In the first edition of CRYPTO TREND we introduced Crypto Currency (CC) and answered several questions about this new market space. There are many NEW products in this market every day. Here are some highlights that give us a glimpse of how new and exciting this market space is:
The world’s largest futures exchange 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] hire for the list. You can’t short bitcoin today, so there’s only one way to do it. You either 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 this year pending regulatory review. If successful, this will give investors a viable way to go “long” or “short” Bitcoin. Some exchange-traded fund sellers have also solicited bitcoin ETFs that track bitcoin futures.
These developments have the potential to allow people to invest in the cryptocurrency space without owning CC 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. This 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, which are not affected by money laundering concerns.
CME’s move also suggests that bitcoin has become too big to ignore, as the exchange appeared to write off crypto futures in the recent past. Bitcoin is just about all anyone is talking about at brokerages and trading firms, which have suffered amid rising but unusually placid markets. If futures on one exchange took off, it would be nearly impossible for any other exchange, such as the 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’s not going to go away,” Duffy said in an interview with CNBC. There are “major companies” that want access to bitcoin and there is “huge pent-up demand” from customers, he said. Duffy also thinks that introducing institutional traders to the market could make bitcoin less volatile.
The Japanese people will use cryptocurrency 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 new approach, and they may seek 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 any value, especially if the ICO turns out to be another joke or scam. Bitcoin was certainly no joke.
INITIAL COIN OFFERING – ( ICO )
We didn’t mention ICO in the first edition of Crypto Trend, so let’s mention it now. Unlike an initial public offering (IPO), in which a company has an actual product or service for sale and wants you to buy shares in its company, anyone who wants to start a new Blockchain project with the intention of creating a ICO can have an ICO. a new token in your chain. ICOs are unregulated and several have been total shams. However, a legitimate ICO can raise a lot of cash to fund a new Blockchain project and network. It is typical for an ICO to generate a high token price near the start and then come back down shortly after. Since an ICO is relatively easy to sustain if you know the technology and have a few dollars, there have been many, and today we have about 800 tokens up for grabs. All of these tokens have a name, they are all cryptocurrency, 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” right now 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 every transaction to tax them all. They all have huge debt and no cash.
So far, the cryptocurrency market has avoided many problems and financial pitfalls from government and mainstream banks, 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 never be generated – 21 million – thus ensuring that this cryptocurrency 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, but make no mistake, early investing in this industry will only be for your most speculative capital, money you can afford to lose.
CRYPTO TREND will be your guide if you are ready to invest in this market space.