In the first edition of CRYPTO TREND we introduced Crypto Currency (CC) and answered many questions about this new market space. There is a lot of NEWS in this market every day. Here are some highlights that give us a glimpse of how new and exciting this market area is:
The largest futures exchange in the world to create a futures contract for Bitcoin
Terry Duffy, president of the Chicago Mercantile Exchange (CME) said “I think sometime in the second week of December you will see our [bitcoin futures] contract for listing. Today you cannot short bitcoin, so there is only one way to do it. You can buy it or sell it to someone else. So you create a two-sided market, I think it’s always more efficient. “
CME intends to launch Bitcoin futures by the end of the year pending regulatory review. If successful, this will give investors a practical way to go “long” or “short” on Bitcoin. Some sellers of Exchange-Traded Funds have also filed for bitcoin ETFs that track bitcoin futures.
These developments have the potential to allow people to invest in the crypto currency space without directly owning CC, or using the services of a CC exchange. Bitcoin futures will make the digital asset more profitable by allowing users and intermediaries to hedge their foreign exchange risks. That could increase adoption of the cryptocurrency by merchants who want to accept bitcoin payments but are wary of its volatile value. Institutional investors are also used to trading regulated futures, without being bothered by money laundering concerns.
CME’s move also suggests that bitcoin has become too big to ignore, as the exchange seems to have held back crypto futures in the recent past. Bitcoin is almost all that is mentioned by any of the brokerage and trading firms, which has suffered in the midst of rising but unusually calm markets. When futures are on an exchange, it is almost impossible for any other exchange, such as CME, to catch up, because scale and liquidity are important in derivatives markets.
“You can’t ignore the fact that this has become more of a story that won’t go away,” Duffy said in an interview with CNBC. There are “mainstream companies” that want access to bitcoin and there is “huge demand” from clients, he said. Duffy also thinks that bringing institutional traders into the market will make bitcoin less volatile.
Japanese village to use crypto currency to raise capital for municipal revitalization
The village of Nishiawakura in Japan is exploring the idea of holding an Initial Coin Offering (ICO) to raise capital for the revitalization of the municipality. This is a new approach, and they can ask for the support of the national government or ask for private investment. Many ICOs have serious problems, and many investors are skeptical that any new token will have value, especially if the ICO turns out to be another joke or scam. Bitcoin is definitely no joke.
INITIAL COIN OFFERING – ( ICO )
We didn’t talk about ICO in the first edition of Crypto Trend, so let’s talk about it now. Unlike an Initial Public Offering (IPO), where a company has an actual product or service for sale and you want to buy shares in their company, an ICO can be held by anyone who wants to start one. new Blockchain project with the aim of creating. a new landmark in their chain. ICOs are unregulated and several have turned out to be total shams. A legitimate ICO can instead raise a lot of money to fund a new Blockchain project and network. It is common for an ICO to generate a high token price near the start and then sink into reality soon after. Because an ICO is easy to hold if you know the technology and have some money, there are many, and now we have about 800 tokens in play. All these tokens have a name, they are all crypto currencies, and except for the well-known tokens, such as Bitcoin, Ethereum, and Litecoin, they are called alt-coins. At this time Crypto Trend does not recommend participating in an ICO, because the risks are extremely high.
As we said in Issue 1, this market is the “wild west” right now, and we recommend caution. Some investors and early adopters have made huge profits in this market space; however, there are many who have lost much, or all. Governments consider regulations, because they want to know about every transaction to tax them all. They are all heavily in debt and strapped for cash.
Currently, the crypto currency market avoids many government and conventional bank finance problems and pitfalls, and Blockchain technology has the potential to solve many problems.
A good feature of Bitcoin is that the sources choose a limited number of coins that can be created – 21 million – thus ensuring that this crypto coin will never be inflated. Governments can print as much money (fiat currency) as they want and inflate their money to death.
Future articles will examine specific recommendations, however, make no mistake, the early investment in this sector is only for your most speculative capital, money that you can lose.
CRYPTO TREND is your guide if and when you are ready to invest in this market space.