There's something coming that is going to be very big and all the major companies, from Amazon (NASDAQ:AMZN) to Google (NASDAQ:GOOG) to Apple (NASDAQ:AAPL), are all vying to control and own this new frontier. This could be as big and as ubiquitous as the Internet.
Who among these three players is going to win?
On Tuesday, Apple rolled out its new iPhone, along with the new Apple Watch, and something that didn't get a lot of attention called Apple Pay. Now all of these same technologies exist with other companies in one form or another, but what I see as the next big thing for all of the above-mentioned companies is going to be mobile payments.
But what if none of these companies are successful on the upcoming financial frontier, who will take the prize?
We've reached a point in our society where credit cards are incredibly important to everybody and are used to purchase just about everything. But, credit card technology is really old and vulnerable to theft and hacking, especially here in North America. Europe is better, as they have chips embedded in their credit cards making them much tougher to hijack.
As much as we all shop and purchase products online, there are still a great many of us who use credit cards in our everyday lives. Whether it's for buying a cup of coffee at Starbucks or shopping at the mall, credit cards are an indispensable part of our everyday lives. Now get ready, as all of that is about to change.
Apple Pay is technology that uses Near Frequency Communication (NFC) and is hoping to take the place of the credit cards in your wallet. So instead of using a regular plastic credit card, you would use Apple Pay on your iPhone or Apple Watch to pay for everything from groceries to clothing to whatever you purchase in brick-and-mortar stores. The good news about this is that it doesn't use credit card information to transfer your information to the merchant.
Compared to Google Wallet or Amazon's Mobile payment system, both of which have not caught on with the public, Apple has a loyal trusting fan base that could make this new type of payment ubiquitous and accepted in our everyday lives. Making technology simple is something that Apple has been doing for quite some time.
Will Apple conquer the new financial frontier? Yes and no, there is still one more player who could trump everyone. In the short term, I do think that Apple will have its technology adopted over the competing technologies from Amazon and Google.
The fourth stealth player who is sort of in the background at this time is Bitcoin. I did a post about this new form of payment sometime ago and found that it actually was a viable form of payment and charted just like any other market.
CHART LEGEND
1. All-time high for Bitcoin $1,163.00 November 30th, 2013
2. Key support
3. Key resistance
4. RSI below 50 and is negative
5. Trade Triangles are -100 and negative.
So what will happen in an Apple vs. Bitcoin world?
In the short-term, I expect that Apple will be the early leader in this field as more and more people adopt Apple Pay as an easy payment system. Apple has tied in with Visa, American Express, MasterCard who see Apple Pay as a way to cut down on fraud.
The longer-term presents an entirely different picture, one that I think will bring Bitcoin to the forefront of most financial transactions. Now I'm not talking about next week or next month or next year, I am talking five or ten years out as the younger generation finds confidence in this new world currency.
Bitcoin, just like the Internet, has had its share of growing pains. Look at how important the Internet is to us all now. Who do you know who's not online checking the weather, Facebook, stock prices and the latest news every day?
Bitcoin could well become the new world currency. It seems like a pipe dream now, but the Internet 20 years ago is not unlike BitCoin now, and look how the Internet has grown and become such a power in our lives.
In today's post I have a chart of Bitcoin with our Trade Triangles to show you just how this market has moved since its inception in 2009.
I remember my old Boy Scout motto, "Be Prepared." I think with that we should all be prepared for what the future is bringing.
Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
Adam,
I'm curious. It would seem that the -100 trade triangle event could be an indication of an absolute bottom of a recent down trend in any security. Given that these events are easily identifiable, first month, then week, finally daily, what are the 5, 10, 20, 50 follow on day probabilities of a market being up or down given such an event? That is, accumulate every -100 m->w->d trade triangle for a market, measure the price at the time of the event, and measure the price 5 days hence, 10 days hence, and so on. Do a simple TestUp / TestDown * 100 and give us the answers. Run the probability test for a cross section of the S&P 500 and I'm sure we'd all be curious about the results.