Crypto Currencies: Rise of the Initial Coin Offering

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When looking at any of the financial media stories describing the main trends of this year, it has been hard to ignore the rise of the crypto currency. Investors have been learning about new digital terms like Bitcoin, Litecoin, and Blockchain, and the implications for the financial markets are massive in the long term, as these assets quickly move toward new record highs. Areas of the market are continually evolving – and there is no end in sight.

Primary evidence of this can be seen in the wide variety of Bitcoin alternatives that became available this year. Traditional investors have been somewhat skeptical of these trends. JPMorgan Chase CEO Jamie Dimon made comments that are now-famous with respect to the likely implications of these new digital assets. So it is not entirely surprising to see some portions of the market concerned about the potential risks involved in the development of these new assets.

The Initial Coin Offering.
Initial Coin Offering

One side of the argument suggests that these risks can be mitigated through the use of more communal trading outlets, where investors are able to mirror the positions of investors that might have more experience in these markets. The latest example of this in the economic world is the Covesting initial coin offering, which introduced the concept of peer-2-peer asset management to crypto currency markets. Also referred to as crypto copy trading, peer-2-peer trading platforms have become more commonly known in the foreign exchange and equity markets, and traders are looking to build on the successes of those tools in the crypto arena.

Future of Crypto Finance

With the growing list of initial coin offerings, this is an emerging part of the financial world that is still in the relatively early stages of development. Most of the initial coin offering standouts have altered the way traders look at the space as a whole. This opens the door for many similar market trends to unfold over the next few years.

Traders beginning to think about investments in these areas, should take a protective stance to avoid some of the volatility that can be seen in certain market contexts. Investors seem to be absorbing those risks, however, as the future of crypto currencies looks as though it is just beginning. Only time will tell if these assets will replace gold, silver, or even a reserve currency. At this stage, investors seem to be watching with growing interest.

Richard Cox is a syndicated writer with a PHD in macroeconomics and experience teaching the subject at the university level. He writes on a range of issues in the fields of geopolitics and the financial markets.