Nick’s Note: Former hedge fund manager and globetrotting crypto expert Teeka Tiwari is back on the road—this time at Web Summit in Lisbon, Portugal. Teeka says almost everyone at the conference is talking about cryptocurrencies… except the one group that has the most to lose from the new “cryptoconomy.”
Nick: T, you’re at one of the biggest tech conferences in the world. What’s it like?
Teeka: Web Summit is huge. It’s the largest tech conference in the world. There are more than 60,000 people here from 170 countries.
And there are some big hitters here, too… people from international banks and payment processors all the way down to start-up entrepreneurs.
The conference is supposed to be about money and new financial technologies (fintech). But all the talk has been about cryptocurrencies and the blockchain.
Nick: That must make you a pretty popular guy over there…
Teeka: It’s crazy. I brought my wife with me this time so I could put to rest all those questions about what I’m doing on the road all the time. (See October 28 Daily, “My Wife Thinks I’m Cheating.”)
And we were at a bar getting dinner the other night when the bartender stepped back and really quietly asked: “Are you Teeka Tiwari?”
I’ve got people coming up to me asking for pictures. And I’ve got to turn them down.
Because what’s happening is, these guys want to have a picture of me so they can go to their investors and say, “Look! I talked to Teeka, he’s going to recommend my coin.”
I can’t have that. People are already stealing my image and putting it on fake research reports. Posting pictures of me is even worse. It’s getting out of control.
Nick: A lot of our readers are writing in to alert us about this. What are you telling them?
Teeka: I tell my subscribers that they should only act on information that comes directly from us. Because there is a lot of fake stuff out there. And if you act on these phony reports, it’s going to cost you money.
My official recommendations only come from the Palm Beach Research Group email address. So, make sure you see that before you act on anything.
Nick: Great point. We don’t want any subscribers to get suckered into believing these fake reports… So, what are the main themes you’re hearing about over there?
Teeka: One repeating theme I’ve noticed is that the money remittance racket is over.
Nick: Can you tell readers what that means?
Teeka: Sure. When someone comes to America to work and then sends money back to their relatives in their home country, that’s a remittance.
And it’s a huge business for these international banks. They make about $80 billion per year in remittance fees. And they’re not afraid to charge high rates, either.
The average cost to send them is 7.6%. In some poorer countries, it can exceed 10%. That’s highway robbery.
But now there’s a way to get around those fees… With cryptos, you can send payments large and small for just pennies. It’s possible to send $1 million of ether to anyone around the world for just a couple of dollars.
Once people figure this out, they’ll never use banks to send money internationally again.
Banks are about to be “disintermediated.” Their usefulness is quickly deteriorating.
Nick: The big banks are pretty powerful. I don’t think they’ll go quietly in the night.
Teeka: Here’s the thing… The banks here aren’t even thinking about the blockchain. They’re like what Blockbuster was when people started using Netflix.
I just saw a presentation by the CEO of Société Générale. This is a big international bank. And he’s talking about expanding the current banking system. He didn’t even mention cryptocurrencies once.
To me, it’s only a matter of time before merchants start accepting cryptos because the fees are lower.
SocGen and the other big banks are about to be blindsided by this technology. Just like Blockbuster was by streaming technology.
Nick: Are banks the only companies that will be blindsided?
Teeka: The other big losers in this space will be wire transfer companies like Western Union.
Western Union gets 80% of its revenue from people sending money to friends and family. Once word gets out about the cheaper way to send money, Western Union will be in big trouble.
Nick: Interesting. How quickly do they see this happening?
Teeka: Sooner than you might think. There’s a guy, Tim Draper—a billionaire tech investor. He’s got an impressive résumé. He’s supposedly the person who created online viral marketing. And he was instrumental in the success of early email clients like Hotmail and Yahoo! Mail.
He also bought the bitcoins the government confiscated from the Silk Road bust in 2014. He paid about $200 per bitcoin at that time. Now, it’s trading near $7,000.
Tim is a smart guy. And he’s saying that in five years, we’ll be laughing at people who use fiat currency. That means, he thinks cryptocurrencies will reach mass adoption by the end of 2022.
And there are lots of reasons why… Going back to remittances, I listened to a talk by an Asian payments company executive.
He’s running into a problem. His business is moving about $200 million per month across borders. And they are losing $2.8 million in foreign exchange fees. That’s 1.4% on each transaction, just because he has to convert from local currency to dollars then back to a foreign currency.
He’s working on ways to “disintermediate” the dollar from the process by using cryptocurrencies. It will save everyone a lot of money. And it’s going to happen quickly… When there’s that much money on the line, these smart guys will figure out a solution.
It’s going to create a whole new economy. One that I’m going to call “crypto-nomics.” And I’ll make sure every one of our readers is prepared to navigate this new economy.
Nick: Thanks for talking to us. Take care.
P.S. The new “cryptoconomy” will be the wave of the future. And it will steamroll specialized companies like Western Union. The best way to take part in this new economy is to buy a little bit of bitcoin. It’s the reserve currency of the crypto space.
How are you preparing for the new “cryptoconomy”? We want to know the steps you’re taking today. Drop us a line right here.
On Wednesday at 8 p.m. (ET), Teeka is holding a live Q&A session where he’ll reveal the best opportunities in the crypto space for 2018.
To sign up for the Q&A and start submitting your questions, click here.