Crypto TREND – Second Edition

In the first edition of crypto TREND, we introduced crypto Currency (CC) and answered several questions about this new market space. There are a lot of news in this market every day. Here are some highlights that give us a taste of the newness and excitement of this market space:

The world’s largest futures exchange will create a futures contract for Bitcoin

Terry Duffy, President of the Chicago Mercantile Exchange (CME) said, «I think in the second week of December you’ll see our [bitcoin futures] contract for registration. Today, you can’t short bitcoin, so there’s only one way to do it. Either you buy it or you sell it to someone else. So you create a two-sided market, I think it’s always much more efficient.»

CME intends to launch Bitcoin futures contracts by the end of the year pending regulatory review. If successful, this will give investors a viable way to go “long” or “short” on Bitcoin. Some exchange-traded fund vendors have also filed applications for bitcoin ETFs that track bitcoin futures.

These developments have the potential to allow people to invest in the cryptocurrency space without owning a CC 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 currency risks. This could increase cryptocurrency adoption by merchants who want to accept bitcoin payments but are wary of its volatile value. Institutional investors are also used to trading regulated futures contracts, which are not plagued by money laundering issues.

CME’s decision also suggests that bitcoin has become too big to ignore, as the exchange seemed to exclude crypto futures in the recent past. Bitcoin is pretty much the talk of the town at brokerages and trading firms, which have suffered amid rising but unusually quiet markets. If futures on one exchange took off, it would be next to impossible for another exchange, like CME, to catch up, as scale and liquidity are important in the derivatives markets.

«You can’t ignore the fact that this is increasingly becoming a story that won’t go away,» Duffy said in an interview with CNBC. There are “mainstream businesses” wanting access to bitcoin and there is “huge pent-up demand” from customers, he said. Duffy also thinks bringing institutional traders into the market could make bitcoin less volatile.

Japanese village to use cryptocurrency to raise capital for municipal revitalization

The Japanese village of Nishiawakura is exploring the idea of ​​holding an initial coin offering (ICO) to raise capital for municipal revitalization. This is a very new approach, and they can seek national government support or seek private investment. Several ICOs have had serious problems, and many investors are skeptical of the value of any new token, especially if the ICO turns out to be another joke or scam. Bitcoin was definitely no joke.


We didn’t mention ICO in the first 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 to sell and wants you to buy shares of their company, an ICO can be owned by anyone who wants to start a new Blockchain project with the intention to create a new token on their chain. ICOs are unregulated and several have been total shams. A legitimate ICO, however, 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 start and then come back to reality soon after. Because an ICO is relatively easy to hold if you know the technology and have a few dollars, there have been a lot of them, and today we have around 800 tokens in play. All of these tokens have a name, they are all cryptocurrencies, and with the exception of very well-known tokens, such as Bitcoin, Ethereum and Litecoin, they are nicknamed alt-coins. Currently, 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 urge caution. Some investors and early adopters have made significant profits in this market space; however, many have lost much, if not everything. Governments are considering regulations because they want to know every transaction in order to tax them all. They are all in huge debt and short of money.

So far, the cryptocurrency market has avoided many financial problems and pitfalls from government and conventional banks, and Blockchain technology has the potential to solve many other problems.

A great feature of Bitcoin is that the creators have chosen a finite number of coins that can be generated – 21 million – thus ensuring that this crypto coin can never be inflated. Governments can print as much money (fiat currency) as they want and inflate their currency to death.

Future articles will dive deeper into specific recommendations, however, make no mistake, investing in this sector early 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 tuned!


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