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 to give us an impression of how exciting and new this market is:
The world's largest futures exchange to create futures contracts for Bitcoin
Terry Duffy, president of Chicago Trade Exchanges (CME), said: "I think sometime in the second week of December we will see our (bitcoin futures) listing contract. You can't shorten bitcoin today, so there's only one way you can buy it or sell it to someone else. So, create a two-sided market, I think it's always much more efficient. "
CME intends to launch bitcoin futures by the end of the year, awaiting regulatory review. If successful, this will give investors a viable way to go "long" or "short" on Bitcoin. Some exchange traded fund sellers have also requested a bitcoin ETF that tracks bitcoin futures.
These developments can potentially enable people to invest in cryptocurrency without owning a CC, or using CC exchange services. Bitcoin futures can make digital material more useful by allowing users and intermediaries to hedge against their foreign exchange risks. This could increase the adoption of cryptocurrency by traders who want to accept bitcoin payments but are wary of its volatile value. Institutional investors are also used to trading regulated futures that are not preoccupied with money laundering concerns.
The CME move also suggests that bitcoin has become too big to be ignored, as the exchange seems to have ruled out crypto futures in the recent past. Bitcoin is almost everything everyone is talking about in brokerages and trading firms, which have suffered in growing but strangely quiet markets. If futuristic exchanges were to be launched, it would be almost impossible for any other exchange, such as CME, to make up for it since scale and liquidity are important in derivative markets.
"You can't ignore the fact that this is becoming more and more of a story that won't escape," Duffy said in an interview with CNBC. There are "mainstream companies" that want access to bitcoin and there is a "high pent-up demand" of clients, he said. Duffy also thinks that bringing institutional traders to the market could make bitcoin less volatile.
The Japanese village uses cryptocurrency to raise capital to revitalize municipalities
The Japanese village of Nishiawakura is exploring the idea of holding an Initial Coin Offer (ICO) to raise capital for the revitalization of municipalities. This is a very new approach and they may seek support from the national government or seek private investment. Several ICOs have had serious problems, and many investors doubt that any new token will have value, especially if the ICO turns out to be another joke or scam. Bitcoin was certainly no joke.
HOME MONEY OFFER – (ICO)
We didn't mention the ICO in the first issue 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 for sale and wants you to buy shares in their company, an ICO can be held by anyone who wants to launch a new Blockchain project with the intention of creating a new mark on their chain. ICOs are unregulated and several are totally false. 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 to return to reality shortly thereafter. Since the ICO is relatively easy to stick with if you know the technology and have a few dollars, there are many and today we have about 800 tokens in the game. All these tokens have a name, all are cryptocurrencies, and apart from very famous tokens, such as Bitcoin, Ethereum and Litecoin, they are called alt coins. At this point, Crypto Trend does not recommend participating in an ICO, as the risks are extremely high.
As we said in issue 1, this market is the "wild west" right now, and we recommend caution. Some investors and early adopters have made huge profits in this market space; however, there are many who have lost a lot, or all. Governments are considering regulations because they want to know about each transaction so they are taxed. They all have huge debt and are strapped for cash.
So far, the cryptocurrency market has avoided many government and conventional financial problems and bank traps, and Blockchain technology has the potential to solve many more problems.
A great feature of Bitcoin is that the initiators have chosen a limited number of coins that can ever be created – 21 million – ensuring that these crypto coins 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 based on specific recommendations. However, make no mistake, investing early 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 with us!