The first issue of CRYPTO TREND featured an introduction to Crypto Currency (CC) and several questions about this emerging market. Every day, this market is flooded with NEWS. Here are some highlights that give us a glimpse of how new and exciting this market space is:
World’s largest futures exchange to create a futures contract for Bitcoin
Terry Duffy, president of the Chicago Mercantile Exchange (CME) said “I anticipate that our [bitcoin futures] contract will go up for listing sometime in the second week of December. There is only one possible direction for bitcoin because it is currently impossible to short it. Either you buy it or you sell it to someone else. So you make a two-sided market; in my opinion, this is always much more effective.”
In anticipation of regulatory approval, CME plans to introduce Bitcoin futures by the end of the year. If successful, this will give investors a viable way to go “long” or “short” on Some exchange-traded fund vendors have also submitted applications for bitcoin ETFs that track bitcoin futures.
These developments may make it possible for individuals to invest in the crypto currency market without actually owning any CCs or using a CC exchange’s services. Bitcoin futures may increase the usefulness of the digital asset by enabling users and intermediaries to hedging their foreign exchange risks. This might encourage businesses to accept bitcoin as payment even though they are hesitant to do so due to its volatile value. Regulated futures trading, which is not fraught with concerns about money laundering, is also common practice among institutional investors.
Given that the exchange previously appeared to rule out crypto futures, CME’s move also suggests that bitcoin has grown to be too important to ignore. At brokerages and trading companies, which have suffered in the midst of rising but unusually calm markets, Bitcoin is essentially all that is being discussed. Since scale and liquidity are crucial in the derivatives markets, it would be nearly impossible for any other exchange, like CME, to catch up if futures at one exchange took off.
“You can’t ignore the fact that this is becoming more and more of a story that won’t go away,” said Duffy in a CNBC interview. There are “mainstream companies” that want access to bitcoin and there’s “huge pent-up demand” from clients, he said. Additionally, according to Duffy, the market could become less volatile if institutional traders entered it.
Japanese village to use crypto currency to raise capital for municipal revitalization
In order to raise money for municipal revitalization, the Japanese village of Nishiawakura is exploring the idea of holding an Initial Coin Offering (ICO). This is a very innovative strategy, and they might look for private funding or national government support. Many investors are skeptical that any new token will have value because a number of initial coin offerings (ICOs) have had significant issues. This is especially true if the ICO turns out to be yet another joke or scam. Bitcoin was most definitely no joke.
INITIAL COIN OFFERING – ( ICO )
ICO will now be mentioned since it was not covered in the first issue of Crypto Trend. An ICO can be held by anyone who wants to start a new Blockchain project with the intention of creating a new token on their chain, unlike an Initial Public Offering (IPO), which is where a company has an actual product or service for sale and wants you to buy shares in their company. Since they are not regulated, many ICOs have proven to be complete scams. To finance a new Blockchain project and network, a legitimate ICO can raise a significant amount of money. An ICO frequently generates a high token price right at the beginning before quickly returning to reality. There have been many because holding an ICO is relatively simple if you understand the technology and have a few dollars, and as of right now, there are about 800 tokens active. With the exception of the very well-known tokens like Bitcoin, Ethereum, and Litecoin, all of these coins have names, they are all forms of digital currency, and they are referred to as “alt-coins.” Due to the significant risks, Crypto Trend does not currently advise taking part in ICOs.
As we said in Issue 1, this market is the “wild west” right now, and we are recommending caution. Some early adopters and investors in this market have made sizable profits, but many others have lost most or all of their money. Regulations are being considered by governments because they want to be aware of every transaction so they can tax them all. They are all deeply in debt and in financial trouble.
Up until now, the financial issues and pitfalls faced by governments and traditional banks have been avoided by the crypto currency market, and blockchain technology has the potential to address a wide range of additional issues.
The fact that the creators of Bitcoin decided to limit the total number of coins that can ever be created to 21 million ensures that this digital currency can never be artificially inflated. Governments are free to print as much fiat currency as they want and artificially inflate their currency to infinity.
However, make no mistake, early investments in this sector will only be for your most speculative capital, money that you can afford to lose. Future articles will delve into specific recommendations.
If and when you are prepared to make an investment in this market, CRYPTO TREND will be your guide.
Stay Tuned!