Crypto Riches for Investors - Part 8
Abraham George Crypto Musings
Read Part 1, Part 2, Part 3, Part 4, Part 5, Part 6 and Part 7 if you haven’t already.
If you have been following my writings you know about how I missed investing in Amazon and Bitcoin. Both instruments were the best performing in their space. Finally, I got to invest in Tanla Platforms which turned out to be the best performing stock in India for the last five years out of 7000 scrips. Tanla has not run its course as yet and has much higher potential. More on that in a future report.
Though I have been studying and understanding cryptos for many years, I started investing only in Oct 2020 with my first investment in XRP. Since then I have added XLM, XDC, and VeeChain. But my major holding is XRP. I may add more to XRP if the price falls further. I strongly believe XRP could be the major winner from all the 19,500 tokens over a long period of time. I will highlight some more important anecdotal evidence if that will help you to understand its value.
XRP has partnered with almost 350 financial institutions worldwide but most of them are outside the US. 90 % of its clients are outside the US and many of which are governments that have declared XRP as a currency and not a security.
You all know how much Warren Buffett and Charlie Munger detest cryptos. I will show you how Warren Buffett is indirectly invested in XRP. When Bank of America adopted XRP, there was an increased investment in BOA from Buffett at the expense of selling his other bank investments. Buffett is also a major investor in SBI Holdings of Japan, which is one of the original investors in Ripple and the single biggest investor holding almost 10% of Ripple. Another major investor in SBI holdings is Rothschild. If you know your banking history well enough, there is no need to emphasize what importance the Rothschilds hold in banking.
I attached a video in my last report about the 43rd treasurer of the United States, Rosie Rios making a speech in Dubai at the Future Innovation Conference where she said that her signature is on 90% of all the dollars that is in circulation. I think that is very symbolic of what XRP is going to do in the payment space.
XRP is going to be the Internet of value. They will move money across various payment systems as the information travels with email. Currently XRP process about 1500 transactions per second (tps) burning 0.00001 of a penny. Last year they burned approximately 5 mln dollars worth of tokens but that is nothing. It will not be the just payments that will be transacted on the XRPL. You will be able to make IPOs, credit checks, bonds, and commodities transactions, you name it. Be prepared to see one million transactions per second increasing the burn rate but it will matter less as the price of XRP will be rising too. With a finite number of 100 billion tokens, any burning of tokens is deflationary and will add more value to the existing token holders.
The Flare network is a group of talented computer developers that will bring smart contract capability to the XRP ecosystem. Flare Sparks is a standalone crypto that will trade with its own symbol FLR on Exchanges.
Smart contracts are computer protocols that automatically execute terms of a contract or agreement. Think about the process that you will have when you buy or sell a house. There is the escrow account, title search, loans, mortgages, legal documents, etc. All of these processes can be automated with smart contracts. There are conditions to perform and either you perform or you don’t smart contracts can handle it all automatically. Now you are starting to see the power of blockchain.
As the XRP value rises you will be able to earn passive income by staking your XRP on the Flare network. That is a lengthy subject on its own which we will cover at a later stage.
Last Oct 2021, I’d written about the Kingdom of Bhutan and its involvement with XRP. If ever there is a carbon-free country in the world it will be Bhutan. The currency in Bhutan is called Ngultrum and it is 100% linked to the Indian Rupee. The purpose of Bhutan to partner with XRP was for them to develop a CBDC that will be applicable to wholesale, retail, and cross-border payments. 97% of Bhutan’s trade relationships are with India. So you can imagine how the Indian authorities will be monitoring this progress as they themselves are planning to introduce their CBDC.
For that matter, XRP has already partnered with all the major banks including Axis Bank, HDFC Bank, Federal Bank, Yes Bank, and ICICI Bank comprising of all most 80% of bank transactions. I strongly believe XRP will make a back entry with the Indian authorities in the very near future. XRP’s General Manager is a young American of Indian origin - Ashish Birla. He has already hinted about XRP’s focus on India. Another place where XRP is making their CBDC test case is in the small Pacific Island of Palau which is a fully dollarized economy.
In my past articles, I have touched much on this ongoing case with SEC. I have followed this case very closely since former SEC Chairman Jay Clayton very cowardly filed a case against XRP on his last day in office and left the scene. I have no doubt in my mind that this was an SEC conspiracy to stop XRP from progressing and promoting their self-interest and giving legitimacy to another token. The SEC has been caught like a monkey with its hands in the cookie jar. They can’t take their hand with the cookies nor can they run with the jar. This case is such a shame that the many policies and style of working at the top decision-makers at the SEC has been exposed.
Up to this point, Ripple has followed all the rules and their eminent lawyers have made the SEC lawyers look like clowns. Now the call from the public and the media is for Gary Gensler the SEC Chairman to leave the circus.
You can draw so many parallels to Putin’s involvement in Ukraine when you look at the SEC and Ripple story. Putin really thought capturing Ukraine was a two-day event and he will not face much pushback from the international community. In the same way, SEC thought with their style of regulation with enforcement they could bring a case against Ripple after eight years of its operation accusing them of wrongdoings that they never wanted to be accused or blamed for.
Having said that there are lone good voices in the SEC like Commissioner Heister Pierce who has been critical of some of the SEC policies but she has her limitations. Many senior managers (50+ years of experience) are leaving the SEC as they cannot stand the Chairman’s hypocrisy and demands.
Only the Congress has authority over the SEC to make changes and I am sure they are taking notice of all these developments. I am only waiting to see at what point will the two judges presiding over this case will lose their cool with the SEC, as they continue to frustrate and delay the process with the DOJ.
Finally, HODL (hold on to dear life) with your XRP holdings, and please move them from the exchanges and hold them on a hard wallet. It is a little cumbersome but you have to do it. As the saying goes, “not your keys, not your tokens”. Don’t worry, XRP will be the global standard in payments. There is much more to write but I want to close this series for now.
If you received value from this post, and you’d like to send some back, or if you’d like to signal to me to continue spending time on these types of explorations, feel free to buy me coffees (thank you!):
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Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and multi-billion dollar portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office and a hedge fund. Currently, he is a co-founder of a new hedge fund where foreign citizens can invest in Indian growth stocks like Tanla operating in hyper-growth markets like CPaaS.