The Future of Trading Is in Crypto
There’s no denying that central entities are potentially corruptible. Just this year alone, the Commodity Futures Trading Commission (CFTC) issued a fine to JPMorgan Chase & Co of $65 million dollars for market manipulation. JPMorgan Chase & Co, the largest American bank, did not dispute the claims of intentionally manipulating exchange rates in a $300 trillion dollar swap market.
Market Manipulation by Central Entities
In over five years, the CFTC found that JPMC had been making false reports in an attempt to manipulate the U.S Dollar International Swaps and Derivative Association Fix which is a global benchmark reference of interest rate products.
JPMC is not the only one, around the same time, Citibank also settled a total fine of $100 million in 42 states after being prosecuted by the Office of the Attorney General in the US for manipulating a “benchmark interest rate that helps set lending rates across the world.”
Goldman Sachs has also fallen victim to the same behavior and was accused of manipulating the ISDAFix and paid a fine $120 million for misconduct.
Can Crypto Come to the Rescue?
It is such levels of financial market manipulation that led to the birth of Bitcoin back in 2009. The vision of Satoshi Nakamoto’s Bitcoin white paper was set on introducing a decentralized peer to peer payment system that is free from the control of third party financial institutions that are capable of manipulating the market to their own selfish interest.
Time and time again, the big banks have proven their loyalty to themselves before the interests of their own customers. For this reason, speculation and general interest in cryptocurrencies like Bitcoin have mostly been driven by enthusiasts who believe that crypto has a huge role to play in the future of finance and trading.
Trading Industry: Why the Big Banks Are Focused on Exploiting It
There’s a good reason the big banks are making huge returns by manipulating international exchange rates. One of the main reasons for increased manipulation of the international financial market is because of the growth and success of Futures trading.
What is futures trading? Well, at its core, futures trading is nothing more than setting up trades based on foreseen events in the future . Its origins date back as early as the 1840s when the Chicago Board of Trade (CBOT) officially launched future trading contracts to “help farmers and ranchers remove some of the price risks from their grain crops and livestock operations.”
In an effort to reduce interest rate risks, corporations also started adopting futures contracts in the 1970s and since then, the futures market has been with an increased number of participants all over the world to become a major industry today.
In fact, according to the Futures Industry Association (FIA), the estimated value of all exchanges that traded futures and options contracts was set at about $33.6 trillion in 2017. As you can see, futures trading is a trillion-dollar industry that is estimated to grow even bigger in the future.
Futures Trading on the Blockchain
Throughout the 1970s and the 1980s, futures trading evolved from its humble background in the agricultural industry to several industries such as energy, and the stock index. Eventually, its arrival into the cryptocurrency world coincided with the meteoric rise in the price of Bitcoin at the end of 2017.
With the introduction of Bitcoin Futures trading on December 11, 2017, popularity increased even further as the Chicago Mercantile Exchange (which also introduced its own Bitcoin Futures Contract) reported a 93 percent increase in daily volume in the second quarter of 2018.
However, one of the reasons that has led to a relatively slower growth of futures trading in the crypto world compared to the traditional financial world is the fact that there is still a steep learning curve and that the industry is still novel to the crypto community.
Apart from crypto futures trading being complex, and having high transactional fees, most of the existing options (Bitmex and CME included) still have a centralized approach that goes against what Blockchain stands for.
Digitex Futures Allows Simple Trading Commission-Free
As we have seen, centralized entities often leave loopholes for possible market manipulation. However, Decentralized Exchanges (DEX) offer users more control since the user is not required to disclose any form of personally identifiable information.
But let’s face it, we are still a long way from the mainstream use of DEX platforms and the only people using DEXs platforms are a select few of Blockchain savvy enthusiasts. This is where hybrid exchanges are gaining ground.
One exchange that stands out from the rest is Digitex Futures. This is a hybrid exchange that combines the reliability and speed you would find in a centralized exchange with the security and freedom of decentralized account balances.
For the first time ever, crypto traders will be able to trade futures contracts with instant on chain settlements and without the long delays that are common with fully decentralized exchanges.
Digitex, therefore, will provide a balance between sophistication and intuitiveness with a straightforward approach that is set to attract both novices and experts into the futures trading industry.
Digitex is one of the few companies that actually offers an intuitive platform with non-custodial account balances not to mention zero-fees! How is Digitex able to sustain itself with zero fees? Well, the company has its own token (DGTX) that is minted to cover operational costs based on a community vote every couple of years.
With such Hybrid platforms that combine the convenience of decentralization with the speed and reliability of centralization, mainstream usability of futures trading in the crypto world could be just around the corner.
Even though the crypto industry is currently in a bear market, there is a growing popularity of futures trading as more and more people realize how significant the market will be.
I think this explanation is a bit too facile. Perhaps explain a little better. Also, the events are not “foreseen” as you can’t predict the future; more like possible eventualities.
where should this link to? It says invalid