In the first issue of CRYPTO TREND, we introduced cryptocurrency (CC) and answered a few 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 idea of how new and exciting this market space is:
The world’s largest futures exchange to create a bitcoin futures contract
Terry Duffy, president of the Chicago Board of Trade (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. Either you buy it or you sell it to someone else. So you create a two-way market, I think it’s always much more efficient. “
CME intends to release bitcoin futures by the end of the year pending regulatory review. If it succeeds, it will give investors a viable way to go “long” or “short” on bitcoin. Some exchange-traded vendors have also submitted documents for bitcoin ETFs that track bitcoin futures.
These developments have the potential to allow people to invest in cryptocurrency space without directly owning a CC or using the services of a CC exchange. Bitcoin futures could make the digital asset more useful by allowing consumers and intermediaries to hedge their currency risks. This can 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 are not plagued by money laundering worries.
CME’s move also suggests that bitcoin has become too big to ignore, as the exchange seems to have ruled out crypto futures in the recent past. Bitcoin is almost everything that is talked about in brokerage and trading companies, which have suffered against the background of growing but unusually calm markets. If futures on an exchange rise, it would be almost impossible for any other exchange, such as CME, to catch up, as scale and liquidity are important in derivatives markets.
“You can’t 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 “major companies” that want access to bitcoin and there is a “huge hold back” from customers, he said. Duffy also believes that attracting institutional traders to the market may make bitcoin less volatile.
A Japanese village will use cryptocurrency to raise capital to revive the municipality
The Japanese village of Nishiawakura is exploring the idea of conducting an initial coin offering (ICO) to raise capital to revive the municipality. This is a very new approach and they can ask for support from the national government or seek private investment. Several 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 scam. Bitcoin was definitely not a joke.
INITIAL OFFER OF COINS – (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), in which a company has an actual product or service for sale and wants to buy shares from their company, an ICO can be conducted by anyone who wants to initiate a new Blockchain project with the intention of creating a new one. token on their chain. ICOs are unregulated and some of them are completely fake. However, the legal 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 token price near the beginning and then return to reality soon after. Because ICO is relatively easy to hold if you know the technology and have a few dollars, there were a lot 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 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 the ‘Wild West’ at the moment and we recommend caution. Some investors and early adopters have made big 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. They all have huge debts and are limited to money.
Until now, 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 a finite 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 delve into specific recommendations, but make no mistake, early investing 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.
Stay on the line!