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In today’s update, I’ll tell you what I saw and heard at Consensus 2018, one of the
biggest crypto summits in the world.
With its record-high attendance, I had to diligently sift through the (many) bad ideas to and the gems, And the most promising thing I learned may surprise you.
First things First… Last week, I warned you that we would see more downside volatility.
I showed you that the analog was suggesting that we would see the broad
cryptocurrency market come in probably to around the $350 billion market cap level.
Now last week, we were around $360–370 billion, and I explained why we were going
to see that pullback.
If you have not watched last week’s update video, the special video I did, please go
back and watch it. It explains why we are coming in right now.
The other thing I want to talk about is that any time you see a market move lower—
whether it’s commodities or equities or cryptocurrency—writers have to pin it on some
type of story. So, the recent weakness that we are seeing right now is being pinned on
this idea that the market is going to get overregulated. Just yesterday, there was an
announcement of 150 types of enforcement actions against (quite frankly) fraudulent
ICOs.
Now, I’ve been saying for two years: 95% of the ICOs are either fraudulent or they’re
bad ideas. It was naïve to imagine that people could issue essentially what are
securities without a regulatory body coming in. So, we’re having a regulatory body
come in and there are going to be consequences, and the market is going to react
violently towards that because it doesn’t like it.
But this is the normal progression of any asset class, especially an asset class that
wants to attract institutional capital.
So again, if we look back at the analog, we were in those Wild West days of the early
internet era. And then we saw really “grown-up” money come into the space. And that’s
when we saw this explosion of value.
Okay, so let’s talk a little bit about Consensus and some of the key takeaways.
I will say Consensus was a bit of a circus this year with 8,500 people and hundreds or
more in the exhibitor hall. It was kind of like Lollapalooza for crypto, which is good and
bad.
The good part of it is it’s great to see cryptocurrency opening up to a broader audience.
The bad part is that it gets a little tougher to separate the wheat from the cha
because there’s just so much cha. There’s just so many bad ideas in this space right
now.
So, I just had to be extra diligent in who I was talking to and in the talks that I wwas going
to—because there were so many dierent talks. A lot of them really quite frankly were
rubbish, really not providing any value at all. But there were a few gems.
Now, I’ll tell you that my key takeaway from Consensus, and you’re not going to want to
hear this… But this is my key takeaway: that bitcoin is wildly undervalued—wildly,
wildly undervalued. And I’ll tell you why.
There was a great talk put on by the folks from the Lightning Network about the
progress that they’re making. What Lightning Network will allow bitcoin to do is
essentially process an enormous amount of transactions at a very low cost. They’re
talking about one-millionth of one cent. The brief overview on Lightning Network is
that not every transaction that happens needs to be written into the blockchain.