In the first release of CRYPTO TREND, we introduced Crypto Currency (CC) and answered many questions about this new market space. There is a lot of news in this market every day. Here are some highlights that give us a glimpse into the new extent and excitement of this market space:
The world’s largest futures exchange to create a Bitcoin futures contract
“I think sometime in the second week of December you will see our site,” said Terry Duffy, CME president. [bitcoin futures] Out of contract for inclusion. Today you cannot short Bitcoin, so there is only one way you can go. Either you buy it or sell it to someone else. So you create a two-sided market, which I think is always more efficient. “
The Chicago Mercantile Exchange plans to launch bitcoin futures contracts by the end of the year pending regulatory review. If successful, it would give investors a viable way to buy or purchase Bitcoin. Some ETF sellers have also placed requests for Bitcoin ETFs that track Bitcoin futures.
These developments have the potential to allow people to invest in the cryptocurrency space without directly owning CC, or using the services of CC exchange. Bitcoin futures can make digital assets more beneficial by allowing users and brokers to hedge foreign exchange risk. This could lead to an increased adoption of the cryptocurrency by merchants who want to accept bitcoin payments but are concerned about its volatile value. Institutional investors are also used to trading regulated futures contracts, which do not suffer from money laundering concerns.
CME’s move also indicates that Bitcoin is too big to be ignored, as the exchange appeared to rule out cryptocurrency futures in the recent past. Bitcoin is all that anyone in the brokers and trading houses has been talking about, which has struggled in the midst of unusually quiet emerging markets. If futures contracts take off on the exchange, it will be nearly impossible for any other exchange, such as the Chicago Mercantile Exchange, to catch up, given that volume and liquidity are important in the derivative markets.
“You can’t ignore the fact that more and more this is becoming a story that won’t go away,” Duffy said in an interview with CNBC. He said there are “major companies” that want access to Bitcoin and there is “huge pent-up demand” from clients. Duffy also believes that bringing institutional traders to the market may make Bitcoin less volatile.
Japanese village uses cryptocurrency to raise capital to revitalize municipalities
Nichiawakura, a Japanese village, is studying an Initial Coin Offering (ICO) contract to raise capital to revitalize the municipality. This is a very new approach, and they may seek support from the national government or seek private investment. Many ICOs have run into serious problems, and many investors doubt that any new token will have value, especially if the ICO turns out to be a joke or other scam. Bitcoin was definitely not a joke.
Initial Coin Offer (ICO)
We didn’t mention ICO in the first release of Crypto Trend, so let’s just mention it now. Unlike an Initial Public Offering (IPO), where a company has an actual product or service to sell 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 goal of creating a new token on their chain. The ICO’s are disorganized and many of them were complete hoaxes. However, a legitimate ICO could raise a lot of money to fund a new Blockchain project and network. It is typical for an ICO to create a high symbolic rate near the start and then return to reality soon after. Since it’s relatively easy to hold an ICO if you know the technology and have a few bucks, there have been many, and today we have around 800 tokens in action. All of these tokens have a name, they are all cryptocurrency, and with the exception of very well-known tokens, such as Bitcoin, Ethereum and Litecoin, they are called altcoins. At this time, Crypto Trend does not recommend participating in the ICO, as the stakes are very high.
As we said in Issue 1, this market is now the “Wild West”, and we recommend caution. Some investors and early adopters made big profits in this market space; However, there are many who have lost a lot or all. Governments study regulations because they want to know about every transaction in order to tax them all. All of them have huge debts and are tied for liquidity.
So far, the cryptocurrency market has avoided many government and traditional bank financial problems and pitfalls, and Blockchain technology has the potential to solve many other problems.
A great feature of Bitcoin is that the creators have chosen a limited number of currencies that can ever be created – 21 million – thus ensuring that this cryptocurrency is never amplified. Governments can print as much money (fiat currency) as they wish and inflate their currency to death.
Future articles will delve into specific recommendations, however, make no mistake, early investment in this sector will only be for the most speculative capital, which is money you can afford to lose.
CRYPTO TREND will be your guide if and when you are ready to invest in this market space.