In the first edition of CRYPTO TREND we introduced cryptocurrency (CC) and answered a few questions about this new market space. Every day in this market a lot of NEWS. Here are some highlights that give us an idea of how new and exciting this market is:
The world’s largest futures exchange for creating futures contracts on 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] contract for listing. Today you can’t short bitcoin, so there is only one way. 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 intends to launch bitcoin futures by the end of the year pending regulatory review. If successful, it will give investors the opportunity to go “long” or “short” on Bitcoin. Some stock market vendors have also filed applications for bitcoin ETFs that track bitcoin futures.
These developments can allow people to invest in cryptocurrency space without having direct CC rights 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 could increase the spread of cryptocurrency by traders who want to accept payments in bitcoins but fear its volatile value. Institutional investors are also accustomed to trading in regulated futures that do not suffer from money laundering.
The CME move also suggests that bitcoin has become too big to ignore, as in the recent past the exchange seemed to have ruled out crypto futures. Bitcoin is all that everyone is talking about in brokerage and trading firms, which have suffered against the background of growth, but unusually calm markets. If futures on the exchange soared, it would be virtually 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 it’s becoming more and more a story that won’t go away,” Duffy said in an interview with CNBC. There are “major companies” that want to access bitcoin, and there is “huge deferred demand” from customers, he said. Duffy also believes that attracting institutional traders to the market could make bitcoin less volatile.
The Japanese village will use cryptocurrency to raise capital to revive the municipality
The Japanese village of Nishiawakura is exploring the idea of holding an initial coin placement (ICO) to raise capital to revive the municipality. This is a very new approach and they may 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, of course, was no joke.
Initial coin supply – (ICO)
We didn’t mention ICO in the first edition of Crypto Trend, so let’s mention that now. Unlike an initial public offering (IPO), when a company has a real product or service for sale and wants you to buy their company’s shares, an ICO can be held by anyone who wants to initiate a new Blockchain project with the intention of creating a new token on their chain. ICOs are unregulated, and some have been outright falsified. However, 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 token price near the beginning and then return to reality soon after. Because ICOs are relatively easy to hold if you know the technology and have a few bucks, 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 alt 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 cautious. Some investors and first users have made big profits in this market space; however there are many who have lost much or all. Governments are considering the rules because they want to know about every deal to tax them. They all have huge debts and no money.
So far, the cryptocurrency market has avoided many government and conventional banking financial problems and pitfalls, and Blockchain technology can solve many more problems.
A remarkable feature of bitcoin is that the authors have chosen the 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 discuss specific recommendations, however, make no mistake, early investment in this sector will only be on your most speculative capital, money you can afford to lose.
CRYPTO TREND will be your guide when and when you are ready to invest in this market space.