In the first edition of CRYPTO TREND we introduced Crypto Currency (CC) and answered some questions about this new market space. There is a lot of NEWS in this market every day. Here are some of the highlights that give us a glimpse of how new and exciting this space is in the market:
The largest futures exchange in the world 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 [bitcoin futures] listing contracts. Today you can not cut bitcoin, so there is only one way that can go. You 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 aims to launch the future of Bitcoin by the end of the year pending regulatory review. If successful, it will give investors a practical way to go “long” or “short” in Bitcoin. Some Exchange Trader Fund sellers have also filed applications for Bitcoin ETFs that pursue the future of bitcoin.
These developments have the potential to allow people to invest in cryptocurrency space without fully owning CC, or using the services of a CC exchange. The future of Bitcoin could make digital wealth more profitable by allowing users and brokers to hedge their foreign exchange risks. This may 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 regulated futures, which are not plagued by money laundering concerns.
The CME move also suggests that bitcoin has become too large to be ignored, as the exchange seemed to rule out the future of crypto in the recent past. Bitcoin is just for anyone talking to brokers and trading firms, which have suffered amid growing but extremely quiet markets. If futures on an exchange were to rise, it would be nearly impossible for any other exchange, such as the CME, to capture, as scale and liquidity are important in fuel markets.
“You can not ignore the fact that this is becoming more and more a story that will not go away,” Duffy said in an interview with CNBC. There are “ordinary companies” that want access to bitcoin and there is “huge closed demand” from customers, he said. Duffy also thinks that bringing institutional traders to market can make Bitcoin less volatile.
Japanese village to use cryptocurrency to raise capital for municipal revitalization
The Japanese village of Nishiawakura is exploring the idea of holding an Initial Coin Offer (ICO) to raise capital for municipal revitalization. This is a very new approach, and they may require national government support or private investment. Some ICOs have had serious problems and many investors are skeptical that any new token will have value, especially if the ICO turns out to be another joke or hoax. Bitcoin was certainly not a joke.
FINANCIAL OFFER Currency – (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 a current product or service for sale and wants you to buy shares in their company, an ICO can be held by anyone who wants to start a new Blockchain project with the purpose of creating a new token in their chain. ICOs are unregulated and some have been total scams. 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 symbol price near the start and then dive back into reality immediately after. Because an ICO is relatively easy to maintain if you know the technology and have some money, there have been many, and today we have about 800 arguments in play. All of these tokens have a name, they are all cryptocurrencies and except for the very popular tokens, like Bitcoin, Ethereum and Litecoin, they are called alt coins. At this time Crypto Trend does not recommend participating in an ICO, as the risks are extremely high.
As we said in number 1, this market is the “wild west” right now, and we are recommending caution. Some early investors and adopters have made huge profits in this market space; however, there are many 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 owe a lot and are busy for money.
So far, the cryptocurrency market has avoided many financial problems and financial pitfalls of government and conventional banks, and Blockchain technology has the potential to solve many other problems.
A great feature of Bitcoin is that the creators chose a limited number of coins that can ever 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 be included in specific 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.