Bitcoin has disrupted Moore’s Law and Electricity is 500% Undervalued

Steve Kanaval - January 7, 2018

Digital Currency Remains the Most Important Asset of 2018

Many listed (NYSE) and (NASDAQ) regulated stocks are up in 2018 as analysts, commentators, and market watchers sorted through what sectors have potential for 2018 in hopes of individual sectors turning, or stock specific/industry specific names Nvidia (Nasdaq:NVDA) hanging on to the graphics processing unit (GPU) demand and hanging onto the digital currency (DC) multiple (34x), or will newly listed companies like Digital Power (NYSE:DPW) sell enough power sources to make a difference to the bottom line where they can leap from the manufacturing sector with government contracts into a DC 34x multiple because they make the premier power source for digital mining rigs.  These questions will be answered at the end of each quarter.  The 34x multiple requires revenue delivery and a common metric.  This is coming because analysts will need work and will start following these high flyers. Know, this is 1994 and the internet is about to explode on the investment scene where you get adoption.  Bitcoin is not in a bubble at $16,000; it is going to $50,000 by 2020.

But the real story is in the underlying trading of real dollars in digital currency.  Everyone is trading this, and maybe I just come from a family of traders, but I found myself talking with my Mom about Ripple price targets for 2018, and the fact that I had them at $23 – $25 and it is trading at $3. Mom didn’t ask what Ripple was, or what it did because it doesn’t matter, only price matters in new markets, and the only thing that matters is the price of Bitcoin. This digital currency is driving the markets, and Bitcoin is fully driving the market.

The adoption rate is similar to the exodus when the consumer realized they no longer needed a landline, and the disruptor (your cell phone) disrupted. Bitcoin forced Fidelity to start mining Bitcoin to meet demand, and they have many, many mining rigs.  Mining will be a big business run by big companies as electricity rises. The home consumer stops mining at $0.25 per kilowatt per hour because they no longer make money.  The only way to make money is to mine under $0.10 per kWh.  The game is converting electricity into digital coins.

In January 2018, the largest iPhone download will be Coinbase, by a large margin.  It won’t be Angry Birds or Facebook Lite, it will be a Digital Wallet or an exchange where you can trade digital currencies like a psychotic horse running out of a burning barn. I talked to a smart CEO in Digital Mining and he pointed out that I could open an account and bet on the Steelers, and get long Bitcoin.  We will trade our asses off in 2018 and the guy sitting next to you on the train just swapped Ripple for Ethereum Classic versus sitting in cash.  The language and markets are forming, and the – I don’t wanna knows – are the same ones who said,  “ That damn internet thing, I don’t think anyone needs a computer in their house”, and they also say, or one often hears, this is a bubble of Tulip Bud proportions. The Tulip bulb issue was 450 years ago for Pete’s sake, and Digital Currency is a product the global consumer will use as FIAT Currency and decentralized networks of capital change our society and the way we pay for things.

Let’s talk about digital mining.  I want to simplify mining for the non-understanding masses.  Mining is done by a powerful computer, and it checks the trades.  It is an out-trade clerk from the CME in 1985, except it is a superfast computer that any gamer wants.  But what it really is is a process of converting electricity into coins, all sorts of coins. It is a business now made up of homespun tech geeks who understand hardware, but in the future, it will be run by larger businesses.  The home winemaker will be a hobby, not a revenue source, and it is because electricity is undervalued by 500%.  It just took Bitcoin to highlight how cheap electricity really is in an age where we need to charge our cell phone or device 3x per day.  The price of electricity is never going lower, and you can toss Moore’s Law out of the window.  We are in an age of Moore’s Law cubed, not squared, cubed. Bitcoin has disrupted Moore’s Law.

 

 

Steve Kanaval

Steve Kanaval: Portfolio Manager/Writer/ Market Analyst Steve began his career in the Trading Pits in Chicago making markets at the Chicago Mercantile Exchange (NYSE:CME) the Chicago Board of Trade and the CBOE in the early 80's. He ran the Morgan Stanley Derivative Prop Trading for the firm specializing in Index Arbitrage. He continued his career as a Trader/Portfolio Manager for multiple Hedge Funds during the Internet Boom of the 90's managing large portfolios. Steve is known as an expert in MicroCap Technology Stocks and the emerging Digital Currency markets as a Portfolio Manager for his Family Office. Steve has managed portfolio's in volatile asset classes for 3 decades as a commodity trader, hedge fund manager and digital currency trader and miner. Steve publishes his views on the asset classes in a public forum and has published many articles simplifying these complex and volatile assets for readers. His work is published on multiple sites including Bloomberg, Equities.com, Hacked.com, CryptoCurrencyNews as a paid contributor. His work includes research, journalism and archived video on important market volatility related to stocks, digital currency and other volatile misunderstood asset classes. He offers a humorous, unique insight and the related back stories and drivers for readers interested in volatility and emerging market assets. Full disclosure Steve is long 25 digital currencies and sits on the board of multiple public companies involved in digital currencies, and owns shares in these companies from time to time.

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