Global Market Comments
July 25, 2022
Fiat Lux
Featured Trade:
(MARKET OUTLOOK FOR THE WEEK AHEAD, or WHEN IS BREAKOUT TIME?),
(TSLA), (TLT)
This will be my last week of writing from the balcony of my chalet in Zermatt. I’ll try to bag a few more peaks over the weekend, then it is a long train ride with transfers in Visp, through the 12-mile stretch of the 125-year old Simplon Tunnel, then on to Milan and my Venice Strategy Luncheon.
Swiss trains run right on time, Italian ones not so much.
Stock markets have been trapped in a tedious range for three months now, from (SPX) 3,600 to 4,200, and are dead in the middle of that range. Earnings widely forecast to be awful came in moderate. With 20% of the S&P 500 reporting, revenues were up 10.5% and profit up 5%. These are not the torrid numbers seen in years past but are positive nonetheless.
This is not what recessions are made of.
Are we about to break out to the upside, downside, or do nothing?
I know the answer but it will take some ‘splanin to get you to understand how and why. I think this has all been one long bottoming process and what follows will be exciting, if not enthralling.
Everyone is hoping for one more capitulation selloff to buy into. The problem is that if too many people wish for something, it never happens.
The primary destroyer of markets this year has been energy-driven inflation. But oil prices peaked at $132 and have been falling ever since and are now off 35%. Oil is now the same price as when the Ukraine War started.
Gasoline has fallen too, some 15% since mid-June, lagging on the downside, as it always does.
Some long-sighted investors, like me, have already read the memo and have been buying. As a result, modest earnings shortfalls have allowed multiple expansion for six weeks now. ALL of the gains since then have come from multiple expansion, meaning the outlook for companies is now improving.
The only question now is whether we get one more selloff in August giving us another chance to load the boat. We could get a short-term peak this week when big tech reports, especially if they come up short. Terms like “hiring freeze”, “slowing revenues”, and “disappointing” might become commonplace.
Another peak could come at 8:30 AM on August 10 when the July CPI Report comes out. Even a modest gain will prompt a round of profit-taking. A decline and it could be a big one, and it’s off to the races.
The end result will be a massive yearend rally that could take the S&P 500 up 20% to 4,800. Individual high-growth stocks, like Tesla (TSLA) could rise by 50% or more.
Happy days will be back again.
The biggest threat to the markets right now may be coming from Europe, where things are clearly falling apart. There is a continuing war in Ukraine that could last for years. A Russian cutoff of natural gas threatens to trigger a deep recession.
Inflation in the UK hit 9.4%, a 40-year high. Heat-induced shutdowns are becoming common. Governments are falling like ten pins, such as in the UK and Italy. Currencies everywhere are in free fall.
Not our problem you may say. But some 30% of S&P 500 earnings come from Europe, especially for technology companies, which with a greenback at a 20-year high are shrinking by the day. Disaster in Europe could cut your retirement portfolio off at the knees, so you better help throw them a rope…. again.
Tesla Earnings Were a Mixed Bag, with revenues up to $16.93 billion for the quarter, a gain of 42% YOY, making it the fastest growing large car maker in the world. Solar energy and services also grew nicely. But margin is down from 33% to 27% QOQ due to high startup costs of the Berlin and Austin factories. That’s still 2.2 times better than the 12% margins seen at Big Three automakers and why it is still a long term “BUY.” The shares popped $100, clearly taking a “glass half full” view. Elon sold 75% of his Bitcoin, taking an implied $350 million paper loss from the top. Buy (TSLA) on dips.
Bonds Hit Two-Week High, boosted by Europe’s 50 basis point rate rise, the first in 11 years. Bonds and the US Dollar are starting to lose some of their yield advantage over the Euro. Recession fears continue to light a fire under bonds, as they have done since early June, taking yields down to 2.73 today.
Weekly Jobless Claims Hit 251,000, giving another recessionary hint, the highest since November. The trend remains up.
Nordstream One is Back Online, delivering 40% of its maximum capacity of natural gas to Germany, the prewar level. It had been down ten days for maintenance. But for how long? The German and the European economies are on a knife edge, and it’s the Russians who decide which way things go. Natgas prices sold off by 4.2%, thankfully.
The Euro Could Hit 90 Cents, a 20-year low, as the Russian gas cutoff hits hard before American supplies arrive on the scene in time. Talk of a 100-basis point Fed rate hike next week is pouring flames on the fire. It will certainly make US vacationers happy, who are seeing prices drop by the day.
Ukraine Sells $12 Billion in Gold, to finance the war with Russia. No wonder the barbarous relic has been trading so poorly.
Russia is Losing the War. I just spoke with the chairman of the British Chiefs of Staff Committee, their Joint Chiefs of Staff, and the one organization with the best read on Russian losses in the Ukraine War so far.
Russia has lost an incredible 2,000 tanks out of their initial 2,800 initial operational ones, and a further 4,000 armored vehicles. Russia has lost one-third of its army since February through deaths or injury, some 50,000 men.
Russia is now unable to defend itself from an attack from the West. Putin is assuming that we are nicer people than we actually are, always a fatal mistake. I can’t tell you why I know this, only that I do. All I can say is that the Internet, advanced hardware, encryption, and artificial intelligence are amazing things.
US Gasoline Prices Hit Two-Month Low, at $4.44 a gallon, suggesting that inflation is in retreat. But notice that they are falling faster than they rose, which is always the case in a rigged market. Prices have fallen for a record 35 consecutive days in a row. Credit recession fears and the administration release of one million barrels a day from the Strategic Petroleum Reserve.
Housing Starts Come in Weak, down 2% in June at 1.55 million seasonally adjusted. Housing Permits were weak at 0.6%, the lowest in ten months. Homebuilder Sentiment saw the biggest decline since the data started where firms are dropping prices. We are starting to see single-digit price drops in almost all markets. Phoenix is seeing the sharpest falls, followed by Austin, which saw the most speculative “flipping” activity.
Existing Home Sales Dive 5.4% in May, and down 14.2% YOY, reflecting the rising tide of woes affecting the housing market. Median prices are still rising, to $416,000, up 13.4% YOY. Some 5.12 million used homes were sold in May. Inventories rose for the first time in three years to a three-month supply.
Real Estate Prices Peaked Simultaneously all Over the World, for the first time ever. The frothiest markets in New Zealand and Australia have already seen a 13% fall. Of course, global interest rates moving up in synch is the cause. Matters were made worse in the land of the kiwis by a flood of Chinese money that abruptly ended with the pandemic. New Zealand has only 5 million residents, smaller than greater San Francisco.
China US Treasury Holdings Drop to a 12-Year Low of under $1 trillion. Few know that China is the world’s largest owner of US government debt, followed by Japan. Is this a political move, or have they simply turned bearish on bonds? My experience is that the Middle Kingdom is pretty good at making calls like this. They have a lot of friends in the market.
My Ten-Year View
When we come out the other side of pandemic and the recession, we will be perfectly poised to launch into my new American Golden Age, or the next Roaring Twenties. With oil peaking out soon, and technology hyper-accelerating, there will be no reason not to. The Dow Average will rise by 800% to 240,000 or more in the coming decade. The America coming out the other side will be far more efficient and profitable than the old. Dow 240,000 here we come!
With some of the greatest market volatility in market history, my July month-to-date performance maintained a healthy +2.01%.
My 2022 year-to-date performance maintained 52.86%. The Dow Average is down -13.5% so far in 2022. It is the greatest outperformance on an index since Mad Hedge Fund Trader started 14 years ago. My trailing one-year return maintains a sky-high 73.07%.
That brings my 14-year total return to 565.42%, some 2.55 times the S&P 500 (SPX) over the same period and a new all-time high. My average annualized return has ratcheted up to 44.93%, easily the highest in the industry.
We need to keep an eye on the number of US Coronavirus cases at 90.4 million, up 300,000 in a week and deaths topping 1,027,000 and have increased by 9,000 in the past week. You can find the data here.
On Monday, July 25 at 8:30 AM, the Chicago Fed National Activity Index for June is released.
On Tuesday, July 26 at 6:00 AM, the S&P Case Shiller National Home Price Index for May is out. New Home Sales for June are also released. Microsoft (MSFT) reports earnings.
On Wednesday, July 27 at 11:00 AM, the Federal Reserve is expected to raise interest rates by 75 basis points. A closely watched press conference follows. Meta (META) reports earnings.
On Thursday, July 28 at 8:30 AM, Weekly Jobless Claims are announced. We also get the initial read of Q2 GDP growth. Apple (AAPL) and Amazon (AMZN) report earnings.
On Friday, July 29 at 8:30 AM, the Personal Income & Spending are disclosed. At 2:00 the Baker Hughes Oil Rig Count are out.
As for me, it has been a lifetime desire of mine to fly a Supermarine Spitfire, the Royal Air Force fighter that won the 1940 Battle of Britain.
When I lived in London 40 years ago, there were only 15 flying examples in the world owned by the RAF and a handful of British billionaires who only flew them themselves. They were just too valuable to lend out.
By comparison, there were over 200 American P51 Mustangs, which you could buy from the government for scrap for $500 after the war ended.
Now in 2022, there are 70 flying Spitfires. A global network of warbird enthusiasts has rescued them from bogs, jungles, and scrap yards around the world and restored them to flying condition. It helped that the market value of these planes has shot up from $1 million to $5 million since 1982.
So when a Mad Hedge Concierge member Peter offered me his Spitfire for a day, I couldn’t wait to return to England.
There are very few people in the world who can fly prewar tailwheel configured airplanes. I have flown over a dozen different types. They are prone to ground loops, nose overs, scraping wing tips, and crashes. The airframes are usually made of Norwegian spruce and Irish linen and the wings can fall off at any time.
No wonder the fatality rate was so high in the old days. It helped that I went armed with my old British Aerobatics license along with a phalanx of American civilian and military licenses.
It was a cool and blustery afternoon when I showed up at Biggin Hill south of London, one of the top RAF fighter stations during WWII, and told Peter “Major John Thomas reporting for duty, sir.” He laughed and set about giving me my preflight briefing. Flying 80-year-old airplanes can be deadly. 70-year-old pilots are even more dangerous.
I was cautioned to move the stick gently as the controls are famously sensitive, thanks to the plane’s unique elliptical wing tips. No rudder was needed at all.
If the engine failed, I had the choice of parachuting out or risking a hard landing. I chose the latter, as Southern England is basically one big grass landing strip. Plus, I’ve had plenty of practice with this kind of maneuver.
For good measure, I brought along a safety pilot. They’ve moved the London control zone around a bit over the years, and I wanted to make sure you keep receiving Mad Hedge newsletter for the indefinite future. We took off, banked right, and headed for the English Channel.
While the plaque on the control panel read “DO NOT FLY OVER 350 MPH”, I dared not go faster than 250 MPH given the age considerations of both the plane and the pilot. Another plaque reading “EMERGENCY BOOST PUMP” was wired shut. The Merlin V-12 1,250 horsepower engine purred. Later versions of the plane with the 2,000 horsepower Griffin engine flew over 450 MPH.
The Spitfire could outmaneuver any plane the German Luftwaffe threw up against it. When Hitler asked my late acquaintance Luftwaffe General Adolph Galland what he needed to win the Battle of Britain, he replied, “A squadron of Spitfires.” German losses in the battle topped 2,000 planes versus 900 for the British.
But German crew losses were ten times that of the British. That meant an RAF pilot could get shot down and be in another plane in hours. That is what decided the Battle of Britain. The pilots were worth more than the planes. In the end, the British shot down two-thirds of the German Air Force, a loss from which they never recovered.
We found a clear piece of sky over the White Cliffs of Dover between two big fluffy cumulus clouds and commenced a full-on aerobatic flight test. Pilots always want to see what I can do in these old planes and this time was no different.
I executed multiple loops, barrel rolls, chandelles, lazy eights, Immelmann turns, and wingovers, careful never to exceed 1G lest, yes, the wings fall off. Spitfires can dive like crazy. We dropped from 8,000 feet to 2,000 feet in seconds.
While I was limited to one-inch moves of the stick, wartimes diaries speak of full right, full left, and steep dives to escape marauding Messerschmitt 109's and Focke Wulf 190's where pilots suffered 10G’s of force or more. The punishment those kids took was amazing.
The plane carried only two hours of fuel so after I passed my test with flying colors, it was back to Biggin Hill. Spitfires lacked IFR instruments because in 1938 they hadn’t been invented yet, so we were careful to avoid clouds. I made a perfect three-point landing on runway 27, as usual, and taxied up to the hanger where Peter greeted me.
Back at the hanger it took two men to haul me out of the plane, stinking, drenched with sweat, and elated. I felt like I had just done 15 rounds with Mike Tyson, but it was worth it.
Then it was off to the nearest pub for a well-earned pint of Guinness, as has long been the tradition of the RAF. The walls were adorned with the pictures of wartime Spitfire pilots who never made it back, some looking no older than teenagers, which they were.
That’s another bucket list item off the list. The time to get them all is running out, and I keep adding new ones, so I better get a move on.
I’ll be back next summer, for sure, because the commanding general of the RAF has invited me back to fly their sole surviving WWII Avro Lancaster four-engine bomber. It’s part of the Battle of Britain Memorial Flight, the fruit of contacts made during my NATO military duties. It is a national treasure.
It seems they’re short of pilots.
To watch a two-minute video of my epic flight, please click here.
Stay healthy,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
A 1943 Supermarine Spitfire Mark IX
Flying Upside Down Over the White Cliffs of Dover
Mission Accomplished
Back at the Pub for a Pint
Avro Lancaster Bomber
Mad Hedge Technology Letter
July 22, 2022
Fiat Lux
Featured Trade:
AUTOMATION AND BANKING)
(SQ), (PYPL), (APPL), (AMZN)
Automation is taking place at warp speed, displacing employees from all walks of life.
According to a recent report, the U.S. financial industry will depose of 200,000 workers in the next decade because of automating efficiencies.
Yes, humans are going the way of the dodo bird and banking will effectively become algorithms working for a handful of executives and engineers.
The x-factor in this equation is the $150 billion annually that banks spend on technological development in-house which is higher than any other industry.
Welcome to the world of lower cost, shedding wage bills, and boosting performance rates.
We forget to realize that employee compensation eats up 50% of bank expenses.
The 200,000 job trimmings would result in 10% of the U.S. banking sector getting axed.
The hyped-up “golden age of banking” should deliver extraordinary savings and premium services to the customer at no extra cost.
This iteration of mobile and online banking has delivered functionality that no generation of customers has ever seen.
The most gutted part of banking jobs will naturally occur in the call centers because they are the low-hanging fruit for automated chatbots.
A few years ago, chatbots were suboptimal, even spewing out arbitrary profanity, but they have slowly crawled up in performance metrics to the point where some customers are unaware that they are communicating with an artificially engineered algorithm.
The wholesale integration of automating the back-office staff isn’t the end of it, the front office will experience a 30% drop in numbers sullying the predated ideology that front office staff are irreplaceable heavy hitters.
The front-office staff has already felt the brunt of downsizing with purges carried out from 2022 representing a twelfth year of continuous decline.
Front-office traders and brokers are being replaced by software engineers as banks follow the wider trend of every company transitioning into a tech company.
The infusion of artificial intelligence will lower mortgage processing costs by 30% and the accumulation of hordes of data will advance the marketing effort into a smart, multi-pronged, hybrid cloud-based, and hyper-targeted strategy.
The last two human bank hiring waves are a distant memory.
The most recent spike came in the 7 years after the dot com crash of 2001 until the sub-prime crisis of 2008 adding around half a million jobs on top of the 1.5 million that existed then.
After the subsidies wear off from the pandemic, I do believe that the banking sector will quietly put in the call to trim even more.
The longest and most dramatic rise in human bankers was from 1935 to 1985, a 50-year boom that delivered over 1.2 million bankers to the U.S. workforce.
This type of human hiring will likely never be seen again in the U.S. financial industry.
Recomposing banks through automation is crucial to surviving as fintech companies like PayPal (PYPL) and Square (SQ) are chomping at the bit and even tech companies like Amazon (AMZN) and Apple (AAPL) have started tinkering with new financial products.
And if you thought that this phenomenon was limited to the U.S., think again, Europe is by far the biggest culprit by already laying off 63,036 employees in 2019, more than 10x higher than the number of U.S. financial job losses and that has continued in 2021 and 2022.
In a sign of the times, the European outlook has turned demonstrably negative with Deutsche Bank announcing layoffs of 40,000 employees through 2023 as it scales down its investment banking business.
Don’t tell your kid to get into banking, because they will most likely be feeding on scraps at that point.
THE LAST STAGE OF HUMAN-FACING BANK SERVICES IS NOW!
Global Market Comments
July 22, 2022
Fiat Lux
Featured Trade:
(MAD HEDGE NORWEGIAN FJORD CRUSE SEMINAR REVIEW)
It was a schedule I could easily get used to.
Up at dawn, four times around the deck to make a mile. On return, my butler set out a fine breakfast of bacon, eggs, toast, marmalade, fresh strawberries, and coffee in my private dining room.
Thus passed a week at the Mad Hedge Norwegian Fjord Strategy Seminar.
The HMS Queen Victoria had a coming-out party of its own. The ship was mothballed for two years because of the pandemic. Cunard used it to house grounded crew. This was only the second post-pandemic cruise.
As a result, more than half the crew were trainees, leaning their craft at your expense. The crew has gone all Filipino to save money. Nice people, but when you book Cunard, you expect to get at least a few limeys with their stiff British upper lips.
I couldn’t ask for more entertaining and knowledgeable guests.
One gentleman was the CEO of Party America, the world’s largest manufacturer and distributor of costumes. In a week, I learned more about the costume business than I ever thought I’d know. Manufacturing in Madagascar and selling around the world?
Who knew?
After an initial hit, the costume business boomed during the pandemic because people stayed at home and threw their own parties. It turns out that their business is driven by Hollywood films released two years down the road. The biggest all-time seller?
You guessed it, Harry Potter. But which one?
The company’s biggest risk was the 70th anniversary of the coronation of Queen Elisabeth II this year. Should they take the risk and mass-produce costumes knowing that there was only a 1:5 actuarial chance she would make it to 96? In the end, the Queen came through and they sold a staggering 1.5 million costumes, making millions.
Another guest was a northern English subcontractor who produced the M777 155 mm artillery piece widely used by the US Marine Corps. I know it well. No better way to land a lot of steel on a 20-mile target. Except that the newest version is made mostly of titanium, cutting its weight by half so it can be easily carried by helicopters.
I never stop learning.
The week had its own pleasant routine. We woke up each morning deep in a Norwegian fjord, bound by steep green mountains dotted with cottages and sheep farms. It all looked like a chocolate box cover. I walked into the village every day to eat lunch (lots of fish) and absorb the local economy and culture.
Then in the evening, we cast off ropes and sailed overnight to the next fjord. At 65 degrees north latitude, darkness didn’t fall on us until 11:00 PM and then while we were still asleep the sun rose at 3:30 AM. It never got completely dark, so the blindfolds came in handy.
Internet access was a problem. At this high latitude, you needed at least a 20-degree angle to reach geostationary equatorial satellites. That’s not possible when your ship was hugged by the steepest mountains on both sides. I could only collect email when we were on the open North Sea at night.
A wonderful time was had by all, and we dutifully exchanged contact information before we returned to home port in Southampton. On the ground, I shipped back a 50-pound suitcase with three tuxes, as every dinner was black tie. Definitely not needed for mountain climbing in Switzerland.
My bag is now struck in Los Angeles customs because nobody believed in this day and age that a guy could own three tuxes.
The Fjord seminar was such a success that I have already reserved another for 2023, the Mad Hedge Transatlantic Strategy Seminar, which I haven’t done for 11 years. It departs from New York City on July 7 and arrives in Southampton, England on July 14, 2023. Cunard refers to it as cruise M319 and I have already booked the owner’s suite, as I usually do.
I’ll see you there.
Mad Hedge Biotech and Healthcare Letter
July 21, 2022
Fiat Lux
Featured Trade:
(A BAD NEWS BUY HYPE)
(BIIB), (SAGE), (REGN)
Even when they’re on the dip, there are some stocks you should avoid. In a bear market, it’s always challenging to determine which stocks are good buys and which ones you should steer clear of at the moment.
Shares of biotechnology giant Biogen (BIIB) have plummeted by 40% in the past 12 months, clearly underperforming the broader market over the same period. While there are a lot of factors to consider, the drugmaker’s decline could be attributed to the controversial Alzheimer’s treatment Aduhelm.
Although Biogen’s shares are currently on sale, it doesn’t necessarily follow that the stock is a buy. So far, the company’s future still looks quite grim.
Admittedly, Aduhelm’s approval was an incredible milestone for the biotechnology industry. It was the first-ever FDA-approved Alzheimer’s disease therapy since 2003.
Unfortunately, it failed to live up to its potential. Actually, it didn’t even get close to fulfilling its promise.
Recapping the whole Aduhelm saga would take up more space than necessary, so here’s a quick rundown of the key events involving the controversial drug.
In June 2021, the FDA approved Biogen’s Aduhelm as an Alzheimer’s treatment.
The green light was a shock, especially since the FDA’s committee of experts adamantly voted against the drug, and the agency typically adheres to the group’s recommendations.
To appease the public, FDA required the biotech company to perform a post-approval study to re-confirm Aduhelm’s efficacy and safety. If the treatment fails, it must be taken off the market.
While Aduhelm became available commercially across the US by the second quarter of 2021, the drug failed to deliver on sales expectations. It only racked up a disappointing $3 million in revenue then.
By April 2022, the US Centers for Medicare and Medicaid Services (CMS) disclosed its coverage plan involving Aduhelm. It was limited to Alzheimer’s patients with mild cognitive impairment enrolled in clinical trials approved by CMS.
Biogen announced in May 2022 that it would drastically reduce its spending on commercial infrastructure focused on Aduhelm, owing in part to the CMS' limited coverage and possibly as a cost-cutting strategy. This move, which saved the biotech approximately $1 billion, reflects the company's loss of faith in Aduhelm and potential plans to abandon the project entirely.
Despite the Aduhelm fiasco, Biogen is still looking for Alzheimer's treatments.
The biotech completed a rolling submission to the for lecanemab in the same month it announced its decision to cut costs on Aduhelm infrastructures.
Lecanemab, which Biogen is developing alongside Esai (ESALY), is another Alzheimer’s therapy.
Lecanemab also works by getting rid of the beta-amyloid plaques in the brain. Understandably, it’s difficult to be too optimistic since it essentially has the same concept as Aduhelm.
Hence, Biogen needs a strong candidate to pull the company from this slump. Its revenue fell 6% year-over-year to $2.5 billion in the first quarter of 2022.
Biogen’s net income for the same period was $303.8 million, down from the $410.2 million it raked in the first quarter of 2021.
Most of Biogen’s revenue comes from its multiple sclerosis (MS) treatments. However, Tecfidera’s loss of exclusivity has allowed generic competition to chip away at their market share.
For context, the company’s total revenue from this segment in 2021 was $6.1 billion, which is 29% lower from 2020.
Meanwhile, Spinraza, another MS drug, hasn't experienced much growth either. In 2021, Spinraza recorded $1.9 billion in sales, falling by 9% from the $2.1 billion it reported in 2020.
Aside from its efforts in the Alzheimer’s and MS segments, Biogen also has other programs. It currently has 9 treatments queued for Phase 3 trials and several candidates for early-stage studies.
One promising prospect is its collaboration with Sage Therapeutics (SAGE). The two are working on zuranolone, which is a major depressive disorder treatment. The goal is to file for an NDA before 2022 ends and another NDA for postpartum depression by 2023.
Another prospect is its work on a biosimilar for Regeneron’s (REGN) top-selling macular degeneration therapy Eylea. This could lead to a lucrative market for Biogen since Eylea rakes in an average of $2.5 billion in revenues.
Needless to say, Biogen has so much riding on its pipeline programs. After all, it could no longer afford another spectacle like the Aduhelm episode. This is a critical reason that the stock is not looking attractively valued, particularly given the headwinds it’s facing.
Therefore, investors would be better off looking elsewhere right now. Declining revenues and earnings, exclusivity losses, growing competition, and no feasible catalyst on top of a struggling new product do not make any company—no matter how tumultuous the market—very attractive. Biogen may look cheap compared to other biotech and healthcare stocks, but it appears to have all the makings of a value trap.
Mad Hedge Bitcoin Letter
July 21, 2022
Fiat Lux
Featured Trade:
(HOW TO SET UP A CRYPTO TRADING ACCOUNT)
(BTC), (COIN)
I get many inquiries asking me how to set up an account to buy Bitcoin (BTC) and so it’s gotten to the point where I will walk new readers through the process of setting up a cryptocurrency account at Coinbase (COIN).
The signup process is actually highly straightforward and only takes minutes.
Why sign up for Coinbase?
This is an exchange that is highly popular and already has a large customer base.
Investors who can’t stomach the higher risk of exposing capital to an unregulated exchange should just dabble in bitcoin-connected ETFs which is completely reasonable.
Due to a spate of recent crypto exchange bankruptcies, some might be hesitant to get their capital tied up in bankruptcy hearings, but it’s my job to let readers know this option is out there.
COIN is still a major part of the crypto infrastructure.
Readers just only invest as much as they are willing to lose in crypto due to its higher than median volatility and underperformance the past 10 months.
Let’s get this party started.
1)
As many might assume, one must open their browser and head to www.coinbase.com to kick off the process. Once there — you’ll be greeted by an interface where the right choice is to click “sign up” in the upper right corner.
2)
A screen box pops up requiring personal information which is basically a full name, email address, password, and state. I am also assuming the user is from the United States. After clicking the agreement that the user is 18 years or older and consenting to the user agreement, click “Create account.”
3)
Technically, an account has now been created and a screen pops up offering $5 of Bitcoin if one verifies a photo ID which is completely optional. The screen let me know that it was a “limited time offer” so this offer might be gone when others sign up or it might still be there. Either way, click “Continue.”
4)
After the creation of the account, the next step is to click the verification link in the email that was provided. Simply go into the email inbox given, open the email, and click “Verify your email address.”
5)
The next step is to provide a phone number for a two-step verification. This added level of security, makes it so it’s difficult to use your account without your phone number. Select the country, enter the phone number, then click “Send code.”
6)
Enter correct authentication code sent to the phone number provided then click “Submit.”
7)
Select citizenship of the account holder then click “Submit.”
8)
Verify identity by filling in personal information including full name, date of birth, street address, city, last 4 digits of social security’s number, and zip code. Then answer a few more questions about what you will use Coinbase for, source of funds, and employment status then you’re good to go.
9)
The last step of verifying your info are two questions asking the user “How much do you expect to trade per year?” and “What industry do you work in?”
After you answer these two, then click “Submit.”
10)
That was the last of the personal questions and after clicking submit, the new user is directed to the trading interface showing a portfolio balance of $0.00. The next step is to click “Add payment method” in order to divert some fiat currency into the Coinbase account.
11)
There are different options available, and I personally chose “Bank Account” for its ease of use and free fees.
12)
A box pops up asking me to agree to the Plaid End User Privacy Policy. This is software that links Coinbase to your bank account.
For anyone who doesn’t want that linked, I would advise using one of the other three options.
Click “Continue” to proceed.
13)
Select your bank — provide your bank information.
14)
Bank Account is now linked — immediately buy any cryptocurrency available on Coinbase. Pat yourself on the back for a job well done!
