Crypto Currencies: Fact and Fiction

Crypto Currencies: Fact and Fiction

By Richard Cox

If there was a ‘person of the year’ for the financial markets the winner for 2017 would be the cryptocurrency.  Issuances like Bitcoin have taken the world by storm and the savvy market investor is wondering whether or not this is the harbinger of things to come.  The financial markets tend to work in very interesting trends, and the strength of the recent moves in the cryptocurrencies suggest that we will continue to see bullish activity in the space as long as investors look for an alternative store of value in times of geopolitical concerns or economic uncertainties.

Over the last decade, these types of circumstances have become even more obvious and with stock markets at record highs, investors have become more interested in the ways that cryptocurrencies work.  These are introduced to the markets through an initial coin offering (ICO), which gives the market an initial indication of the level of influence that is currently being directed toward that asset.  

Global Market Perception

What is most critical is the ability to separate the fact from the fiction encountered when investing in cryptocurrency.  This is because there can be quick changes for the price values at which these instruments trade and so it is critical that markets understand how global factors can influence trends.  Most critical can be the reception that is seen in the markets whenever there is an ICO as it can be an excellent gauge of the extent to which investors are interested in chasing the new trading instrument.

Some cryptocurrency platforms will actually allow traders to mirror the performances of other traders.  This is often referred to as ‘copy trading’ or ‘community trading’ but it essentially refers to a similar practice where traders are given access to the trading decisions of investors that might be more profitable or experienced.

What this really does for newer investors is that it enables them to remove large portions of the initial risk that might have been seen early in the trading career.  When we are able to join a community of traders that is like Covesting, we can maximize gains while we are minimizing losses.  Covesting is introducing the concept of peer-2-peer asset management to crypto currency markets, an approach that has a solid performance record in the classical markets such like forex and stock markets. Covesting’s innovative offerings will soon be available for investors and traders that are turning to crypto as a means for alternative investment strategy.

This is essentially the central task of any investor and so these are all instruments that should be considered by anyone that is looking to build a diversified asset portfolio.  The market is changing rapidly and with the development of cryptocurrencies we can see that the market is willing to create new assets anytime investors feel that this is necessary.  

The time has come for the cryptocurrency assets and with the success of instruments like Bitcoin and Litecoin, we can really see that the sky is the limit in terms of where values can rally.  It is looking as though the market wants a more customized experience, however, and the communal trading platforms like Covesting have what is required in order to make the copy trading practice much more commonplace in the world of finance.

Richard Cox

Richard Cox has a PHD in Macroeconomics and has taught the subject at the university level. He writes for several internet news outlets, including: CNBC, TheStreet.com, NASDAQ, and the Motley Fool.

Follow Richard on Twitter: @RCox_

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