Fraud Stamp Bulletin — January 2021
The standout investment class without question in 2020 was cryptocurrency. And within cryptocurrency there is one star that shines brighter than all others, bitcoin. Not only is bitcoin smashing all previous highs, a feat few thought possible at the beginning of 2020, but bitcoin’s market dominance is up to around 70% at the time of writing. Combined with Ethereum, both coins represent over 80% of the total market cap of all listed cryptocurrencies.
In 2020 bitcoin finally achieved mainstream investment status gaining respectability among blue chip companies and institutions. The biggest news was PayPal entering the market. Their cryptocurrency platform was opened to all its US customers in November. Considering the 350 million PayPal users there is going to be huge pent up demand waiting to hit the market as demonstrated recently by its $242M of cryptocurrency sales achieved in only one day. According to a recent survey there are now over 101 million owners of cryptocurrency. With this unfulfilled demand and bitcoin’s legitimate status as a challenger to gold the market rally isn’t over just yet, despite a small recent correction.
READ OUR ARTICLE HERE — HAS CRYPTOCURRENCY GONE MAINSTREAM
One worrying observation from last year was that some investors were borrowing money to buy bitcoin. We must all remember that bitcoin is no different to the many investments that have gone before. Never borrow to buy a risky asset. Only invest what you can afford to lose and restrict your ownership to less than 5% of your overall investment portfolio. Remember the words of Sir John Templeton “The four most costly words in the annals of investing are ‘This time is different.’”
READ OUR ARTICLE HERE — SOLVING THE BITCOIN DILEMMA — SHOULD INVESTORS BE BORROWING TO BUY BITCOIN?
The majority of scams we are seeing are crypto related. From, send us money and we will pay you a return of 5% per month to crypto exchanges which blatantly just steal your crypto and or cash. By heeding our advice of only dealing with regulated exchanges in your country of jurisdiction and avoiding the unregulated or the ones regulated out of Kazakhstan you have reduced your chances of being scammed by 90%.
Whilst on the subject of scams check out our video ‘Giving the Scammer a Kick in the Groin’. Discover what is hot right now, Who the scammer is targeting and with what. From student loan scams to government grants, from corona virus scams to foreign exchange. And discover how you can combat and send the menace packing with a stiff kick to the groin.
WATCH GIVING THE SCAMMER A KICK IN THE GROIN
XRP is Dead!
In December the Securities Exchange Commission, the US financial regulator, lodged a complaint against Ripple, the fourth largest cryptocurrency by market capitalization. The SEC alleges that Ripple’s cryptocurrency XRP is a security and the $1.3B raised through an ‘ongoing ICO’ was an unregistered sale of securities. This isn’t a surprise to anyone. The industry knew this was coming. What is a surprise is the fact that XRP’s price hasn’t taken a bigger hit yet. At the time of writing the price sits at $0.30 but with a market cap of around $14B there is further to go. If you hold XRP as a long term investment we would say that the odds are not in your favor! With potentially $1.3B in restitution and a fine which could be a similar amount this cryptocurrency is likely to end up a shadow of its former self. The fact that the founders have liquidated some $600m of their own holdings also suggests that they are in this for the fast buck. Coinbase have announced that they have halted trading in XRP, others have followed. When buying any tokens/coins first check to see what their rating is with the Crypto Ratings Council (www.cryptoratingcouncil.com). Amazingly XRP had been rated as a 4 out of a possible 5 which meant it was considered to be highly likely a security.
READ THE ARTICLE XRP — A DEAD COIN WALKING?
Stable Coin Developments
In January 2020 Tether had a market cap of $4bn. That figure now stands at $24B commanding 76% of the stable coin market. Facebook announced in November 2020 that it was changing the name of its own stablecoin project from Libra to Diem. It plans to launch this year subject to gaining approval from the Swiss financial regulator as the organisation behind the coin is based in Switzerland. This however is only the first step, they will still have to obtain all the necessary licences in the US before they can allow US customers to buy. It does appear that the government is taking an extra interest in stable coins with a new bill presented to congress which would require stable coin issuers to secure bank charters. Legislation is a few years away yet. Investors should ensure they are not holding Tether when that time comes because with their current problems and history it is highly unlikely the US or any other developed world regulator would grant them a stick of candy not alone a licence! It is interesting to note the regulated exchange Coinbase do not offer a market in Tether although they did offer a market in XRP which was a big mistake.
READ THE ARTICLE TETHER — A POTENTIAL DISASTER WAITING TO HAPPEN
ENROLL ON OUR FREE CRYPTOCURRENCY COURSE: SERIOUS CRYPTOCURRENCY — FROM BEGINNER TO PRO
The Next Big Thing?
How many times have you heard this phrase before? The .com revolution, bio fuels, online gambling, green energy, carbon credits, blockchain and now the latest, marijuana. When I mentioned this investment opportunity to my aging mother she assumed I had lost my mind and moved over to the dark side. The fact is marijuana is a genuine opportunity. There are two countries in the world right now where marjuana is legal: Canada and Uruguay. A third is set to join them, Mexico. But the big opportunity lies in the USA where many of the states have legalised its use both for recreation and medical. It is predicted New York could be next up in 2021. But the biggest potential rests with the US government legalizing it on a federal basis. Many of the ‘pot stocks’ have already factored this eventuality into their valuations after the Biden victory as his party is on the side of marijuana legalization. It is definitely an exciting area to explore further. With that said we have wrote an in depth article on the subject which you can read here:
READ OUR ARTICLE: A SIMPLE GUIDE TO INVESTING IN MARIJUANA
And for those of you interested in a short course on the same subject enroll on our free course below
Too Good to be True
The days of the stock scam didn’t die when the infamous Jordan Belfort was wrestled to the ground by the FBI. No, it is alive and well. But with most things in life the scammer must adapt or die. No longer does he run boiler rooms out of Long Island or Bangkok. He has to be a whiz on social media for this is his new weapon. Social media and online marketing through the likes of Google and Facebook has been a blessing for our enemy the scammer. His overhead is a fraction of his predecessors and his geographic reach is only limited by his willingness to use Google translate. Investing in a startup or a company with exciting prospects has always been tempting from the days of The South Sea Company back in the 1700s. The challenge now for the scammers is to get the ‘target’ on the phone to close him or her. The way he does that is by advertising through various channels to generate leads which he then calls up with the intention of closing the target or making the sale. The leads and the close are the essential part of any scam. So when we spotted the words ‘A 10,000% Return on Investment Opportunity’ on a Google ad it confirmed our thinking. The scammer is still alive and well and probably busier than ever with everyone sitting at home with time on their hands and money to burn. Especially in the times of the pandemic don’t be tempted by these attention grabbing headlines.
No Financial Advice
This article does not constitute financial advice in any way. The article should be treated as supplementary information to add to your existing knowledge