In the first edition of CRYPTO TREND, we introduced Cryptocurrency (CC) and answered several questions about this new market area. There are many 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 futures contract for Bitcoin
Terry Duffy, president of the Chicago Mercantile Exchange (CME), said: “I think sometime in the second week of December, our [bitcoin futures] contract for listing. Today you cannot short bitcoin, so there is only one way it can go. You either buy it or you sell it to someone else. So you create a two-sided market, which I think is always more efficient.”
CME intends to launch Bitcoin futures by the end of the year pending regulatory review. If successful, it would give investors a convenient way to go “long” or “short” on Bitcoin. Some sellers of Exchange-Traded Funds have also applied 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 CC exchange services. Bitcoin futures can make the digital asset more useful by allowing users and intermediaries to hedge foreign currency exposure. This could increase the cryptocurrency’s adoption by merchants who want to accept bitcoin payments but are wary of its volatile value. Institutional investors are also accustomed to trading regulated futures without money laundering concerns.
CME’s move also shows that bitcoin is too big to ignore, as the exchange has ruled out cryptocurrency futures in the recent past. Bitcoin is all anyone is talking about at brokerages and trading firms, which are bullish but suffering amid unusually quiet markets. If futures on the stock market were to rise, it would be almost impossible for any other exchange like the CME to catch up, because scale and liquidity are essential in derivatives markets.
“You can’t ignore that this is becoming more and more a story that’s not going to go away,” Duffy said in an interview with CNBC. There are “major companies” looking to get into bitcoin and “huge pent-up demand” from customers, he said. Duffy also thinks that bringing institutional traders into the market could make bitcoin less volatile.
A Japanese village will use cryptocurrency to raise capital for municipal revitalization
The Japanese village of Nishiawakura is exploring the idea of holding an Initial Coin Offering (ICO) to raise capital for municipal revitalization. This is a very new approach and they can ask for support from the national government or seek private investment. Several ICOs have serious problems, and many investors are skeptical that any new token will gain value, especially if the ICO turns out to be another joke or scam. Bitcoin was certainly no joke.
INITIAL COIN OFFERING – ( ICO )
We didn’t mention ICO in the first issue of Crypto Trend, let’s mention it now. Unlike an Initial Public Offering (IPO), where a company has an actual 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 intention of creating one. a new mark in their chain. ICOs are unregulated and a few are outright fake. A legitimate ICO, however, 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 start and then quickly return to reality. If you know the technology and have a few dollars, it is relatively easy to sustain an ICO, because there are many, and today we have about 800 tokens. All these tokens have a name, they are all cryptocurrencies, and except for the very popular tokens like Bitcoin, Ethereum and Litecoin, they are called altcoins. Currently, Crypto Trend does not recommend participating in the ICO, as the risks are quite high.
As we said in Issue 1, this market is the “wild west” right now and we advise caution. Some investors and early adopters have made huge profits in this market space; however, there are many who lose most or all. Governments review regulations because they want to know about every transaction in order to tax them all. They are all heavily in debt and strapped for cash.
Until now, the cryptocurrency market has avoided many government and traditional 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 chose a limited number of coins that can ever be created – 21 million – thus ensuring that this crypto coin will never be inflated. Governments can print as much money (fiat currency) as they want and inflate their currencies.
Future articles will focus on specific recommendations, but make no mistake, early investment in this sector is only for your most speculative capital, money you can afford to lose.
CRYPTO TREND will be your guide when and if you are ready to invest in this market space.
Stay tuned!