Lots of folks are asking about this one, so we’re pulling it to the top of the page again — the article below has not been updated or revised since it ran on March 10, though in the interim the stock teased bumped from $10 to $13 and is now back down below $12, with solid recent earnings… it now trades for about 19X 2016 estimated earnings and growth expectations remain about the same as they were in March.
It’s now been quite a while since the Bitcoin mania peaked, but there’s still a lot of curiosity around that virtual currency — particularly because of the “millionaire” stories that circulated when it was in its ridiculous runup in dollar value a couple years ago… so I guess it’s natural that the idea of the “next bitcoin” still has some traction.
This time, however, it’s not about one of the other “next bitcoin” cryptocurrencies — but about something that they folks at True Alpha are calling an “alternative currency” that’s already in use in households around the country: reward points.
This reward points story has been circulating for a while now, and our readers had some good discussion of it and proposed solutions (mostly correct ones) when it first started getting attention last Fall, but I never wrote about it. Now, though, the questions are piling up again… and the latest version of the ad is spilling hype out over the top of the jug even more than usual, so I thought I’d quickly chime in and give it the Thinkolator treatment for you.
The spiel is from Robert Williams, and most version of it that I’ve seen are still dated October 2014 — though I’ve had the ad sent to me quite a few times in just in the last couple days. Here’s how they describe this “alternative currency” …
“An alternative currency – already in circulation across America – could soon explode in value.
“As you’re about to discover, it could hand you as much as $56,700 over the next 9-12 months.
“Some people are already calling it the ‘next Bitcoin.’ And that’s saying a lot.
“As you may know, Bitcoin is the digital ‘cryptocurrency’ that has disrupted economies worldwide. It has also made some investors a fortune along the way.
“Over the course of just three years, Bitcoin’s value skyrocketed more than 1,632,316%.”
Which, of course, does not make you think of the word “currency” — currency is something you use for transactions, and if it’s jumping around in value like that no one is going to either offer or accept it in transactions… for a while there, bitcoin might have doubled in value while someone was in the process of trying to use it to make a purchase. Bitcoin did rise that ridiculous amount over three years, but essentially all of the jump came in 2013 when it went from about $10 to over $1,000 — until then falling by 70% or so since then.
(I bought a few bitcoin to check it out and experiment at the time, largely to see how it would work for money transfers and as a substitute for credit card and bank transfers that generate such large fees… and I think I still have something less than a full bitcoin in my Coinbase wallet, for full disclosure — it didn’t end up being useful for me, but perhaps it will be someday.)
All of which is irrelevant to the point here — despite the value bitcoin has in capturing your attention. The point is that Williams is saying that “this one simple investment could put as much as $56,700 into your bank account over the next 9-12 months.”
And, of course, that was originally written back in October — so we should be at least halfway there, right?
Not so much… but more on that in a moment. Here’s the meat of the pitch:
“Another currency is poised to upset Bitcoin as the world’s No.1 cryptocurrency.
“In fact, it’s fast rivalling the dollar for many transactions online.
“Already, dozens of Wall Street banks including Morgan Stanley, BlackRock, Credit Suisse, Bank of New York Mellon, and Bank of America are amassing positions alongside this currency in their “in house” accounts.
“Forbes calls it ‘profit enhancing.’
“Business Insider says it has the potential of ‘taking over our wallets.’
“Bankrate.com says ‘You can beef up your individual retirement account with it.’Are you getting our free Daily Update
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“According to our research, this currency is about to boom – worldwide.
“One simple investment now could set you up for years. (And I can show you how to get started for less than $20 bucks!)”
So, as you have probably guessed, this “currency” is just a broad term that Williams is using to describe rewards points — the points you get for charging stuff to your special credit card, or using a particular airline or hotel chain or retailer, and that you can redeem for discounts or free stuff.
And no, Williams is not, at least, being crazy enough to suggest that people actually buy rewards points — though you can do so in many rewards programs, and I suppose it could make sense if you were just 100 airline miles away from a free trip to Tahiti or something like that… but is otherwise, of course, completely ridiculous.
If you’re curious, the stories that those quotes are from are perfectly ordinary articles about particular rewards points deals — like the Bankrate clickbait article about the variouos kinds of rewards programs, including some from Fidelity that will let you turn “points” into (very small) cash rewards deposited into an IRA or a 529 plan.
So what is this “explosive situation” that Williams says we have with this “alternative currency?”
Well, first Williams has to convince us that these “points” have great value… here he goes:
“Unlike Bitcoin – and even the U.S. dollar – this currency is backed by real, tangible assets.
“That makes it perhaps the only currency on Earth with intrinsic value.
“Some folks even prefer it over spending regular dollars.
“At any time, you can use it to buy a brand new Samsung HD TV, an iPhone 6, or even a fresh cup of coffee. And even if the U.S. dollar crashes, this currency’s buying power could skyrocket! (No, it’s not backed by gold.)
“For reasons you’re about to see,