In the first edition of CRYPTO TREND we introduced Crypto Currency (CC) and answered several questions about this new market space. There exists a lot of NEWS in the forex market every day. Here are a few highlights that give us a glimpse of how new and exciting this market space is:
World’s largest futures exchange to produce a futures contract for Bitcoin
Terry Duffy, president of the Chicago Mercantile Exchange (CME) said “I believe sometime in the second week in December you will 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 somebody else. So you create a two-sided market, I think it’s always much more efficient.”
CME intends to launch Bitcoin futures by the finish of the entire year pending regulatory review. If successful, this will give investors a viable way to go “long” or “short” on Bitcoin. Some sellers of Exchange-Traded Funds also have filed for bitcoin ETF’s that track bitcoin futures.
These developments have the potential to allow people to spend money on the crypto currency space without owning CC’s outright, or using the services of a CC exchange. Bitcoin futures could make the digital asset more useful by allowing users and intermediaries to hedge their foreign-exchange risks.
That could raise the cryptocurrency’s adoption by merchants who would like to accept bitcoin payments but are wary of its volatile value. Institutional investors may also be used to trading regulated futures, which aren’t suffering from money-laundering worries.
CME’s move also suggests that bitcoin has become too big to ignore, because the exchange seemed to eliminate crypto futures recently. Bitcoin is just about all anyone is discussing 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 proven fact that this is becoming a lot more of a story that will not go away,” said Duffy in an interview with CNBC. You can find “mainstream companies” that want usage of bitcoin and there’s “huge pent-up demand” from clients, he said. Bitcoin Cash Token Duffy also thinks bringing institutional traders in to the market could make bitcoin less volatile.
Japanese village to utilize crypto currency to raise capital for municipal revitalization
The Japanese village of Nishiawakura is researching the thought of holding an Initial Coin Offering (ICO) to raise capital for municipal revitalization. This is the very novel approach, plus they may require national government support or seek private investment.
Several ICO’s have had serious problems, and many 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 laughing matter.
INITIAL COIN OFFERING – ( ICO )
We didn’t mention ICO in the first edition of Crypto Trend, so let’s mention it now. Unlike a short Public Offering (IPO), where a company has an actual product or service for sale and wants one to buy shares within their company, 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.
ICO’s are unregulated and many have been total shams. The best ICO can however raise a lot of cash to fund a new Blockchain project and network. It really is typical for an ICO to create a high token price near the start and then sink back to reality soon after.
Because an ICO is not too difficult to hold once you learn the technology and have several bucks, there were many, and today we’ve about 800 tokens in play.
Each one of these tokens have a name, all of them are crypto currency, and aside from the very popular tokens, like Bitcoin, Ethereum, and Litecoin, they are dubbed alt-coins. At the moment Crypto Trend does not recommend taking part in an ICO, as the risks are extremely high.
As 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 several who have lost a whole lot, or all. Governments are thinking about regulations, as they need to know about every transaction so as to tax them all. Each of them have huge debt and are strapped for cash.
Up to now, the crypto currency market has avoided many government and conventional bank financial problems and pitfalls, and Blockchain technology gets the potential to solve many more problems.
A great feature of Bitcoin is that the originators chose a finite number of coins that may ever be generated – 21 million – thus making certain this crypto coin can’t ever be inflated. Governments can print just as much money (fiat currency) because they like and inflate their currency to death.
Future articles will delve into specific recommendations, however, make no mistake, early buying this sector will be only for your most speculative capital, money that you may afford to lose.