In the first edition of CRYPTO TREND we introduced Crypto Currency (CC) and answered several questions about this new market space.  There is a lot of NEWS in this market every day.  Here are some highlights that give us a glimpse of how dynamic 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 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 somebody else.  So you create a two-sided market, I think it’s always much more efficient.”

CME intends to launch Bitcoin futures starting on December 10, 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 have also filed for bitcoin ETF’s that track bitcoin futures.

These developments have the potential to allow people to invest in 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 increase the cryptocurrency’s 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, which aren’t plagued by money-laundering worries.

CME’s move also suggests that bitcoin has become too big to ignore, since the exchange seemed to rule out crypto futures in the recent past. 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 took off, it would be nearly impossible for any other exchange, like CME, to catch up, since scale and liquidity is important in derivatives markets.

“You can’t ignore the fact that this is becoming more and more of a story that won’t go away,” said Duffy in an interview with CNBC. There are “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 could make bitcoin less volatile.

Japanese village to use crypto currency to raise capital for municipal revitalization

The Japanese village of Nishiawakura is researching the idea of holding an Initial Coin Offering (ICO) to raise capital for municipal revitalization.  This is a very novel approach, and they may ask for national government support or seek private investment.  Several ICO’s  have had serious problems, and many investors are sceptical that any new token will have value, especially if the ICO turns out to be a another joke or scam.  Bitcoin certainly was no joke, but it was the first, and now there are many imitators, some of which may overtake Bitcoin eventually.

INITIAL COIN OFFERING –  ( ICO )

We did not 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 for sale and wants you to buy shares in 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 several have been total shams, whereas IPO’s are regulated to ensure that investors are provided the information needed for due diligence.  A legitimate ICO can however raise a lot of cash to fund a new Blockchain project and network.  It is typical for an ICO to generate a high token price near the start and sink back to reality soon after.  Because an ICO is relatively easy to hold if you know the technology and have a few bucks, there have been many, and today we have about 800 tokens in play.  All these tokens have a name, they are all crypto currency, and except for the very well known tokens, like Bitcoin, Ethereum, and Litecoin, they are dubbed alt-coins.  At this time 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 are recommending caution.  Some investors and early adopters have made large profits in this market space; however, there are many who have lost a lot, or all.  Governments are considering regulations, as they want to know about every financial transaction in order 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 has the potential to solve many more problems.

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

Future articles will delve into specific recommendations, however, make no mistake, investing in this sector will be only for your most speculative capital, money that 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!

Everyone has heard how Bitcoin and other crypto currencies have made millionaires of those who bought as recently as a year ago.  Gains of 1,000% or more are not just possible, they have been common place with many of these crypto currencies. Someone who bought Bitcoin in May 2016 at less than $500, would have had a gain of 1,400% in about 17 months. Then over the past few days, we saw Bitcoin lose almost $1,000, so to say these cryptocurrencies are volatile would be a massive understatement.

Since the inception of Bitcoin in 2008, we at Trend News have been skeptical of crypto currencies’ ability to survive, given that they present a very clear threat to governments who want to see and tax all transactions. But while we may still be cautious on the actual crypto currencies, we are very aware of the potential of the underlying technology that powers these electronic currencies. In fact, we believe that this technology will be a significant disruptor in how data is managed, and that it will impact every sector of the global economy, much like how the internet impacted media.

Here are some questions & answers to get started…

Q: What are Crypto Currencies ?

The most well known crypto currency (CC) is BITCOIN.  It was the first CC, started in 2008.  Today there are more than 800 CC’s, including Ethereum, Litecoin, Dash, Zcash, Ripple, Monero, and they are all “virtual”.  There are no “physical” coins or currency.

Q: How do CC’s work ?

CC’s are virtual currencies that exist in very large distributed databases.  These databases use BLOCKCHAIN technology.  Because each Blockchain database is widely distributed, it is thought to be immune to hacking, as there is no central point of attack and every transaction is visible to everyone on the network.  Each CC has a group of administrators, often called “miners”, who validate transactions.  One CC called Ethereum uses “smart contracts” to validate transactions.  Crypto TREND will provide more details in upcoming news publications.

Q: What is BLOCKCHAIN ?

Blockchain is the technology that underpins all CC’s.  Each transaction for the purchase, sale, or exchange of CC’s is entered into a BLOCK that is added to the chain. This technology is complex and will not be explained here, but it has the potential to revolutionize the financial services industry, as transactions can be executed quickly and easily, reducing or eliminating fees.  The technology is also being examined for applications in many other industries.

Q: Are CC Exchanges regulated by government ?

For the most part, the answer is NO, which, for some users, is a big attractions of this market.  It is the “wild west” right now, but governments in most developed countries are examining this market to decide what regulation may be needed.  A big decision is whether to treat CC’s as a currency or a commodity / security.  Canada and USA have so far declared that CC’s are legal, however the situation remains fluid as for reporting and tax implications.  Crypto TREND will be following and reporting on these developments.

Q: How do I invest in this market ?

You can buy, sell, and exchange CC’s using the services of specialized “Exchanges” that act as a brokerage.  You start by selecting an Exchange , setting up an account, and transferring fiat currency into your account.  You can then place your BUY and SELL CC orders.  There are many exchanges around the world.  Opening an account is fairly simple and these exchanges all have their own rules about initial funding and withdrawals.

Crypto TREND will be recommending CC Exchanges in future.

Q: Where do I keep my CC ?

To have the freedom to move your crypto currencies around, and to pay bills, you will need to have a digital wallet.  These wallets come in several formats, such as desktop, cloud based, hardware (USB), mobile phone, and paper. Many of them are FREE, however, security is a big factor as no one ever wants to lose their wallet or have it stolen.  Crypto TREND will be recommending digital wallets in future.

Q: What can I do with my CC ?

As well as investing in CC products, you can also use crypto currency for some financial transactions, such as money transfers and paying bills.  The list of companies accepting crypto currency is growing fast, and includes big hitters like Microsoft, GAP, JC Penny, Expedia, Shopify, Bloomberg.com, Dish Network, Zynga, Subway, and WordPress.

Q: What’s next ?

As we start off, we will keep each of the Crypto TREND articles short and keep the scope of each one as narrow as possible. As we noted earlier, we believe that the crypto currency technology will be a game changer and potential investment opportunities like this come by once or twice in a lifetime. Make no mistake, early investing in this sector will be only for your most speculative capital, money that you can afford to lose.

Even if you are not wanting to invest at this time, gaining an early understanding of this new disruptive technology will put you in an advantageous position to profit from our recommendations as we move forward.

Expect to see more news and specific recommendations from Crypto TREND as we start this journey into what may seem to be a foreign jungle at first.  This is a volatile market and may not appeal to all investors, however, Crypto TREND will be your guide if and when you are ready.

Stay Tuned!