In the first edition of CRYPTO TREND, we introduced cryptocurrency (CC) and answered a few questions about the 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 for the creation of 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] enter into a contract for listing. Today you can’t short bitcoin, so there is only one way. You either buy or sell 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 legal review. If successful, it will give investors a viable way to go for “long” or “short” bitcoin. Some exchange traders have also applied for bitcoin ETFs that track bitcoin futures.
These developments can allow people to invest in the cryptocurrency space without having a direct CC or using the services of a CC exchange. Bitcoin futures can make a digital asset more useful by allowing users and resellers to hedge their currency risks. This may increase the acceptance of cryptocurrency by traders who want to accept bitcoin payments but are wary of its variable value. Institutional investors are also accustomed to trading in regulated futures that do not suffer from money laundering worries.
The CME move also suggests that bitcoins have become too large to be ignored because the exchange in the recent past seemed to rule out crypto futures. Bitcoin is almost everything that is said in brokerage and trading firms, which have suffered against the background of growth, but unusually calm markets. When futures on an exchange took off, it would be virtually impossible to catch up with any other exchange, such as CME, as scale and liquidity are important in derivatives markets.
“You can’t ignore the fact that it’s becoming more and more a story that won’t go away,” Duffy said in an interview with CNBC. According to him, there are “major companies” that want to access bitcoin, and “huge borrowed demand”. Duffy also believes that attracting institutional traders to the market could make bitcoin less volatile.
The Japanese village will use cryptocurrency to raise capital for municipal restoration
The Japanese village of Nishiyakura is studying the idea of holding a Primary Coin Supply (ICO) to raise capital for municipal restoration. This is a very new approach and they can ask for government support or turn to private investment. Several ICOs have had serious problems, and many investors are skeptical that any new token will matter, especially if the ICO turns out to be another joke or scam. Bitcoin was definitely not a joke.
FIRST COIN OFFER – (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), when a company has a real product or service for sale and wants you to buy shares in their company, an ICO can be conducted by anyone who wants to initiate a new blockchain project with the intention of creating a new brand on their chain . ICOs are not regulated, and several have been completely fictitious. A legitimate ICO can raise a lot of money to fund a new Blockchain project and network. It is typical for an ICO to generate a high price of tokens in the beginning and then return to reality again. Because ICOs are relatively easy to hold, 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 of these tokens have a name, they are all cryptocurrencies, and with the exception of very well-known tokens such as Bitcoin, Ethereum and Litecoin, they are called alternative coins. At this time, Crypto Trend does not recommend participating in the ICO, as the risks are extremely high.
As we said in Issue 1, this market is now a “wild west,” and we recommend being careful. Some investors and early investors made big profits in this market space; however there are many who have lost much or all. Governments are reviewing regulations because they want to know about each transaction in order to tax them. 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 creators have chosen the final number of coins that can ever be obtained – 21 million – thus ensuring that this crypto coin will never be inflated. Governments can print as much money (fiat currency) as they like and inflate it to death.
Future articles will delve into specific recommendations, however, make no mistake, early investments in this sector will only be earmarked for your most speculative capital – money you can afford to lose.
CRYPTO TREND will be your guide when and when you are willing to invest in this market space.