to fly. But, thanks to the Federal Aviation Administration (FAA), it ain’t got wings.
The FAA has once again grounded hopes for the 737 MAX, ruining the positive lift BA received after the Paris Air Show.
According to Boeing, the FAA wants the company to address “a specific condition of flight” in the 737 MAX.
A specific condition of flight … like … staying in the air? Is there another condition of flight? Personally, staying in the air until you specify that you don’t want to be in the air anymore is the only “condition of flight” I’m concerned about.
BA shares are down about 2.5% on the setback and have fallen more than 20% since February. Investors should be aware that this could be a long descent for BA, proving once again that coming down is the hardest thing.
The Ugly: Casualties of American Health
Processed and packaged foods are on the way out. It’s like Americans aren’t even trying to live up to international stereotypes anymore.
Conagra was the latest in this line of processed-food makers to miss earnings targets.
The company makes household brands such as Hunt’s, Duncan Hines and Slim Jim. According to Conagra: “Several discrete items negatively impacted top-line growth.”
Slim Jims might be discrete, but they definitely aren’t discreet. Have you ever snapped into one? So not discreet. (Don’t you just love English?)
Like other prepackaged and processed brands, Conagra is turning to healthier alternatives, snapping up Pinnacle Foods earlier this year. Pinnacle makes its own brand of plant-based meat alternatives.
Sales for Pinnacle soared 32.9% on the quarter, giving hope for Conagra’s future. That said, turning around a company famous for beef jerky and canned spaghetti could take a while.
It’s been about a month now, and you’re still here! Of course you are — where else are you going to get Great Stuff?
I just want to say thank you and let you know that I’m glad you’re enjoying the content. A few of you have already reached out to GreatStuffToday@banyanhill.com to let me know how much you like Great Stuff, including K. Willard: “Good sense of humor and interesting info.”
As you can see, K. gets right to the point.
Some of you have issues, however, like Jerry from Nebraska: “My broker keeps telling me to sell and preserve capital. So, I did, and again and again and again. In fact, I’ve saved so much capital that I don’t have any left.”
We have issues here at Great Stuff as well (we’re writing this crazy e-zine, after all), but broker issues are nothing to laugh at. Preserving capital is one thing, but if it’s keeping you from making money in the market, that’s bad.
There’s always a way to make money in any market. Just ask Banyan Hill expert Paul Mampilly. He has the inside track on a new mega trend that could be just what you’re looking for. Click here to find out more!
Like Dollars for Data
I’ve ranted on Great Stuff before about the price we’re all going to pay for the rise of Big Data.
(If you missed it, click here.)
But we’ve never really talked about the price that Big Data squeezes out of you.
Remember, if you aren’t paying for a product such as Facebook or Twitter, you are the product.
The question is: How much are you worth to them?
If you could charge Facebook or Google for the data they collect on you, how much would that be worth?
Inspired by a new bill making its way through Congress, Banyan Hill expert Ted Bauman recently took a deep dive into this topic.
The so-called DASHBOARD Act would force the Facebooks and Googles of the world to tell you exactly what data they collect and how much it’s worth.
If we’re going to be bought and sold online, they at least owe us the dignity of telling us how much we’re worth.
Want more on this topic? Check out Ted’s article: Big Data Regulations Reveal Profits From Your Privacy.
Until next time, good trading!
Great Stuff Managing Editor, Banyan Hill Publishing