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CryptoOracle Co-Founder: Bitcoin Is Functionally Better Than Gold

“Some Gold Users Will Likely Switch To Bitcoin”

Gold is one of the most valuable metals on Earth, with humans finding value in such an element for thousands of years. Over the course of gold’s history, it became a great way for individuals and groups to store value across a variety of settings, countries, and eras. However, with the advent of the internet and the subsequent introduction of Bitcoin, some proponents of digital technologies believe that gold’s time as the primary global store of value might be up.

Bitcoin has long been likened to gold, with many analysts and industry on-lookers alike drawing connections between the inherent nature of the two assets. Some have even called this emerging asset “digital gold,” due to the similarities it shares with the “original” gold.

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Yet, Lou Kerner, a co-founder and partner at CryptoOracle, has come out to vehemently state that Bitcoin actually may one-up gold in certain areas and qualities, while still complementing gold for its importance to human history. Speaking on CNBC’s crypto-focused “The Coin Rush” segment, Kerner stated:

Gold has emerged as the global store of value and it has held that position for literally a couple thousand years — that’s an awesome run. So we now we have something (Bitcoin) that we think may be functionally much much better (than gold). So we expect that over time — not in a day, not in a week, not even in 5 years, — for some of the people using gold as a store of value to switch to Bitcoin.

This statement highlights two interesting points about Bitcoin’s role as a form of “digital gold.” Firstly, that Bitcoin may be inherently better than gold. While the CryptoOracle executive did not mention any specific values/features, it can be assumed that he sees Bitcoin’s ease-of-use, immutability, digital nature, and more as a reason(s) why some would prefer to use it over gold.

Secondly, the fact that the foremost crypto may begin to eat at the market share that gold has carved out for itself over thousands of years. As reported by Ethereum World News, Gabor Gurbacs, the director of digital asset strategy at VanEck/MVIS, claims that Bitcoin could be worth upwards of $20,000 a piece if the asset can succeed as digital gold. Gurbacs explained his prediction, stating:

Investors do refer to Bitcoin as a form of digital gold and gold today has around $7 trillion outstanding. If you take, say, 5 to 10 percent — I’ll let everyone do the math — Bitcoin has upside. Bitcoin is used as digital gold today. It’s a de-risk asset. Basically if someone wants to outlay systematic risk, then one would go to access gold or digital gold.

Back to the aforementioned CryptoOracle co-founder, who closed off his segment on CNBC, comparing Bitcoin to the “so-called” junk bond, as both assets were not accepted upon their arrival. In the case of the junk bond(s), it took 40 years to become a normal tradable asset/contract on the market. As Kerner alludes to, for Bitcoin, it might be much of the same, as it may take years to convince those who are hesitant to change that cryptocurrencies (and blockchain) are the next big thing.
Image Courtesy of Michael Steinberg @ Pexels

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Crypto Market Sees 3% Pullback After A Short-Term Recovery

As Tuesday rolled around, many traders thought that the worst was yet to come for the market, with critics expecting Bitcoin to chip away at the $5,800 support as the week continued. For those who are unaware, the $5,800 level has been continually cited as a strong line of support, with analysts highlighting previous bounces around this price, along with an amassment of technical indicators.

But to the surprise of some, on Tuesday, the crypto market began a slow recovery of its recently-established year-to-date lows.

From $190 Billion To $220 Billion — The Market Recovery

The valuation of all cryptocurrencies recovered from a low of $190 billion to $220 billion within a three-day timespan, with this move restoring faith in an otherwise bearish market. A majority of cryptocurrencies saw strong gains throughout the past three to four days, with Bitcoin taking a cautious move from $5,950 to $6,600 that was backed by consistent volume.

But with this move, altcoins have seen an unexpected resurgence, with Bitcoin dominance taking a three percent dive even as the market continued upwards. As reported by Ethereum World News, cryptocurrencies like Nano (NANO), VeChain (VET), and Populous (PPT) all saw staggering gains of 30% or more, which was quickly attributed to the decreasing Bitcoin dominance figures. Traders saw their portfolios turn green overnight, and a slight sense of FOMO (Fear of Missing Out) return to the minds of optimistic traders.

However, some industry leaders aren’t convinced that the bear market is over yet. Susquehanna’s head of digital assets, Bart Smith, recently claimed that this recovery, albeit relatively strong, could just be a “bear market rally.” This sentiment was doubled-down by Dan Nathan, a CNBC trader and Fast Money panelist, who also agreed with what Smith had to say.

While Arthur Hayes, the CEO of BitMEX, still expects Bitcoin to reach and establish a low of $5,000 before eventually continuing to new all-time highs. Moreover, some analysts expect that this is a “dead cat bounce,” where the price(s) of a publicly-traded asset sees a quick recovery after a downtrend, only to fall further at a later date.

“Too Much Of A Good Thing Is A Bad Thing”

Attesting to this bearish sentiment, on Saturday, traders were reminded of the age-old saying — “too much of a good thing is a bad thing” — as the market experienced a slight pullback after the aforementioned recovery.

At the time of writing, Bitcoin is currently down by 2%, with altcoins posting similar losses. It remains to be seen whether the market will continue to head lower in the near future, but according to the traders on CNBC Fast Money, the technicals on Bitcoin’s chart has begun to show signs of weakness. CNBC analyst David Seaburg stated:

“Look at just the charts, without any other knowledge, it looks like its going lower. The technical set-up right now for Bitcoin does not look promising in my eyes.”

Michał Mancewicz

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Consumers Have Lost Almost $100 Million To ICO Exit Scams

A common criticism that onlookers have for the cryptocurrency industry is that it is rife with scams and criminal wrongdoings. While this is often an unwarranted blanket classification of this nascent industry, research done by Diar, a weekly fintech-focused publication, claims that there are still some bad actors present in this industry

According to last week’s Diar report, ICO exit scams have raked in approximately $96.8 million in the past two years. While this is a staggering figure in and of itself, it was reported that approximately 70% of these funds were stolen within the past two weeks, with the culprits being four different projects run by two ‘firms’.

The first firm is Shenzhen Puyin Blockchain Group, a shady crypto-centric firm based in China’s Guangdong province, who reportedly ran three scam ICOs — ACChain, BioLifeChain, and PuyinCoin — which raised over $60 million in funds collectively.

As pointed out by eagle-eyed users on Reddit, the office in which the teams of the three aforementioned ICOs were supposed to be in remains empty, clearly indicating that something shady had occurred. Eventually, as news of this scam spread, the State Market Regulatory Administration (SMRA) of China caught wind of these projects and the company behind it.

The second firm was NVO, who raised nearly 3000 Bitcoin to ‘build’ a decentralized exchange and cryptocurrency wallet before disappearing altogether.

While the publication didn’t go into much detail about the other 10 scams listed, there was one that stood out, this being Block Broker. Ironically enough, Block Broker was founded in a bid to “completely eliminate ICO fraud by creating a 100% safe investment environment.”

It all seemed well and good, with ICO review sites like TrackICO, posting a multitude of raving reviews for the project. However, when it was revealed that the likeness of the project’s CEO was nothing but a stolen photo, it became evident that BlockBroker was a scam posing as a scam “eliminator.” Sadly, by the time the expose occurred, it was too late, with the figures behind the project running away with $3 million.

As the publication notes, the use of “fake profile pictures” is a common practice with exit scam projects, along with the plagiarism of promotional materials and whitepapers, which should be focused on showing a token or project’s worth instead of the malicious action of copy and pasting.

Although these projects — or scams more accurately — are clearly in the wrong, the aforementioned report notes how the incentives around an ICO offering are inherently flawed, writing:

“Unsurprisingly, the blatant exit scams continue to plague the largely unregulated ICO sector where the founders have no contractual obligation to deliver a product. After raising millions of dollars with no string attached, the founders’ incentives to actually build a valuable company are very limited.”

While this is a powerful statement by itself, as it clearly highlights the issue with the ICO crowdfunding structure, to add insult to injury, the report drew attention to yet another issue in the following statement:

“Even if the founders were to build a valuable venture, it’s unclear at best whether the price of the utility token would reflect the success of the company.”

This statement brings a much more fundamental issue to light, where cryptocurrency projects can be often overvalued, as investors seek to make

Despite the theory that scams are likely a minority in the ICO pool, as Ethereum World News has reported, many projects which are operated in good faith fail to meet promises touted in their whitepapers, including claims of decentralization.

While this issue may be starting to subside, with the development of blockchain technology pushing forward at a relentless pace, the aforementioned problems with the ICO structure still prove to be a problem in today’s cryptosphere.

Photo by Fancycrave on Unsplash

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Tether Prints 50 Million USDT, The Controversy Continues

Tether is the project that you either love, hate, or know nothing about. For individuals falling into the latter category, here’s a quick overview of this often controversial topic.

Tether Remains A Controversy 

Tether is a stablecoin that is inherently tied to the value of one U.S. dollar and is reportedly backed by legitimate reserves. Many use USDT as a method to find solace in a bear market, as you can trade your altcoins/Bitcoin into Tether, in an act fittingly named “tethering”, to maintain the dollar value of your holdings.

Despite the fact that USDT has quickly become the 9th most valuable project in the industry, many remain skeptical about the funds behind the project, as the Tether organization has been slow to procure the documents that show that it holds $2.5+ billion in its reserves. While the Tether organization, which has been linked to Bitfenix’s leadership team, fired its auditors earlier this year, it has since shown some evidence to suggest that there are funds that back 100% of USDT tokens.

Although the fears around its USD reserves may have subsided, USDT has still remained a primary topic of controversy within the cryptocurrency community.

As reported by Ethereum World News, researchers claim that USDT was used to push up the price of Bitcoin throughout 2017. According to the research paper, which hailed from the University of Texas, the stablecoin was used to artificially inflate the price of Bitcoin following (or during) a sharp decline.

Not only do fears of manipulation surround the project, but so do technical concerns. According to SlowMIst, a Chinese crypto-centric cybersecurity team, an unnamed exchange falsely accepted 694 USDT tokens in a “double spend” attempt. Following this revelation, the community went into a panic, with some believing that the whole Tether ecosystem would come crashing down. However, as addressed by well-known exchanges and an Omni developer, this issue should not affect all USDT tokens, as this was just a case of “poor exchange integration.”

While the aforementioned fears have since been addressed in some capacity, the project remains as one of the most contested topics in the cryptosphere.

Kaching! Tether Prints 50 Million USDT

On Saturday morning, the Tether organization issued $50 million new USDT tokens amidst a bearish market. This information comes via the Omni block explorer (Omniexplorer), which helps track Omni-based assets, such as USDT tokens. With this move, Tether now has a $2.4 billion market cap, which has brought it to become the 9th most valuable cryptocurrency.

During a previous Tether issuance, Charlie Lee, a well-known cryptocurrency personality and founder of the Litecoin project, pointed out that the printing of USDT likely is a bullish sign.

But this time around, the market continued lower instead of seeing a healthy 2-3% move upwards as prices normally do, which surprised more than just a few investors.

Photo by Jeremy Paige on Unsplash

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Bitcoin Fends Off Further Decline, But An Analyst Says Its “Game Over”

As reported by Ethereum World News on Wednesday, Bitcoin fell to a near-monthly low at $6,200 as the market reacted to the SEC announcement regarding the VanEck-backed ETF. Despite the fact that the state of the market looked dismal, with altcoins bleeding out en-masse and selling pressure ramping up, for now, Bitcoin has staved off a further decline.

On Thursday morning, the cryptocurrency market saw a nice influx of buying volume, with Bitcoin quickly recovering by 3% and altcoins following closely behind. At the time of writing, Bitcoin has currently found a ‘home’ at $6,475 and seems to be holding at this level for the time being.

As aforementioned, altcoins followed the foremost digital asset, with cryptos like XRP and Bitcoin Cash (BCH) actually outperforming Bitcoin by upwards of 1%.

Some investors remain hopeful, with Dan Morehead, the CEO of Pantera Capital, stating that this most recent pullback was just a market “overreaction.” Speaking with CNBC Fast Money, the executive of the crypto investment fund drew attention to the “real-time price feed” which is unique to this fledgling industry.

Adding more on what this meant, Morehead noted that investors often overreact to news, as global traders seek to speculate on how an announcement or decision will affect the price of a crypto asset. The CEO went on to add that Bitcoin could be set to see a longer-term growth figure, as a result of the NYSE’s parent company launching a brand new cryptocurrency platform.

Analysts: Bitcoin Could Head Lower, The Bear Market Isn’t Done Yet 

However, not everybody is on Morehead’s side of the fence, with multiple technical analysts stating that the worse has yet to come for Bitcoin. Issuing a note to his clients, Jeff DeGraff, the head of technical research at Renaissance Macro Research, outlined why Bitcoin remains bearish. The analyst wrote:

“Parabolic moves are notoriously dangerous for short‐sellers … Usually, a top develops that often appears as a descending triangle over months, with reduced volatility and little [fanfare]. Once the top is complete on the support violation, the security in question can often be considered permanently impaired or even ‘game‐over’. We are of course referencing Bitcoin as exhibit ‘A’ in today’s market.”

While the well-respected technician did not give a clear price prediction for the price of Bitcoin, it has become apparent that the asset looks more bearish than it does bullish.

This sentiment was echoed by Mike McGlone at Bloomberg Intelligence, who noted that Bitcoin is “poised” to move even lower, as Bitcoin bulls have seemingly receded into the shadows. In an interview, the Bloomberg analyst stated:

“Bitcoin is in dump mode, following the pump run-up on the potential for a U.S. ETF. It (the dump) may not subside until revisiting good support near $4,000 — last year’s mean.”

Closing off the interview, the analyst called this year’s correction “tame” in comparison to previous bear markets, where Bitcoin often saw upwards of an 80-85% decline.

Photo by Rhett Wesley on Unsplash

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Breaking: Winklevoss Bitcoin ETF Gets Rejected Yet Again

It was just announced that the most recent proposal for a Bitcoin ETF from the Winklevoss Twins, the owners and founders of the fittingly named Gemini exchange, was just rejected by the SEC.

Old News Rehashed, Or Something Entirely New?

At first glance, many saw this as another bout of old news that was reposted by mainstream media. Charlie Shrem, a legend in cryptocurrency circles, took to Twitter to write:

This is old news, While I think Cameron and Tyler would have run one of the better ETF’s, The new ETF excitement came from the fact that CBOE filed their own Bitcoin ETF. The SEC would rather grant an ETF to an existing institution over a new one.

However, according to the news broken by CNBC just one hour ago, the SEC has now rejected the permitted revision of the ETF proposal, that was originally rejected in 2017. According to the regulatory body’s new statements, there were issues with fraud and investor protection in the revised proposal, resulting in a denial from the SEC. Additionally, the SEC noted that there were high levels of manipulation in cryptocurrency markets, which are conducted primarily by “unregulated” markets that exist overseas, away from the prying eyes of U.S. regulators.

The vote for the Winklevoss-backed ETF was reportedly three against, and one for the ETF, not most welcome showing cryptocurrency proponents looking in on this decision.

Cryptocurrency Prices Immediately Drop Following The Announcement 

As a result of this announcement, the market immediately took a dive, with Bitcoin seeing a rapid $300 drop to the ~$8,000 price level. Altcoins followed close behind Bitcoin, posting similar percentage losses in comparison with the foremost cryptocurrency.

It is currently unclear how this ruling will affect the upcoming verdict with the CBOE-backed ETF, but many are still hoping for the best, as it was made clear that the verdict regarding the VanEck/CBOE proposal is still in the works.

Many see a Bitcoin ETF as the key to widespread adoption, and as BitMEX’s CEO puts it, $50,000 by the end of the year, so it would be advantageous for an ETF proposal to eventually garner approval from regulatory bodies.

This is a breaking news story, so Ethereum World News will be sure to keep you updated as this situation develops further.

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CNBC Fast Money Speaks On Bitcoin Run-Up And Stellar’s Astonishing Week

On Friday, CNBC’s “Fast Money” show has continued its coverage of the cryptocurrency market, recapping the past week’s crypto price action, namely the Bitcoin and Stellar run-ups.

“Currency War” Could Push Cryptos Higher

The past seven days have been generally bullish for the cryptocurrency market, with Bitcoin seeing an over 15% move to the upside, with many altcoins following closely behind. Despite staying relatively stagnant over the past 2 to 3 days, with Bitcoin holding and altcoins taking a slight hit, some cryptocurrency analysts think that this is a bullish sign.

Despite not physically being present, Brian Kelly, CNBC’s in-house crypto expert and CEO of the blockchain-centric BKCM investment firm, issued a message to the Fast Money hosts regarding this week’s price action.

Holding a bullish tone, Kelly wrote:

The character of the market appears to have changed. For most of this year, every rally was met with aggressive selling, that has changed over the last 2 weeks.

Essentially, Kellly believes that if Bitcoin can hold key resistance levels for extended periods of time after a run-up, it is a bullish sign. Kelly also went on to explain that a potential for a “currency war” could be a “tailwind” for Bitcoin moving forward.

For those who are unaware, the U.S. President Donald Trump recently made a series of orders that put trade restrictions on a variety of U.S. trading partners, making some believe a “currency war” is inbound, resulting in a higher level of financial imbalance between nations.

This financial instability and uncertainty could spark a growing need for a financial safe haven for investors in the near future, with Bitcoin filling that need perfectly as “digital gold“.

Brian Kelly Speaks On The Stellar (XLM) Project 

As reported by Ethereum World News previously, the past week saw XLM take off, easily outperforming a majority of altcoin projects, rising from 20 cents to 30 cents within a week. This enormous price move was attributed to an influx of positive news regarding the project, namely IBM’s use of a Stellar-based stablecoin and the potential addition of XLM to Coinbase.

As a result of this bullish price action, Stellar’s collective market cap surpassed Litecoin’s, with the former becoming the 6th largest cryptocurrency in the entire industry. Kelly also expressed his thoughts about Stellar’s run-up in the aforementioned message, writing:

Stellar is both a currency and a platform, so it makes sense that it is more valuable than Litecoin. The partnership with IBM is very interesting and could add even more value as they build more products on the Stellar platform.

Another host on the Fast Money panel doubled-down on Kelly’s apparent bullish sentiment regarding XLM, stating that there could be a “capital flight” from XRP to Stellar in the near future, citing the reason of Stellar’s use case as a viable transactional tool.

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Bitcoin (BTC) Down 4%, Crypto Markets Lose $10 Billion In an Hour

In a period of not more than an hour, something unusual has happened in the cryptocurrency markets. Looking at the top coins, we find that they have all suffered some considerable amount of decline in the same amount of time. Bitcoin (BTC) is currently down 3.74% and currently trading at $6,469. The King of Crypto seems like it is going to continue with the decline at the moment of writing this.

Current Bitcoin decline. Source, coinmarkecap.com

Etherem (ETH) has also not been spared. The King of Smart contracts is currently down 7.34% and currently trading at $500. Ripple (XRP) is also down 4.77% and is currently trading at $0.51. Bitcoin Cash (BCH) seems to be headed back to levels below $800 and is currently trading at $823.

Tron (TRX) which has an Independence Day in less than 3 days, is also down 6.79% and is currently trading at $0.0456.

Looking at the total market capitalization, earlier on today, the levels were at $282 Billion. The value has since dropped to current levels of $270 Billion indicating a loss of $12 Billion in the same period of not more than an hour.

Ongoing decline in the Crypto Markets. Source, coinmarketcap.com

So what exactly is going on?

One theory is that there was a delayed response to the BitHumb hack. At first, the global crypto traders stood their ground as the hack was announced two days ago on the 20th of June. However, news reaching Ethereum World News indicate that the South Korean government wants to get to the bottom of the two hacks of Coinrail as well as Bithumb.

The government notice of the investigation states that:

The Ministry of Science and Information and Communication Technology (hereinafter referred to as ‘Science and Technology Ministry’) and the Korea Internet & Security Agency (KISA) said that they are investigating the cause of the accident caused by the virtual currency leak that occurred in Coinrail and Bithumb.

The further declaration of investigations by the South Korean government through the Ministry of Science and Information and Communication Technology and the Korea Internet & Security Agency (KISA), could have caused a lot of South Korean traders to start cashing out and hence the current decline this Friday.

Preliminary reports indicate that several South Korean exchanges lack proper security measures for their exchanges. According to the ministry, 17 companies had a ‘system access control deficiency’ while 16 had ‘insufficient network isolation’. They also noted poor management of crypto wallets by several exchanges. The Ministry plans on intensifying their investigations and security scrutiny of the exchanges in the country.

The noted security deficiencies could be to blame for traders cashing out of exchanges en masse to storing their funds in hardware wallets or other more secure exchanges and wallets.

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Ripple’s (XRP) Exec Elected To A Federal Reserve Taskforce

News reaching Ethereum World News indicate that Ripple is making major strides with their Head of Research on the Business Development team, Ryan Zagone, being elected to the Federal Reserve’s Faster Payments Task Force Steering Committee. The Steering committee is a 16 member team to represent the working group’s numerous stakeholders.

This task force by the Federal Reserve, was launched back in 2015. It has focused on identifying goals and attributes of effective faster payment systems; proposing solutions and assessing their capability to achieve those goals; and championing the payment industry to take steps toward implementation and adoption of faster payments capabilities. Its core vision is to call upon the different stakeholders to come together to realize the vision of a payment system in the US that is faster, ubiquitous, broadly inclusive, safe, highly secure, and efficient by 2020.

The task-force has already met 252 times through regular meetings ad teleconferences and spent over 120,000 hours doing so. The current participants number 321. This is why Ryan Zagone’s election as a member of the steering committee, is a huge step forward for not only Ripple, but for the payment system envision by the Taskforce. Zagone will be a voice of the technology and non-bank service provider sector.

At Ripple, Ryan Zagone works with financial institutions, regulators and the central banks the company has partnered with to date. This then makes Ryan the best candidate to relay his experience with respect to improving banking infrastructure as well as accelerating the adoption of faster payment settlements globally.

Ryan had this to say about his election:

It’s a privilege to be selected. I look forward to leveraging Ripple’s global experience as the task force assess ways to increase speed, efficiency, access to, and competition in payments.

I will continue Ripple Labs’ constructive approach in working with peers, bank partners, and the broader financial industry—including NACHA, IPFA, and the W3C.

Above all, I am committed to being an open and inclusive presence on the task force, representing the priorities and concerns of fellow non-bank service providers.

Congratulations to Ryan Zagone and the entire Ripple company on this new achievement and milestone.

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‘Crypto Markets to Reach $20 Trillion Value,’ says Billionaire Investor Mike Novogratz

In an interview with Bloomberg, Billionaire Investor Mike Novogratz made a bold statement about the direction of the cryptocurrency markets. According to Mr. Novogratz, the moment the big institutional investors decide to go all in on crypto investement, is the moment the crypto-markets will blossom to the $20 Trillion total crypto market capitalization value he spoke about.

In the interview, Mr. Novogratz had this to say with respect to the crypto-markets rebounding from the current decline of $293 Billion in total crypto market capitalization, to finally reaching a $20 Trillion market valuation:

[Cryptocurrency] is a global revolution. The internet bubble was only a US thing. It was rich US people participating. [Cryptocurrency] is global. There are kids in Bangladesh buying coins. It is monstrous in Tokyo, in South Korea, in China, in India, and in Russia. We’ve got a global market and a global mania. This will feel like a bubble when we’re at $20 trillion.

He would later comment that the big institutional investors will enter the market in the mid-term:

It won’t go there ($20 trillion) right away. What is going to happen is, one of these intrepid pension funds, somebody who is a market leader, is going to say, you know what? We’ve got custody, Goldman Sachs is involved, Bloomberg has an index I can track my performance against, and they’re going to buy. And all of the sudden, the second guy buys. The same FOMO that you saw in retail [will be demonstrated by institutional investors]

John Mcafee was keen to multiply Mike Novogratz prediction by a factor of 10 via Twitter:

Cryptocurrency will become a $20 trillion market. I believe it will be 10 times that. Remember: Fiat currencies will be drastically devalued as Crypto advances. By 2021, the US dollar will be worth only 1/5 of what it is worth today. Believe these numbers

Mike Novogratz is an ex-hedge fund manager of the investment firm Fortress Investment Group. Prior to Fortress,he was a partner at Goldman Sachs where he spent lots of time working abroad including senior leadership roles in Asia and Latin America. He is a graduate of Princeton University as well as being ranked as a billionaire by Forbes in 2007 and 2008.

[Photo, Mike Nogogratz. Source, Bloomberg.com]