Gary Cohn: “The World will Have a Global Cryptocurrency at Some Point”

That said, this form of money continues to come under harsh criticism, which is often the case with any disruptive innovation. You only have to look at social media or the internet, they were heavily vilified before they became mainstream. Indeed, we couldn’t imagine life without the internet now.

As such, to my mind, I believe we’ll see the same trend with cryptocurrencies. There are four main ways that I think show how digital currencies have moved into the mainstream over the past year.

First, some of the world’s major technology firms are investing in and using cryptocurrencies. As an example, Microsoft permits customers to use Bitcoin as payment for online gaming and apps. Bitcoin – the world’s largest cryptocurrency – is also accepted by Paypal, amongst others, as a method of payment.

Second, digital currencies are starting to be adopted by established banking groups. Indeed, the ground-breaking blockchain technology underpinning the majority of cryptocurrencies is being used by major banks including Barclays and Santander. A foreign exchange service has recently been launched by Santander that uses blockchain technology developed by digital currency, Ripple to make same-day international money transfers. It is reportedly in negotiations with other major global banks and money transfer groups to develop similar products.

Furthermore, banks including Goldman Sachs have moved from almost writing off cryptocurrencies to recently establishing a cryptocurrency trading desk; and Spanish banking group, BBVA, with over 21 billion Euros in annual income, participated in one of the largest investments in the bitcoin industry.

Third, well-known international investors are joining the cryptocurrency party. Billionaire investor, George Soros, who was a previous crypto skeptic, is now investing in digital currencies. Also, the following suit is billionaire hedge fund manager, Alan Howard, and the Rothschild family, to name but a few.

Gary Cohn, a former Goldman Sachs executive who led Donald Trump’s National Economic Council said of cryptocurrencies: “The world will have a global cryptocurrency at some point”.

Cohn also mentioned his belief in the Blockchain technology: “I’m not a big believer in bitcoin, I am a believer in blockchain technology. It will be a more easily understood cryptocurrency. It will probably have some blockchain technology behind it, but it will be much more easily understood how it’s created, how it moves and how people can use it.”

Finally, fourth, a regulatory framework for the crypto sector is now inevitable. You only have to look at the July deadline for suggested cryptocurrency regulation set at the recent G20 summit in Argentina earlier this year.

Apart from Cohn, the Bank of England governor, Mark Carney followed up with statements appealing for more regulation within the cryptocurrency sector. He said in March: “The time has come to hold the crypto asset ecosystem to the same standards as the rest of the financial system. Being part of the financial system brings enormous privileges but with them great responsibilities…In my view, holding crypto asset exchanges to the same rigorous standards as those that trade securities would address a major underlap in the regulatory approach.”

One such example of this is the upbeat approach taken by Japan, which I believe should be championed. Indeed, Japan is one of the very first countries to adopt a regulatory framework to oversee trading on registered exchanges.

To my mind, interest in digital currencies will continue to grow exponentially as demand rockets in what is an increasingly digitalized and globalized world.

However, crypto isn’t without its critics. That said, I believe much of this skepticism is based on the misunderstanding. Even legendary investor, Warren Buffett said: “I get into enough trouble with the things I think I know something about. Why in the world should I take a long or short position in something I don’t know about?”

It is therefore essential that financial traditionalists, such as Mr. Buffett, set their sights further afield from the old centralized system of money and keep an open mind about cryptocurrencies.

After all, cryptocurrencies are the future, and whether crypto cynics like it or not, they are here to stay.

Here’s Why Cryptocurrencies Set for Another Surge in Prices

This forecast from Nigel Green, CEO of deVere Group, comes after a strong few days in the cryptocurrency markets.

Mr. Green, comments: “Most major cryptocurrencies have been posting big gains over the last few days.

“Current market activity indicates that the major cryptocurrencies are set for another considerable surge in prices gains in the near future.”

He continues: “What’s fuelling this current rally in crypto prices? There are several key motivators.

“These include the growing integration with and adoption by major banks and other financial institutions.

“Indeed, 20 percent of all financial firms, ranging from hedge funds to banking giants, are now considering trading digital currencies in the 12 months, according to a new Thomson Reuters survey published this week.

“Another key reason for the rally is that there’s a growing awareness of the need and demand for digital, global currencies in a digitalized, globalized world.

“The upward trend is also being triggered by regulation, which most experts now believe is inevitable. This will give investors even more protection and long-term confidence in the market.”

The deVere CEO believes that despite Bitcoin taking the headlines, Ethereum could be the real story here.

He notes: “It’s interesting to note that even with an impressive one-week jump of 11.3 percent, Bitcoin – the world’s largest by market capitalization – is the worst performer amongst the biggest cryptocurrencies.

“The price of Ethereum is predicted to increase significantly this year and could hit $2,500 by the end of 2018 with a further increase by 2019 and 2020.

“This general upswing will be fuelled by three mains drivers. First, more and more platforms are using Ethereum as a means of trading. Second, the increased use of smart contracts by Ethereum. And third, the decentralization of cloud computing.”

Mr. Green goes on to say: “Ethereum can be expected to solidify its position as the second most valuable and used cryptocurrency token in the world. This consistency of the Ethereum token will appreciate well into the future. As entrepreneurs, venture capitalists, bankers, and financial houses are looking for stability and safer trading conditions, and Ethereum is offering that security.”

“We’re certainly entering the crypto bull territory, with many retail and institutional investors now finding that cryptocurrencies can no longer ignore the opportunities.

“However, cryptocurrency markets remain volatile.  Caution should be exercised and professional advice sought.”

Ripple, not Bitcoin, will Convert Crypto Cynics

The prediction from Nigel Green comes as Ripple (XRP) experienced a spike last week, adding another $62bn to its market value. The cryptocurrency also broke some key resistance, such as $0.6500 and $0.6600, nudging it towards the important $0.7000 level against the U.S. dollar.

Mr. Green, whose firm launched the pioneering crypto exchange app, deVere Crypto, this year, says: “After the cryptocurrency market somewhat overheated at the end of 2017 – thanks largely to investors piling in, pushing Bitcoin to an all-time high of more than $19,000 – there was a major, natural price correction in the first quarter of this year of most of the major cryptocurrencies.

“But the cryptocurrency market is, once again, now looking already significantly more bullish than it did in Quarter 1.”

He continues: “This latest upward crypto market trajectory can be attributed to the fact that institutional and retail investors are increasingly appreciating the fundamentals, such as the need and demand for digital currencies in a digitalized, tech-driven age.

“Also there is now huge awareness that blockchain, the technology that underpins the likes of Bitcoin and Ripple, is likely to be the world’s next major disruptive technology.”

Mr. Green goes on to assert:  “Cryptocurrencies are now really coming into the mainstream. But there are still some critics of the crypto revolution. However, I believe that Ripple (XRP) can be expected to convert the remaining crypto cynics.

“This is primarily due to Ripple’s apparent emphasis on integrating with banks and other financial institutions.

“For instance, banking giant Santander has recently launched a foreign exchange service that uses blockchain technology developed by Ripple to make same-day international money transfers. It is also reported to be in talks with other major global banks and money transfer groups to develop similar products.”

He adds: “However, cryptocurrencies remain highly determined by market sentiment, and caution must be exercised and professional advice should be sought.”

The deVere CEO concludes: “By focusing its development strategy in this way, Ripple is likely to help change the perception of crypto, expand its own value, and co-lead the ongoing shift in the way the world uses, manages, accesses, stores and exchanges money.”

“A Fresh Fear is Lurking on Global Financial Markets”

The message from Tom Elliott, deVere Group’s International Investment Strategist, comes as market volatility has increased in recent weeks.

Mr. Elliott comments: “A fresh fear is lurking on global financial markets – and it is not about trade wars.

“It is that global GDP growth may have peaked in the current growth spurt, that began in early 2016.”

He continues: “Add to this three other key factors to add to investors’ nervousness.

“One, the ongoing fear that a trade war will break out between the U.S. and other major economies. Although the trade dispute with China has eased a little in recent days, largely due to Xi Jinping, the Chinese President, making a conciliatory speech last week.

“Two, the apprehension that a new wave of regulation will impact on the business models of some of America’s largest quoted companies, such as Facebook, Google, and Amazon.

“And three, growing tensions between the U.S., the UK, and France with Russia, and others, following Friday night’s attack on Syrian installations.”

He goes on to explain: “However, fundamentals remain supportive for stocks. Consensus estimates for global corporate earnings growth in the first quarter are at 15 percent over the previous year, while for the S&P 500 index it is 17 percent.

“The beleaguered U.S. tech sector is expected to see 22 percent earnings growth, which will help soothe investors’ nerves.

“Despite the prospect of two, maybe three, more rate hikes from the Federal Reserve this year, and probably one from the Bank of England in May, monetary policy remains loose by historical standards in all the main economies.

“This supports risk assets, buy keeping borrowing costs low for companies and their customers, and by keeping ‘risk-free’ rates low and unattractive relative to the expected returns from stocks.”

Mr. Elliott concludes: “Despite new geopolitical concerns, our investment positioning remains unaltered.

“We favor a long-term, multi-asset approach to investing, whereby investors choose a suitable combination of global equities and bonds – depending on their risk profile and investment horizon – and leave the portfolio unchanged. Too frequent rebalancing ensures winners are sold and losers are bought – which financial history, and common sense, supports.”

“Cryptocurrencies Values Went too High, too Fast But Investors are Still Being Attracted to the Crypto Sector”

The bold observation from deVere Group’s founder and chief executive follows the cryptocurrency market recording a daily gain of $10 billion on Tuesday. All the major currencies, including Bitcoin, Ethereum, Ripple, and Litecoin, have been resurrected over the last few days, with Bitcoin, the biggest and most influential crypto, surging 6 percent yesterday (Tuesday) morning.

Mr. Green, who launched deVere Crypto, an exchange app, earlier this year, comments: “There is a seismic shift taking place with cryptocurrency investments.

“Investor sentiment appears to have considerably changed in the first quarter of 2018. Towards the end of last year, crypto values went too high, too fast – and, of course, it was unsustainable. At the time I urged caution, saying an asset that goes almost vertically up should typically raise alarm bells for investors.”

He continues: “Arguably, even before the frenzied peak in December, when the price of one Bitcoin reached an all-time high of more than $19,000, the market was beginning to become frothy and overheated.

“But since then, in this first quarter, there’s been a serious price correction of most major cryptocurrencies.

“It has been this correction that’s been mainly responsible for an evolution in investor attitude. I believe that now the overwhelming majority of investors do not view cryptocurrencies as a way to make a fast buck, as perhaps previously many more might have done. Rather, they are now investing in Bitcoin, Ethereum, Ripple, Dash, and Litecoin, amongst others, as they can see the core value over a longer time horizon.”

He adds: “It’s our experience that people are nowadays investing in crypto primarily because they understand and value the need and demand for digital currencies in an increasingly digital age.

“In addition, there’s a surge in public awareness that blockchain, the technology that underpins the likes of Bitcoin, is the world’s next major disruptive technology.

“Plus, there is a growing sense, especially since the recent G20 summit, that regulation of the cryptocurrency sector is now inevitable – and this, along with growing acceptance in the business and finance community, is giving today’s investors more long-term horizon confidence.”

Mr. Green concludes: “The digital coins are far from their all-time highs, but investors are still being attracted to the crypto sector in their droves.  This underscores that they are increasingly becoming mainstream assets.”

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

“Don’t be Spooked by Stock Market Turbulence”

This is the message from deVere Group, one of the world’s largest independent financial advisory organizations, as U.S. stocks fell into correction territory on the first day of the new quarter, triggering a ripple effect to other financial markets around the world.

The turbulence is largely due to investors becoming rattled over rising trade tensions between the U.S. and China – the world’s first and second largest economies – and major tech firms’ recent declines.

Tom Elliott, deVere Group’s International Investment Strategist, comments: “Stock market investors should not be spooked by the return of volatility on U.S. and global stock markets.

“We are emerging from an unusually long period of low volatility, and this makes recent sharp moves in stock prices feel like an important signal when, in all likelihood, it will prove largely irrelevant for long-term investors.

“Several themes are being used to describe Monday’s fall on Wall Street: fear that Trump will announce another set of tariffs on Chinese imports, Trump’s attack on Amazon’s low – but legal – corporate tax bill, and consumer and regulatory backlash against those tech companies who harvest and re-sell personal data to advertisers. None of these are sufficient triggers for a major correction outside of certain sectors, with tech looking the most vulnerable.”

He continues: “Indeed, the current correction feels like a continuation of March’s de-rating of tech stocks, as investors revaluate future earnings potential in the sector. Tech makes up about a quarter of the market cap of the S&P500, so it is important. But its problems shouldn’t be bringing down other sectors. Therefore stock price falls elsewhere on Monday – for example, discretionary goods and energy – are perhaps best described as ‘collateral damage’.”

Mr. Elliott goes on to add: “The sell-off in late January and early February felt more convincing, as a sharp rise in Treasury yields amid some buoyant wage and inflation data combined to convince investors that the days of cheap money are coming to an end. Risk assets, such as stocks, fell in response.

“A trade war with China certainly has the potential to be a trigger for a major sell-off, but we are not there yet. Otherwise, Treasury yields would have risen in recent weeks, in response to a likely rise in inflation coming from tariffs and import quotas. Instead, 10-year Treasury yields have remained in the 2.7 percent to 2.8 percent range.”

Nigel Green, the founder, and CEO of deVere Group says many investors will welcome this bout of volatility: “Some of the most successful investors embrace some volatility as major buying opportunities are always found where there are fluctuations.

“Fluctuations can cause panic-selling and mis-pricing. High-quality equities can then, for example, become cheaper, meaning investors can top up their portfolios and/or take advantage of lower entry points. This all, in turn, means greater potential returns.”

He concludes: “A professional fund manager will help investors take advantage of the opportunities that volatility presents and mitigate potential risks as and when they are presented.

“Many serious investors will be using this turbulence to create, maximize and protect their wealth.”

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

“Trump’s Tariff Plans Have Created Uncertainty and Put Global Stock Markets under Pressure”

Nigel Green, founder, and CEO of deVere Group is speaking out after global stock markets come under heavy pressure on fears over the rising trade tensions between the U.S. and China – the world’s largest and second largest economies, respectively – and how global economic growth and corporate earnings will be impacted.

President Donald Trump confirmed tariffs on Thursday on up to $60bn in annual Chinese imports. He stated that China must pay for decades of unfairly acquiring American intellectual property. Today, Beijing unveiled plans to impose levies on 128 U.S. products, representing approximately $3bn in imports.

Mr. Green comments: “Trump’s trade tantrums are putting him on the wrong side of history”.

“By imposing tariffs and opposing free trade and globalization, he is potentially creating a totally unnecessary trade war that will be detrimental to the U.S. and global economies. It is almost like he is trying to drag America back to a time that no longer exists.

“For all Trump’s protectionist grandstanding, globalization in the world of trade and commerce is here to stay and will, if anything, only gain momentum in coming years and decades. Globalization is marching on with or without the U.S.

“Applied correctly, globalization promotes free trade which encourages global economic growth, creates jobs, makes firms more competitive, and lowers prices for consumers.”

He continues: “Trump’s tariff plans have created uncertainty and put global stock markets under pressure.

“I would urge investors to review their portfolios to ensure that they are properly diversified across regions, sectors and assets classes.  Diversification is a key tool to mitigate potential risks and to take advantage of the inevitable opportunities that bouts of volatility present.”

Mr. Green goes on to say: “Over a longer time horizon, investing in equities is almost universally recognized as one of the best ways people can accumulate wealth.

“See-sawing markets are a chance for investors to put new money into markets at lower prices. A slump in the market often means that there are high-quality equities available at more attractive prices.

“Of course, no–one knows for sure what will happen in the immediate future, but history shows that stock markets rise over a longer-term period.”

The deVere CEO concludes: “With the possibility of a Trump-induced trade war heating up, investors should review their portfolios to make sure they remain on track to meet their long-term financial goals.”

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Tensions Between North Korea and the U.S. is a Timely Warning for Investors

This week’s increase in tension between North Korea and the U.S. over North Korea’s nuclear missile programme is a timely warning for investors to remain diversified, affirms a leading analyst.

The warning from Tom Elliott, International Investment Strategist at deVere Group, comes as the tensions contributed to a rally in defensive assets on global financial markets this week.

Mr Elliott observes: “This reminds us to remain diversified in our investing habits. We should also be aware of the risk of responding to geo-political shocks by selling assets: too often we find ourselves selling at the moment of highest fear, only to be out of the market as a rebound in stock market prices takes place as tensions wind down.

“This week’s beneficiaries have been oil, the Swiss franc and the Japanese yen, and quality government bonds. Global stock markets fell. The VIX index of implied future volatility on the S+P 500 index (the so-called ‘fear index), jumped to a three-month high of over 15, and we saw growth-orientated stocks under-perform their value counterparts across developed stock markets.”

He continues: “There are few better illustrations as to why a long term investor, keen to maximise returns while keeping portfolio volatility low, should hold core government bonds in their portfolio as part of a balanced portfolio.

“Exposure to the Swiss franc and Japanese yen perhaps best comes through ownership of global stock and bond market funds, or through currency Liquidity funds.

“A global stock market fund will have its fair share of value and growth companies, unlike -say- the FTSE 100 index which is predominately value-orientated with its bias towards energy, mining and financial, or the Japanese TOPIX which is growth-orientated with a predominance of consumer goods companies.”

He goes on to say: “In all likelihood the North Korea threat will persist for years to come, with the U.S, and increasingly China, attempting to contain and restrain Kim Jong-un. He knows that any use of missiles – nuclear-tipped or not- against the U.S or one of its Asian allies, risks a retaliation that will lead to the end of his family’s rule of the country.

“Therefore, there is a high probability that the current tension will ease off, and the recent flight into defensive stocks will reverse.”

Mr Elliott concludes: “But do keep those defensive assets. It is not just North Korea that has the potential to surprise investors. Whether it is a credit crunch in China, policy error from the Fed, or fear of an over-valued U.S. stock market, there are many reasons to maintain a balanced multi-asset portfolio that has exposure to defensive asset classes and currencies.”

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. 

President Trump is the Single Biggest Threat to Investors’ Portfolios

President Trump poses the greatest risk for regular investors in the world – even ahead of a possible recession in China – but there are also important opportunities, affirms the CEO of one of the world’s largest financial services organisations.

deVere Group founder and CEO, Nigel Green, is speaking out after significant Trump-triggered global market sell-offs last week ahead of his maiden foreign trip as president.

Mr Green observes: “The fact that Mr Trump has struck a $110 billion arms deal with Saudi Arabia on Saturday is being hailed as a boost for American jobs, his more conciliatory and statesmanlike tone towards Muslim leaders is being applauded, as is his closer working relationship with China’s President, Xi Jinping. It perhaps shows that Trump is finally appreciating the value and importance of good foreign relations.

“However, at home Trump remains under siege following a series of scandals, including that he may have attempted to get the recently fired FBI director, James Comey, to end an investigation into the former national security adviser, Michael Flynn, and possible Russian interference in the U.S. election.”

He continues: “Against this backdrop of recent events, President Trump and his administration is the single biggest threat to investors’ portfolios in the near term for four key reasons.

“First, the ongoing scandals could quite feasibly distract the Trump administration from its agenda of tax cuts, deregulation, infrastructure spending and other pro-business legislative measures, which are hoped would have beneficial effects for investors.

“Second, whilst in many ways, Trump appears to be less of a geopolitical risk now that he was at the beginning of his tenure, whichever way you look at it, his administration is chaotic and unpredictable – and history shows that financial markets loathe uncertainty.  This was demonstrated by last week’s panicked sell-offs.

“Calls growing for Trump to be impeached are growing and the risk of this happening has substantially increased since the announcement last week of a special prosecutor being appointed to look into his alleged Russian links.  Clearly this is creating uncertainty.

“Whilst these waves of turbulence might be brushed off as a ‘bump in the road’, all too often investors are tempted to overreact and this can have disastrous consequences for their portfolios.  Investors should have longer-term horizons for the optimum results, as stock markets generally go up over time, but acknowledge that there will be ups and downs along the way.

“The unprecedented media circus around Trump magnifies the situation and this could lead to investors reacting in a knee-jerk manner that could be detrimental.

“Third, with such media scrutiny, investors could miss other important geopolitical and economic risks that could affect markets and, therefore, returns. These include the downturn in China’s credit impulse that could create an important drag on Chinese growth in the near future.  Of course, this could have serious and far-reaching consequences – yet few people are as interested in this, or other key risks, as they are in Trump.

“And fourth, it could be reasonably argued that a market correction is needed and that Trump and the scandals following him could be the catalyst for this.”

Nigel Green concludes: “Being the CEO of the world’s largest economy, a U.S. president’s actions and policies will always have an effect on markets and, therefore investors’ returns.  But Trump’s unpredictability, the scandals that swirl around him, and the media’s obsession and magnification, make this a unique set of circumstances.

“Trump is creating volatility and is likely to continue to do so. But whilst this can pose a real threat to those who are unprepared, complacent, or who overreact, volatility is good for markets and savvy investors alike, because it generates important investment opportunities.”

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