In the initial edition of CRYPTO TREND we introduced Crypto Currency (CC) and answered several questions relating to this new market space. There is a lot of NEWS in the forex market every day. Here are some highlights that give us a glimpse of how new and exciting this market space is:
World’s largest futures exchange to make a futures contract for Bitcoin
Terry Duffy, president of the Chicago Mercantile Exchange (CME) said “I think sometime in the second week in December you’ll see our [bitcoin futures] contract out for listing. Today you cannot short bitcoin, so there’s only one way it can go. You either buy it or sell it to someone else. So you create a two-sided market, I think it certainly is much more efficient.”
CME intends to launch Bitcoin futures by the finish of the year pending regulatory review. If successful, this can give investors a viable way to go “long” or “short” on Bitcoin. Some sellers of Exchange-Traded Funds have also filed for bitcoin ETF’s that track bitcoin futures.
These developments have the potential to permit people to spend money on the crypto currency space without owning CC’s outright, or utilizing the services of a CC exchange. Bitcoin futures will make the digital asset more useful by allowing users and intermediaries to hedge their foreign-exchange risks.
That could increase the cryptocurrency’s adoption by merchants who want to accept bitcoin payments but are wary of its volatile value. Institutional investors may also be used to trading regulated futures, which aren’t plagued by money-laundering worries.
CME’s move also suggests that bitcoin has become too large to ignore, since the exchange seemed to rule out crypto futures recently. Bitcoin is just about all anyone is talking about at brokerages and trading firms, which have suffered amid rising but unusually placid markets.
If futures at an exchange became popular, it would be nearly impossible for any other exchange, like CME, to catch up, since scale and liquidity is essential in derivatives markets.
“You can’t ignore the fact that this is becoming more and more of a story that wont go away,” said Duffy within an interview with CNBC. You can find “mainstream companies” that want access to bitcoin and there’s “huge pent-up demand” from clients, he said. Duffy also thinks bringing institutional traders into the market will make bitcoin less volatile.
Japanese village to utilize crypto currency to raise capital for municipal revitalization
JAPAN village of Nishiawakura is researching the idea of holding an Initial Coin Offering (ICO) to raise capital for municipal revitalization. This can be a very novel approach, plus they may ask for national government support or seek private investment.
Several ICO’s have had serious problems, and several investors are sceptical that any new token could have value, especially if the ICO actually is a another joke or scam. Bitcoin certainly was no joke.
INITIAL COIN OFFERING – ( ICO )
We didn’t mention ICO in the initial edition of Crypto Trend, so 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 would like to initiate a new Blockchain project with the intention of creating a new token on the chain.
ICO’s are unregulated and several have been total shams. A legitimate ICO can however raise lots of money to fund a fresh Blockchain project and network. It is typical for an ICO to generate a high token price close to the start and then sink back again to reality soon after.
Because an ICO is relatively easy to hold if you know the technology and have a few bucks, there were many, and today we have about 800 tokens in play.
Each one of these tokens have a name, they are all crypto currency, and except for the very well known tokens, like Bitcoin, Ethereum, and Litecoin, they’re dubbed alt-coins. At this time Crypto Trend does not recommend participating in an ICO, because the risks are extremely high.
Once we said in Issue 1, the forex market is the “wild west” at this time, and we are recommending caution. Some investors and early adopters have made large profits in the forex market space; however, there are numerous who have lost a whole lot, or all. Governments are considering regulations, as they need to know about every transaction as a way to tax them all. They all have huge debt and are strapped for cash.
So far, the crypto currency market has avoided many government and conventional bank financial problems and pitfalls, and Blockchain technology gets the potential to solve a lot more problems.
A great feature of Bitcoin is that the originators opt for finite number of coins that can ever be generated – 21 million – thus making certain this crypto coin can’t ever be inflated. Bitcoin Cash Token Governments can print as much money (fiat currency) because they like and inflate their currency to death.
Future articles will explore specific recommendations, however, make no mistake, early buying this sector will be only for your most speculative capital, money that you could afford to lose.