In the first issue of CRYPTO TREND, we introduced cryptocurrency (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 insight into how new and exciting this market space is:
The world’s largest futures exchange to create futures contracts 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] listing agreement. You can’t cut bitcoin today, so there’s only one way it can go. Either buy it or sell it to someone else. So you create a two-way market, I think it’s always much more efficient. “
CME intends to launch Bitcoin futures by the end of the year pending regulatory review. If successful, it will provide investors with a sustainable way to go “long” or “short” on Bitcoin. Some stock market vendors have also reported bitcoin ETFs that track bitcoin futures.
These events can allow people to invest in cryptocurrency space without owning CC or using CC exchange services. Bitcoin futures could make digital assets more useful by enabling users and intermediaries to hedge against their foreign exchange risks. This could increase the adoption of cryptocurrency by traders who want to accept bitcoin payments but are wary of its volatile value. Institutional investors are also accustomed to trading in regulated futures, which are not bothered by money laundering worries.
The CME move also suggests that bitcoin has become too large to be ignored, as the exchange in the recent past seemed to rule out crypto futures. Bitcoin is almost everything anyone talks about in brokerage and trading firms, which have suffered amid growing but unusually peaceful markets. If futures on the stock market took off, it would be almost impossible to catch up with any other stock exchange, such as CME, because scale and liquidity are important in derivatives markets.
“You can’t ignore the fact that this is becoming more and more a story that won’t go away,” Duffy said in an interview with CNBC. There are “major companies” that want access to bitcoins, and customers have “huge backlog of demand,” he said. Duffy also thinks that introducing institutional traders to the market could make bitcoin less volatile.
The Japanese countryside uses cryptocurrency to raise capital to revitalize municipalities
The Japanese village of Nishiawakura is exploring the idea of holding an Initial Coin Offer (ICO) to raise capital to revitalize municipalities. This is a very new approach and they can ask for support from the national government or ask for private investment. Several ICOs have had serious problems, and many investors are skeptical that any new token will have value, especially if the ICO proves to be another joke or scam. Bitcoin was certainly not a joke.
FIRST OFFER OF MONEY – (ICO)
We didn’t mention ICO in the first issue 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 stakes in their company, an ICO can be held by anyone who wants to launch a new Blockchain project with the intention of creating a new token on their chain. ICOs are not regulated, and several are totally false. A legitimate ICO, however, can raise a lot of money to fund a new Blockchain project and network. It is typical for an ICO to generate a high token price initially and then return to reality soon after. Since the ICO is relatively easy to maintain if you know the technology and have a few dollars, there were a lot of them, and today we have about 800 tokens in play. All these tokens have their own name, they are all cryptocurrencies, and apart from very well-known tokens, such as Bitcoin, Ethereum and Litecoin, they are called alt-coins. Currently, Crypto Trend does not recommend participating in the ICO, as the risks are extremely high.
As we said in issue 1, this market is currently the “Wild West” and we recommend caution. Some investors and early users have adopted large profits in this market space; however, there are many who have lost much or all. Governments are considering regulations because they want to know about each transaction in order to tax them all. They all have huge debts and are tied to cash.
So far, the cryptocurrency market has avoided many government and conventional banking financial problems and pitfalls, and Blockchain technology has the potential to solve many more problems.
A great feature of Bitcoin is that the originators chose the final number of coins that can ever be generated – 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 currency to death.
Since the articles will delve into certain recommendations, however, make no mistake, early investment in this sector will only be for your most speculative capital, money you can afford to lose.
CRYPTO TREND will be your guide if and when you are ready to invest in this market space.