The Blockchain Frenzy Brewing Now
Just look at what’s happening around cryptos and blockchain at the moment…
100% gain from just one announcement
Bloomberg reports that stock in Eastman Kodak doubled after it announced a cryptocurrency called KodakCoin.
The rationale? According to Bloomberg, ‘a photocentric cryptocurrency to empower photographers and agencies to take greater control in image rights management.’
I can’t say I’m convinced by the business case for that one.
But it demonstrates to me that the general investor psychology around the world is switching from fear of losing what they have, to fear of missing out on the potential gains on offer. That’s true of both stocks and crypto.
Over in the US, retail investors are pouring more money into the stock market in nearly 20 years.
This is exactly what we need to see to take the market into a big peak over the next two years.
There’s a ‘melt up’ brewing.
The institutional guys will keep warning about stretched ratios like price to earnings, compared to historical norms.
The general public won’t care. They’ll have that I-wanna-get-rich-quick feeling.
It’s not completely crazy, either. The evidence that it’s possible is right there in the crypto market.
There are crypto investors up six figures in a matter of months. Some up millions.
These stories have the potential to warp people’s expectations about what to expect from investing, way beyond what is reasonable.
Retail punters will see the big gains, and discount the risks run to get them, if they even think about them at all.
They’ll see the big names from the last tech boom, which generated massive returns.
Everyone will be hunting for the next Apple or Google to emerge from something around blockchain or the crypto sector.
We’ll see a big IPO (or ICO) somewhere down the line, too, I’m sure. Something more to feed the brewing frenzy.
That’s my forecast over the next 24 months anyway.
Markets can coast on the momentum from this for a long time. Long term, the stock market is due to heat up in a big way, if you ask me.
Blockchain technology is taking us in that direction.
Editor, The Daily Reckoning Australia