The banking industry is facing a major disruption and is still not fully realising the threat cryptocurrencies and the blockchain technology poses to their outdated industry.
With the decentralisation of currencies, intermediary banks no longer can continue to exist as a utility. Are they like the taxi industry bagging an upstart that’s about to cut their lunch?
Many mistakenly feel they have missed the boat on Bitcoin. With its meteoric rise capturing headlines, many are already scrambling to figure out what really is going on and how they didn’t see it coming.
Bitcoin could also hit as much as $100,000 and many investment managers will get sacked because they failed to hedge or leverage at least 1% or more of their portfolios into Bitcoin and other cryptocurrencies.
As it hits $10,000 AUD over $7500 USD, many think they are too late to the party and regret not getting in years ago.
I am glad that I publicly informed my followers to sell their gold and buy Bitcoin once Bitcoin hit $120 USD, as I did myself.
I had told followers to buy gold a long time ago when it was only $200 an ounce and have seen it rise to almost $2000 AUD.
But that was nothing to the almost 100 times increase Bitcoin has jumped in the last 4 years.
However, many are going to regret not getting into Bitcoin even now.
I said back then it would go to $10,000 or possibly even $100,000 per coin and beyond.
Many simply were too busy with their nose to the grindstone to listen to what I was saying- just like I had since 2009/10 been telling everyone who would listen to buy US property, especially when the AUD was close to $1.10 and USD property was at its bottom.
US property recovered rapidly. Houses that my investment company bought for as little as $40-$50,000 rose to $150,000-$200,000 with AUD correcting from $1.10 to 75 cents, thus boosting profits even more.
Some listened and made a fortune.
Many don’t realise just how fast Bitcoin will reach these heights.
It may have some pullbacks, but it will continue in a rapid upward trajectory.
Investment Managers will have egg on their face and risk being fired if they don’t quickly get up to speed.
Many Investment managers and Family Offices think it’s ok to have missed investing in Bitcoin, as it’s a tulip bubble and will soon be over. Therefore, they falsely believe that not investing in it won’t cost them their jobs.
However, they are wrong. When Bitcoin continues to reach dizzying heights, they will be left with little to no exposure to one of the world’s greatest wealth redistributions mankind has ever witnessed.
This is far bigger than most can grasp.
They should be putting 1% of their portfolios into Bitcoin and emerging Cryptocurrencies even if it’s purely as a form of insurance.
Some Family Offices already are, but most don’t have savvy investment managers that realise it’s the investment banking industry that’s about to be completely disrupted.
You can’t afford to not be exposed to this juggernaut.
Investment Banks are going to have their lunch cut and still don’t see it.
ICOs are taking over from IPOs and investment banking industry hasn’t yet realised how big the industry will become and how it will cut their lunch if they don’t get involved.
There is massive opportunity for stockbroking and investment firms and trading firms that see the future and start creating a division for ICOs and crypto trading even if it has to be set up outside non friendly ICO countries until regulation is decided upon.
For example, think of the size of Uber and Airbnb where regulation is only just starting to occur now in that industry.
And these are single companies with combined market caps of over $100 billion.
Cryptocurrencies are an entire industry that can cover almost every industry with $180- 200 billon market cap. $50-80 billion of this is in cryptocurrencies outside Bitcoin already.
That’s tiny to what it can become.
This could hit as much as a trillion dollars before regulators even get basic regulation in place, as they are often slow to react or left flat footed.
And even $1 trillion market cap is just the beginning.
As with crypto currencies, regulators are dealing with something that isn’t that simple to regulate as they don’t yet grasp the size of this revolution.
Why do an IPO when you could do ICOs.
For a fraction of the cost and time and attracting capital so much faster, the opportunities are enormous. And finally, everyday investors get a slice of the action in investing that they usually are prevented from participating in when they should have equal rights to invest as they wish.
I’ve never seen a market so hot since the DotCom boom.
Every industry should and will have their own cryptocurrencies.
Also, most ICOs unlike IPOs have often more growth potential and generally have low cash burn rates. On the other hand, listed companies generally have huge overheads and are often listed after they have achieved a peak in sales leaving investors with minimal upside.
ICOs and pre ICOs happen generally at the beginning of the venture.
Sure, many won’t last and just like the dot com boom there will be a clean out in the future.
I’m backing some real estate backed cryptocurrencies as we speak. Ones with genuine business models could single handedly jump well past a billion dollars valuations in no time.
A billion tech start up or Unicorns are rare. Even $100 million ICO are something to be excited about and occurring often as we speak.
Yet with ICOs we could end up with more than hundreds of billion dollar ICOs before we even know it.
While many in the investment banking industry are standing by the water cooler in their plush offices that they soon won’t be able to pay for, dissing on Bitcoin and cryptocurrencies, the greatest industry transformation is happening under their watch and they don’t realise it. If they don’t change ships, soon many of them will find themselves on the Titanic heading for oblivion as their fees from banking and capital raising dry up as ICOs steal the IPO market.
The smart banks are starting to figure this out and this why they are behind Bitcoin futures to generate fees without even needing to hold Bitcoin. But most don’t even see what’s happening yet, nor the speed of what’s happening.
And understandably so- considering the banking industry hasn’t really changed that much for 400 years.
Nathan Rothschild, if he were alive today would no doubt recognise that the banking system as we know it is about to suffer the greatest disruption the world has ever seen. Yet most of the industry is oblivious to the threat and even if they were, they can do little to stop it.
My piece of advice to the industry: you better start figuring out that the banking industry is quickly becoming like the taxi industry.
Bag cryptocurrencies all you like, but Uber cut taxis’ lunch before they even knew what was going on.
No one cared much for taxis considering the poor service for years, whereas Uber became so popular that consumers ensured its success and ensured regulators couldn’t crush it.
Banks don’t exactly inspire consumer advocacy to support their continued gouging of the public, nor do they even have much political support- at least in Australia they don’t.
Banks wasting time trying to force regulators to protect the industry will be a slow and wasteful use of resources whilst missing the obvious.
The banking system can be decentralised and a better value provided to the world- thanks to block chain technology and cryptocurrencies.
One can see the wave that’s coming and adjust one’s sails fast or risk being washed onto the rocks and exposed to the mercy of the crashing waves. The hundreds of billions or soon trillions flowing to cryptocurrencies are coming from somewhere.
And much of that market cap will be sliced off the banking industry and moved into the hands of many everyday people in the form of cryptocurrencies.
Many will end up joining the club of investment managers that will have to explain in the near future why they shouldn’t be fired as Bitcoin and other cryptos continue to soar in price and they didn’t at least hedge a position.
It’s ok to dismiss Bitcoin publicly, as long as privately you have hedged a position- in case your personal opinion is wrong. Otherwise it could be a very expensive lesson for many.
Industries don’t get disrupted generally with much notice. Disruption usually occurs because most are blinded to what later becomes obvious. But it’s not always obvious when it is happening. And by the time many recognise that someone is stealing their lunch, it’s too late.
It already has been the world’s most successful investment in history, so if we are rubbishing it, what investment has ever been better and what are we waiting for- something that generates a higher return than what Bitcoin has?
The cryptocurrency revolution hasn’t even begun. Somehow, I don’t think the banking industry will be able to rally consumer support to have regulators support its survival and many have lost faith in central banks, which because if their willingness to print so much paper money backed by nothing has led to Bitcoin becoming such a force. Once the average person sees cryptocurrencies as a way to beat the banks and change the world and not just a punt to make a few bucks, then its support will make it a powerful force that regulation could only hope to slow but not able to stop.
Jamie McIntyre is a private investor, entrepreneur, business strategist, motivational speaker and author including “How to become a Bitcoin Millionaire”. He is also a sought after advisor for ICOs and future trend strategist.
He is currently advising on ICOs- some including a real estate backed cryptocurrency HotelCoin www.myhotelcoin.com, which is planning to disrupt the TimeShare industry and become a platform for resort developers to capital raise on and a payment system for large hotel chains for accommodation and purchasing holiday properties. He is also advising on Boatcoin www.boat-coin.com, which plans to become a global platform for luxury yacht syndication and global charters.