Crypto Rally Slows Down

As I write this report, cryptocurrency prices are in the middle of a vicious tug of war between the bulls and the bears. And the bears are winning right now.

Most, if not all, of our favorite cryptocurrencies trended down over the last seven days, erasing the progress they made in earlier weeks.

Short-term volatility is completely overtaking the market, making it tough for existing holders of crypto assets.

But…


If you’re someone who is looking to enter the market, a sell-off is exactly the right time. How many times have I heard investors say, “If I had bought Bitcoin two years ago, I would have made [insert insane profits here]”?

Each time cryptocurrencies dip, investors have a shot at redemption.

Ethereum News & Analysis

In 2017, cryptocurrency prices outran reality. This year, the opposite is true.

I warned investors about this very possibility at the start of 2018 because it seemed like every investor I talked to was nervous about the future.

They all seemed to feel energy and enthusiasm draining out of the market. All except the true believers, of course.

Meanwhile, my conversations with blockchain entrepreneurs were filled with sunshine and rainbows. The gap couldn’t be wider.

I took this to mean that we’d see enormous progress with on-the-ground blockchain development, but that it would take time for those results to show in cryptocurrency prices.

As the year has progressed, this prediction has borne fruit. We see Fortune 500 companies dipping their toes in the blockchain waters, regulators carving out innovation-friendly rules, and respected venture capitalists making huge bets on blockchain startups.

In fact, Deloitte reports that 74% of large corporations see a “compelling business case” for blockchain development. Large corporations, mind you. (Source: “Deloitte: 3 out of 4 Big Companies See ‘Compelling’ Case for Blockchain,” CoinDesk, May 15, 2018.)

That means firms with over $500.0 million in annual sales are looking at how Ethereum or Ripple or some other blockchain protocol can work to make them more efficient.

Only someone determined to be unimpressed can shrug their shoulders at that survey, but—and I hate to say it—we haven’t seen those gains appear on CoinMarketCap.com. Yet.

While we wait for the market to catch up, take a look at three of the developments I’m talking about.

AWS Gives Consensys a Leg Up

“Amazon Web Services” (AWS) is making it possible for its clients to build hassle-free enterprise blockchains. The offering comes after AWS partnered with blockchain startup Consensys, a Brooklyn-based studio for Ethereum projects. (Source: “AWS Moves to Simplify Production-Grade Business Blockchains,” CoinDesk, May 15, 2018.)

“We have been following ethereum closely as it’s what many of our customers have been exploring, especially for enterprise use cases,” Matt Yanchyshyn, the global technical lead for AWS’s partner program, told CoinDesk.

Just to be clear: AWS will not favor Ethereum over other protocols. However, it will make blockchains much more accessible to small and medium-sized companies, many of whom use AWS tools to facilitate their online businesses.

Microsoft Corporation (NASDAQ:MSFT) took a similar step a few months ago by adding blockchain-building functions to its cloud computing platform. Those tools were experimental, though, meaning that companies weren’t able to implement the technology across their entire network.

Coinbase Offers “Custody” Services

When people talk about Wall Street getting involved with cryptocurrencies, they often say things like, “Institutional investors are waiting for the necessary infrastructure to be built,” or something along those lines.

What they mean is that high finance is different from retail investing. We can simply open a trading account and buy what we want. But for the Big Fish, there are specific requirements, such as having a “custodian” for your investment dollars.

Coinbase, the leading cryptocurrency exchange in America, is looking to become the custodian for a whole spate of hedge funds and institutional investors entering the space. (Source: “Announcing the Coinbase Suite of Institutional Products,” The Coinbase Blog, May 15, 2018.)

Here’s how it’s explaining it:

“In fact, in the past few months over 100 hedge funds were created that exclusively invest in and trade cryptocurrency. Some of the world’s largest financial institutions have also recently announced their plans to begin trading cryptocurrency…This movement requires institutional grade products and services, something Coinbase has been developing with leading institutions and which we are proud to formally launch today.”

EEA Starts to Build Common Standards

The Ethereum Enterprise Alliance (EEA) is one of the big collaborative efforts in the space, including such illustrious names as Microsoft, JPMorgan Chase & Co. (NYSE:JPM), BP plc (LON:BP), and hundreds of others.

For months, I’ve told readers that this alliance could transform blockchain into a legitimate force in the world of commerce and Big Business. And at a recent conference in New York, the group took a big step toward proving me right.

It unveiled “Enterprise Ethereum Client Specification 1.0”—the first in a series of common standards for Ethereum development. (Source: “Enterprise Ethereum Alliance Specification Clears the Path to a Global Blockchain Ecosystem,” Ethereum Enterprise Alliance, May 16, 2018.)

“The EEA’s Enterprise Ethereum Specification is the result of 18 months of intense collaboration between leading enterprise, technology and platform members within our technical committee,” said EEA executive director Ron Resnick. “This EEA open-source, cross-platform framework will enable the mass adoption at a depth and breadth otherwise unachievable in individual corporate silos.”

Not only is this a big step for the EEA, which launched more than a year ago, it’s also a milestone for the industry at large. Why? Because it, alongside Coinbase’s custodial services and AWS’s blockchain tools, gives Big Business a roadmap to getting involved in distributed ledger technology.

Analyst Take

Our Ethereum price forecast has the crypto asset reaching $1,500 in 2018, before moving on to the $2,500 level. But in order to get to that level, a core group of investors will have to abide by Warren Buffett’s timeless wisdom on investing:

“Be fearful when others are greedy and be greedy when others are fearful.”

What he means is that investing is counter-intuitive. You have to fight your instincts to make the right decision, because every fibre of your being will resist investing in a falling stock or bond or cryptocurrency.

You can’t help it, it’s your survival instinct. Your brain knows the market is overrun with fear, so you start to be fearful as well. But that’s precisely when you shouldn’t be.

If you apply this philosophy to ETH prices, there’s potential for massive returns.