In the first edition of CRYPTO TREND we presented Crypto Currency (CC) and answered several questions about this new market space. There is a lot of NEWS in this market every day. Here are some highlights that give us an idea of how new and exciting this market space is:
The world’s largest futures exchange will create a futures contract for Bitcoin
Terry Duffy, Chairman of the Chicago Mercantile Exchange (CME) said: “I think sometime in the second week of December you will see our [bitcoin futures] listing contract. Nowadays you can’t short bitcoin so there is only one way to do it. Either you buy it or sell it to someone else. So you create a two-sided market, I think it’s always much more efficient.”
CME intends to launch Bitcoin futures later in the year pending a regulatory review. If successful, this will give investors a viable way to go “long” or “short” Bitcoin. Some sellers of exchange-traded funds have also applied for bitcoin ETFs that track bitcoin futures.
These developments have the potential to allow people to invest in the cryptocurrency space without owning CC directly or using the services of a CC exchange. Bitcoin futures could make the digital asset more useful by allowing users and brokers to hedge their currency risks. That could increase cryptocurrency adoption by merchants who want to accept bitcoin payments but are wary of its volatile value. Institutional investors are also used to trading regulated futures, which are not plagued by money laundering concerns.
The CME move also suggests that Bitcoin has become too big to ignore, as the exchange seemed to write off crypto futures in the recent past. Almost everyone is talking about Bitcoin at brokerage houses and trading firms, which have suffered amid rising but unusually placid markets. If futures on one exchange were to take off, it would be almost impossible for any other exchange, like CME, to catch up, as scale and liquidity are important in derivatives markets.
“You can’t ignore the fact that this is increasingly becoming 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 pent-up demand” from customers, he said. Duffy also believes that bringing institutional traders into the market could make Bitcoin less volatile.
Japanese Village to Use Crypto to Raise Capital for Municipal Revitalization
The Japanese town of Nishiawakura is investigating the idea of holding an Initial Coin Offering (ICO) to raise capital for municipal revitalization. This is a very novel approach, and they can request support from the national government or seek private investment. Several ICOs have had serious problems and many investors are skeptical that any new token has value, especially if the ICO turns out to be another hoax or scam. Bitcoin was certainly not a joke.
INITIAL COIN OFFERING – ( ICO )
We did not mention ICO in the first edition of Crypto Trend, so let’s mention it now. Unlike an Initial Public Offering (IPO), where a company has an actual product or service for sale and wants you to buy shares in their company, anyone who wants to start a new Blockchain project with the intention of creating a ICO can have it. a new token on your chain. ICOs are unregulated and several have been total shams. However, a legitimate ICO can raise a large amount of cash to fund a new Blockchain project and network. It is typical for an ICO to generate a high token price near the beginning and then come back to reality soon after. Because an ICO is relatively easy to maintain if you know the technology and have a few dollars, there have been many, and today we have around 800 tokens up for grabs. All of these tokens have a name, they are all cryptocurrencies, and except for the well-known tokens like Bitcoin, Ethereum, and Litecoin, they are called altcoins. At this time, Crypto Trend does not recommend participating in an ICO, as the risks are extremely high.
As we said in #1, this market is the “Wild West” at the moment, and we advise caution. Some investors and early adopters have made huge profits in this market space; however, there are many who have lost much, or everything. Governments are considering regulations as they want to know about every transaction in order to tax them all. They all have a lot of debt and no cash.
Until now, the cryptocurrency market has avoided many conventional government and banking financial pitfalls and pitfalls, and Blockchain technology has the potential to solve many more problems.
A great feature of Bitcoin is that the creators chose a finite number of coins that can be generated (21 million), which ensures that this crypto currency can never be inflated. Governments can print as much money (fiat currency) as they want and inflate their currency to death.
Future articles will delve into specific recommendations, however, make no mistake, investing early in this sector will only be for your most speculative capital, money that you can afford to lose.
CRYPTO TREND will be your guide as long as you are ready to invest in this market space.
Stay tuned!