In the initial edition of CRYPTO TREND we introduced Crypto Currency (CC) and answered several questions about this new market space. You will find a lot of NEWS in the forex market every day. Here are several highlights that give us a glimpse of how new and exciting this market space is:
World’s largest futures exchange to produce a futures contract for Bitcoin
Terry Duffy, president of the Chicago Mercantile Exchange (CME) said “I think sometime in the next week in December you’ll see our [bitcoin futures] contract out for listing. Today you cannot short bitcoin, so there’s only 1 way it can go. 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 by the finish of the entire year pending regulatory review. If successful, this can give investors a viable way to go “long” or “short” on Bitcoin. Some sellers of Exchange-Traded Funds have also filed for bitcoin ETF’s that track bitcoin futures.
These developments have the potential to allow people to spend money on the crypto currency space without owning CC’s outright, or utilizing the services of a CC exchange. Bitcoin futures could make the digital asset more useful by allowing users and intermediaries to hedge their foreign-exchange risks.
That could raise the cryptocurrency’s adoption by merchants who want to accept bitcoin payments but are cautious with its volatile value. Institutional investors are also used to trading regulated futures, which aren’t plagued by money-laundering worries.
CME’s move also shows that bitcoin has become too big to ignore, because the exchange seemed to rule out crypto futures in the recent past. Bitcoin is just about all anyone is talking about at brokerages and trading firms, that have suffered amid rising but unusually placid markets.
If futures at an exchange took off, it would be nearly impossible for just about any other exchange, like CME, to catch up, since scale and liquidity is essential in derivatives markets.
“You can’t ignore the proven fact that this is becoming more and more of a story that won’t disappear completely,” said Duffy in an interview with CNBC. There are “mainstream companies” that want access to bitcoin and there’s “huge pent-up demand” from clients, he said. Duffy also thinks bringing institutional traders in to the market could make bitcoin less volatile.
Japanese village to utilize crypto currency to raise capital for municipal revitalization
JAPAN village of Nishiawakura is researching the idea of holding an Initial Coin Offering (ICO) to improve capital for municipal revitalization. Bitcoin Cash Token This can be a very novel approach, plus they may require national government support or seek private investment.
Several ICO’s experienced serious problems, and many investors are sceptical that any new token could have value, particularly if the ICO turns out to be a another joke or scam. Bitcoin certainly was no laughing matter.
INITIAL COIN OFFERING – ( ICO )
We did not mention ICO in the initial edition of Crypto Trend, so let’s mention it now. Unlike a short Public Offering (IPO), in which a company has an actual product or service for sale and wants one to buy shares within their company, an ICO can be held by anyone who wants to initiate a new Blockchain project with the intention of creating a new token on the chain.
ICO’s are unregulated and several have been total shams. The best ICO can however raise a lot of cash to fund a new Blockchain project and network. It really is typical for an ICO to create a high token price near the start and then sink back to reality soon after.
Because an ICO is relatively easy to hold if you know the technology and have several bucks, there were many, and today we have about 800 tokens in play.
Each one of these tokens have a name, all of them are crypto currency, and except for the very well known tokens, like Bitcoin, Ethereum, and Litecoin, they’re dubbed alt-coins. At this time Crypto Trend does not recommend participating in an ICO, as the risks are extremely high.
Once we said in Issue 1, this market is the “wild west” at this time, and we are recommending caution. Some investors and early adopters have made large profits in this market space; however, there are numerous who have lost a lot, or all. Governments are considering regulations, as they want to know about every transaction in order to tax them all. They all have huge debt and so are strapped for cash.
So far, the crypto currency market has avoided many government and conventional bank 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 a finite number of coins that may ever be generated – 21 million – thus making certain this crypto coin can’t ever be inflated. Governments can print just as much money (fiat currency) as they like and inflate their currency to death.
Future articles will explore specific recommendations, however, make no mistake, early buying this sector will be limited to your most speculative capital, money that one could afford to lose.