By Teeka Tiwari, editor, The Palm Beach Letter
This could be “a watershed moment for the industry.”
I doubt you’ve ever heard of the Depository Trust & Clearing Corporation (DTCC).
Few people have.
But it’s one of the most powerful institutions on Wall Street.
The DTCC is a clearinghouse for nearly every type of trade you can imagine.
Stocks, bonds, mortgage-backed securities, money market instruments, derivatives, mutual funds…
You name a security… and the DTCC probably settles it.
All in all, DTCC settles nearly 100 million trades per day. That comes to $1.5 quadrillion in global trades per year.
A quadrillion is one thousand million million. Let that sink in for a moment.
Another way to think of a quadrillion is 1015 (10 to the 15th power). That’s a 1 followed by 15 zeros.
To put that in perspective, the Federal Reserve has trillions in assets on the entirety of its books. DTCC moves that amount every day.
No institution in the world moves as much money.
Here’s why I’m telling you about this obscure (yet powerful) Wall Street institution…
For years, the DTCC has managed all its trades on centralized databases. Now, that’s about to change.
And this is big news for proponents of my favorite technology trend…
Follow This Cycle to Profits
Recently, I told you about a little-known ratio called the mass adoption point (MAP).
The MAP ratio looks at the price of a technology compared to its adoption. Each time the unit price goes down, more people buy it.
Over the years, the MAP ratio has shown up again and again.
Each time it’s kicked in, it’s made share prices skyrocket and a whole new crop of investors rich.
Using the MAP ratio would have turned a $10,000 investment in Dell into $500,000. A similar investment would have made $250,000 in Nokia and $200,000 in Apple.
Making money off the MAP ratio is easy.
All you have to do is wait for hardware prices to drop. Once they do, adoption rates soar through the roof… and so do the share prices (see chart below).
Last week, I told you the MAP had located the $90 billion trend in virtual reality.
That pales in comparison to the next trend the MAP has unearthed…
“X” Marks the Spot on a Trillion-Dollar Trend
In January, the DTCC announced that it’s moving part of its network to the blockchain.
My friends, this is the sign we blockchain bulls have been waiting for…
Let me explain…
In the first phase of this changeover, the DTCC’s Trade Information Warehouse (TIW) will be moved to the blockchain.
The TIW automates recordkeeping for more than $11 trillion in credit derivatives.
The DTCC says moving the TIW to the blockchain will reduce costs of derivatives processing by making it much more efficient.
IBM is partnering with startups Axoni and R3 to build the network.
Axoni CEO Greg Schvey said, “Deploying distributed ledger technology in production at this scale is a watershed moment for the industry.”
In other words, we’re starting to see the floodgates open for blockchain technology…
Blockchain Hitting Its MAP Cycle
The blockchain was originally designed to settle transactions for bitcoin. But it’s evolved into much, much more.
Major corporations from Walmart to Disney are adopting the technology. And that’s boosting blockchain spending.
Look at the chart below. It’s from global research firm Aite Group.
As you can see, blockchain spending is projected to nearly quadruple by 2019. And that’s just in the financial sector…
Now we’re getting even more concrete proof of this trend… from Wall Street.
The big banks wouldn’t just trust anyone to handle trillions in transactions. Yet they’re putting an $11 trillion bet on the blockchain.
If the bet pays off, the blockchain will eventually handle quadrillions in assets. No other technology we know of can boast those kinds of numbers.
This is clear evidence that the blockchain is hitting its MAP cycle…
My friends, imagine if you could own just 1% of that technology. That would be $100 trillion. Just 0.1% would be $10 trillion. And 0.01% would be $1 trillion.
That’s why investing in blockchain tech is a perfect asymmetric bet: low downside with enormous potential upside.
Just a few hundred dollars invested in blockchain tech could turn into millions.
This could be the biggest tech trend in history.
Don’t be left out…
Let the Game Come to You!
Expectations are out of control…
Analysts expect the profits of S&P 500 companies to rise 50% over the next four years. As you can see in the chart below, recent trends indicate this is very unlikely.
Last month, we told you about the games analysts play with earnings estimates…
They start estimates low to justify higher price targets. But then, they slowly reel them back in when they can no longer ignore reality.
The market has these unrealistic expectations priced in.
We don’t want to fight the trend of a rising market, but we need to make sure our stocks don’t have unrealistic projections.
How to Invest Using Trump’s Tweets: President Trump’s chaotic Twitter feed can make or break a company with a single mention. Now, you can easily trade against positive or negative sentiment and make a little money in the process. Trump2Cash is an app that lets you invest automatically whenever the president mentions a publicly traded company. You can learn more about the app right here.
Cash No Longer King: The European Commission is exploring a union-wide ban on large transactions. The new restrictions are based on the usual suspects: terrorists, criminals, and money launderers. But as we’ve warned in the Daily, the War on Cash is all about creating a cashless society so governments can monitor and tax every financial transaction you make. One winner emerging from this war is bitcoin. More and more people are seeing it as an alternative to fiat currencies.
Bitcoin Investing Surges: Meanwhile, investment in bitcoin-based technology startups is exploding. In 2012, there was hardly any money flowing into these types of startups. By 2016, it had grown to $550 million. Although the cryptocurrency space is still relatively young, it’s starting to mature. We’re likely to see even more funding in bitcoin as it hits its mass adoption point (MAP).
The current bull market has raged on for almost nine years… But now, it’s getting pretty long in the tooth.
Master trader Jeff Clark believes we’re due for a crash or correction. Thanks to his three-part crisis warning system, he’s successfully predicted the last four major market crashes. Two of the warning signs in his system just lit up. And he thinks the third will trigger in May.
So this Wednesday at 8 p.m., Jeff’s holding an emergency briefing. You’ll learn what the third trigger is… and if it happens, how to insulate your portfolio.
You can sign up immediately for this free event by clicking the signup button below. There’s no need enter your email address. By clicking the button, we’ll automatically reserve your spot for Jeff’s live emergency briefing.