Frank Curzio's WALL STREET UNPLUGGED Podcast

Uncertainty rules crypto… for now

The uncertainty of SEC regulations in the crypto sector is like the thunderstorm cloud that follows Charlie Brown.

But when this cloud passes—and it will pass—it’ll open the floodgates for billions of dollars to flow into the crypto world. Cryptocurrencies are volatile. And you should expect this to continue. It’s the norm, not a phase.

Today, I’ll explain what’s happened the last couple of months with the SEC… And why a changing of the guard is a catalyst that will send the crypto market much higher over the next several months. It’s like a coiled spring waiting to shoot higher…

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Bitcoin (BTC)—the largest cryptocurrency by market cap—is basically flat over the last three months. In mid-June, Bitcoin was around $6,500. Today it trades around $6,400. But look what happened in between…

The price shot up 30% to over $8,000 around the end of July… only to fall back down to the $6,000s. Other cryptocurrencies have fallen much more.

Ethereum (ETH) has fallen an incredible 55% over the last three months—from around $500 in mid-July to about $210 today.

The news surrounding cryptocurrencies continues to be negative. Near the end of July, the SEC rejected a Bitcoin exchange-traded fund (ETF) application from Cameron and Tyler Winklevoss (famous from the early days of Facebook and founders of the crypto exchange Gemini).

In August, it rejected nine applications for Bitcoin ETFs over concerns of inadequate “resistance to price manipulation.”

But all is not lost.

VanEck (a money management firm) has a Bitcoin ETF application under review. The SEC was set to rule on this application by September 30. But it has pushed back its deadline to February of 2019 because it requested further clarification on the ETF. And a new commissioner has joined the SEC. There are five in total. (The U.S. Senate confirms individuals to the SEC.)

Elad Roisman was sworn into office on September 11. Roisman seems to be pro-crypto. When discussing initial coin offerings (ICOs) and blockchain technologies he explained the SEC needs to “examine and re-examine its rules, regulations, and guidelines” to a market that has “evolved.”

He’ll join two other pro-crypto commissioners, Robert Jackson and Hester Peirce. The other commissioners are Jay Clayton, who’s against crypto, and Kara Stein. Stein can’t serve on the commission past December. This may lead to a pro-crypto replacement.

This is bullish. We could see an ETF for Bitcoin (and some much-needed momentum) in the first quarter of next year.

Another bullish sign is Coinbase charging ahead to gain institutional clients. Coinbase is one of the most recognized and largest cryptocurrency exchanges in the world.

Its new office in New York is expected to grow to around 150 employees next year, up from 20 today. Coinbase has made hires from big firms such as Citigroup, Barclays, and the New York Stock Exchange.

Adam White, general manager of Coinbase Institutional, said, “When we saw the market begin to correct, which we all expected, institutions didn’t lose interest. It was exactly the opposite.”

As I’ve been saying for a while, the market is waiting on some crypto regulation.

Hedge funds and many others want some clarification before injecting billions of dollars into the space. I believe it’s still a matter of “when,” not “if.” We should see some regulation over the next six to 12 months.

On October 15, Fidelity announced it’s creating a company called Fidelity Digital Asset Services. The company will act as custodian and execute cryptocurrency trades for large institutions and hedge funds.

These are the catalysts that will eventually break the dam wide open. A trusted brand like Fidelity will make it easier for huge sums of money to flow into cryptos.

Don’t let the volatility scare you out of this market. Fight back with small position sizes. And use pullbacks to add to some of your favorite positions.


Note: While the price of cryptos has crashed from all-time highs, certain cryptos are quietly gaining traction with real-world applications and solutions. I just turned my Crypto Intelligence readers on to one that’s being accepted by over 700 companies… and just received backing from one of the largest crypto payment processing companies in the world.

To learn how to access this name—and other well-positioned companies in the crypto space—click here.