Tuesday, March 6, 2018

If something is a tradable security, then it will eventually spawn derivatives as Bitrust seeks to introduce insurance the cryptocurrency market

While the term derivatives are seen by many as a dirty word in the realm of finance, in themselves they can be used as both a valuable hedge for one's portfolio, or on the flip side as a 'financial weapon of mass destruction' for corrupt financiers on Wall Street.


A derivative is simply a product based or 'derived' from something else... like insurance to protect your home in the advent of a fire or burglary.  And many of these products are no different in the financial markets as things like options allow you to protect your primary investment in case the price rises or falls.

However as mentioned above, there are some derivatives that have been created which not only act in nefarious ways to a primary asset or security, and in some cases like during the 2008 financial crisis, can bring down the entire financial system as the derivative market is multiples of times bigger than the very markets they are financialized from.

So with this being said, we are beginning to see derivatives enter into the cryptocurrency markets, with the first one being a tradable futures contract at the Chicago Mercantile Exchange (CME).  But now on March 6, a new derivative is being introduced called Bitrust, and its purpose is to provide insurance against the volatility that is a mainstay of the still emerging cryptocurrency markets.

A story of BITRUST started with a problem which gathered a team of blockchain enthusiasts to solve it — to have an affordable tool for hedging cryptocurrency trading transactions. And it is true, with the altcoins market volatility we have faced these few months it is obvious that everything is ready for such product to come about. In this blog we will tell in more detail about what BITRUST offers and why it is needed.   
The idea 
Altcoins are highly volatile — the total market cap hyped by 10,000% starting in 2013 and right up until its downturn this January. Moreover, how extremely complex it is to forecast these market fluctuations! And this is exactly why market was calling out for something like BITRUST — to solve the real issue of altcoin volatility for small and medium investors and cryptocurrency enthusiasts. 
“On one hand the market volatility is skyrocking, and on the other — the interest in cryptocurrencies and the value behind blockchain technology is really growing. More and more people talk about it every day. It means that already this year a lot of people will want to join the movement, learn more about the crypto world and also participate in its development. We are looking at the few year-long market adjustment and growth period ahead of us and we believe that BITRUST is the type of project which will heavily contribute into such adjustment,” says company’s CEO Alex Duhamel. 
Alex adds: “With BITRUST you don’t have to accept all the risk when trading altcoins. You can easily mitigate it, moreover — in a convenient fashion and at an affordable price.BTC News

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