In the first edition of CRYPTO TREND we introduced Crypto Currency (CC) and answered a number of questions about this new market place. There is a lot of news in this market every day. Here are some highlights that give us a glimpse of how new and exciting this market place is:
The world’s largest futures exchange to create futures contracts for bitcoin
Terry Duffy, president of the Chicago Mercantile Exchange (CME), said, “I think you’ll see us in the second week of December. [bitcoin futures] Deal out for list. Today you can’t make short bitcoins, so there’s only one way it can go. You either buy it or sell it to someone else. So you create a two-way market, I think it’s always more effective.
CME wants to bring Bitcoin futures to market by the end of the year, with regular reviews pending. If successful, it will provide investors with an effective way to go “long” or “short” in Bitcoin. Some sellers of exchange-traded funds have also filed for those Bitcoin futures on Bitcoin ETFs.
These developments allow people to invest in the cryptocurrency space without CC solely owning them or using the services of the CC Exchange to make digital assets more efficient by allowing potential Bitcoin futures users and intermediaries to hedge their foreign exchange risk. It wants to accept bitcoin payments but is wary of its volatile value which could increase the acceptance of cryptocurrencies by merchants. Institutional investors are also used in regulated futures trading, which is not plagued by money laundering concerns.
The move by CME also implies that the neglect of Bitcoin has become too big, as the exchange has denied crypto futures in the recent past. Bitcoin is only talking about brokerage and trading firms, which have suffered in a growing but unusually peaceful market. If the futures of an exchange are closed, it is almost impossible for another exchange like CME to capture it, as scale and liquidity are important in the derivatives market.
In an interview with CNBC, Duffy said, “You can’t ignore the fact that it’s becoming a story that won’t go any further.” There are “mainstream companies” that want access to Bitcoin and there is “huge paint-up demand” from clients, he said. Duffy also thinks that institutional traders can make Bitcoin less volatile.
Japanese villages to use cryptocurrencies to raise capital for municipal revival
The village municipality of Nishiyakura in Japan is researching the idea of having an initial currency proposal (ICO) to raise capital for revival. This is a very fancy method, and they can seek help from the national government or seek private investment. Several ICOs have serious problems and many investors are skeptical that any new tokens will be worth it, especially if the ICO proves to be another joke or scam. Bitcoin was certainly no joke.
Primary Currency Supply – (ICO)
We didn’t mention ICO in the first version of Crypto Trend, so let’s mention it now. Unlike the initial public offering (IPO), where an organization has an actual product or service for sale and you want to buy shares in that company, the ICO can hold anyone who wants to create a new blockchain project by creating a new token in their chain. ICOs are uncontrollable and several are fairly shams. A legitimate ICO can raise a lot of cash for new blockchain projects and network funding. It is very common for ICOs to generate a high token price near the beginning and then soon sink into reality. Because if you know the technology and get some money, it is relatively easy to have an ICO, there are many and today we have about 800 tokens in the game. All of these tokens have a name, they are all cryptocurrencies, and they are dubbed Alt-coins except for very well known tokens like Bitcoin, Etherium and Litcoin. At the moment crypto trends do not recommend participating in any ICO, as the risks are extremely high.
As we said in Issue 1, this market is now “Wild West”, and we advise caution. Some investors and early adopters have made big gains in this market place; However, there are many people who have lost a lot or lost everything. Governments are considering regulations, because they want to know about every transaction to tax all of this. They all have huge debts and are stuck for cash.
So far, many government and conventional banks have avoided financial problems and issues in the cryptocurrency market, and blockchain technology has the potential to solve many more problems.
A great feature of Bitcoin is that the promoters chose a limited number of currencies that could ever be generated – 21 million – thus ensuring that these cryptocurrencies would never swell. Governments print as much money (fiat currency) as they can and spread their currency towards death.
Future articles will remove specific suggestions, but make no mistake, initially investing in this sector will only be for your maximum estimated capital, the money you can lose.
CRYPTO TREND will be your guide if you are ever ready to invest in this market.