Cryptocurrency Reaching New Heights via JP Morgan and Facebook

by Michael Keane

In 2019, cryptocurrency, and more importantly the blockchain technology behind it, has taken large steps towards societal adoption. Notably, both JP Morgan and Facebook have fully jumped in with announcements of competing currencies. We are also finding politicians becoming more and more active on the regulation side.This has a feel to it similar to the early stages of the internet.

With JP Morgan and Facebook now heavily involved, cryptocurrency is likely here to stay. Two years ago, Jaime Dimon, JP Morgan's CEO, readily came out and called cryptocurrency a fraud (CNBC story here). Not 18 months later, in a company document, he releases the JP coin (CNBC story here). As you can see, the only fraud was believing what Jamie Dimon said before. Good strategy that carries credibility issues. But here is the take away. Banks are there to manage value. They would be silly not to invest in the ability to manage cryptocurrencies in the best way they know how. To date, it is to create their own.

Facebook's situation is even more juicy. As has been documented in the past (even with a feature film The Social Network), Mark Zuckerberg has been accused of stealing Facebook from Tyler and Cameron Winklevoss. The case was settled and the brothers walked away with a settlement in the hundreds of millions of dollars. What did they do with the money? Cryptocurrency (CNBC story here). They invested heavily in infrastructure, regulation, and the currencies themselves. Now that Facebook  has entered the cryptocurrency in a big way with Libra, both the Winklevoss twins and cryptocurrency as an industry have both received a big viability confirmation (CNBC story here).  It also turns out that business trumps likeability as the twins and Facebook have started to mend fences.

Politicians on the other hand are nearly standing on their head trying to catch up. They have not prepared themselves for the arrival and legitimacy of cryptocurrency. They actually were just ignorant enough to listen to Dimon's comments about it being a fraud. Ooops. You better believe work is being done now though. Hearings are ramped up (CNBC story here). This side of things could get ugly as the theory behind cryptocurrency butts up against the theory of needing a government to regulate it.

The time for understanding cryptocurrency is here and will likely need to some time and practice. Don't be the ostrich.

** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Blockchain Gets Major Endorsement

by Michael Keane

Last week, JP Morgan announced that it has created its own cryptocoin, the JPM Coin. Given what has been said before by the company, this was a major shift and endorsement not only for cryptocurrencies, but also a big endorsement of the blockchain technology behind it.

While Blockchain technology is absolutely still in its infancy, the announcement can be looked on as a game changer when it comes what the true perception of the technology by the big players. It harkens back to the infancy of the housing crisis, when at first the banks laughed at people like Dr. Michael Burry and Mark Baum, but then joined them in a big way while using deception announcements to keep the public at bay. Last week's announcement by JP Morgan would not have come without some testing of the technology's utility to the bank's mission and profit model. Jamie Dimon calling cryptocurrencies a "fraud" 18 months ago now looks like a delay tactic.

This announcement is also a very good indicator that average consumer uses are now ready to had in the marketplace. 

The following outlets have caught the sea change in JP Morgan. Enjoy!

Cnbc article-Hugh Son

CNN Article- Matt Egen

Forbes Article - Michael del Castillo 


  ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Here Come the Earnings (Part 3 of Tax Bill Outcomes)

by Michael Keane

This is Part 3 of the "Tax Bill Analysis" series. It will focus on the support it will create for corporations earnings levels and the stock market as a whole. Please read parts 1 (link here) and 2 (link here) if you haven't already.

The recent tax is about to show its true worth to the economy. That is because it is about to show up on the balance sheets of US corporations. The first earnings cycle is going on in report after report, the one common theme is how much better earnings will be because of this new tax bill. From the banks like JP Morgan or Bank of America, to energy companies like BP or Shell, to tech companies like Apple or Microsoft, this bill is one big windfall. This one of the main reasons why corporations spent millions of dollars lobbying for this bill. It literally means billions of dollars for them and their shareholders. Per disclosure, through retirement funds and partners, some of KeaneVCC's money is invested in shares of these corporations.

This buffer or ignitor for earnings also will have an effect on the market as a whole. PE, or Price to Earnings ratios will drop because of the raised earnings. This puts stock prices at a cheaper level in terms of value. It could either send the market higher, or at the very least buffer any normal drops or corrections seen in the market.

 ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**