Digital Assets: A Legal Commodity?
A commodity market is a place where trading of the primary economic sector (raw materials) takes place rather than a manufactured product. At present there are 50 major commodity markets is present. It facilitates the investment of nearly 100 primary commodities.
Types of commodities
There are two types of commodities called hard commodities and soft commodities.
1) Hard commodities
Natural resources such as gold, oil, rubber, etc., which has to be extracted and mined come under the hard commodities
2) Soft commodities
Agricultural products such as wheat, soya bean, coffee, corn, fruit and livestock such as pork come under the soft commodities. Soft commodities depend upon the product grown
Technical and fundamental analysis
Analysis helps the traders to find out when the rice in the market will rise and they came to know the entry and exit of the market. Commodity traders utilize numerous techniques for buying and selling. In this article, we will discuss the technical and fundamental analysis.
- a) Fundamental analysis
It depends upon the two factors, such as supply and demand (current and future) in commodity trading. Sometimes the supply will be low but the price increases and in sometimes supply is too much but the commodity price fall. The fundamental analysis predicts the future price action. It depends upon the political and economic factors. So one has to gather knowledge about political and economic data.
- b) Technical analysis
Commodity traders focus on technical analysis for trading. Technical analysis uses the historical and current data about commodities. This technique is not a science, it utilizes the graphical chart. When the chart is developed, the pattern is analyzed. And measure the outcome in terms of probabilities. The purpose of technical analysis is to predict the future price of the commodity.
The way to make money around the globe is changing and also changes the economics of a country. Cryptocurrencies like bitcoin and ethereum pour limelight at present. Any economic resource with a positive value which is represented in binary form is called digital assets. For the trading purpose, one has to obtain the binary code for the commodity and use it for trading later. Ethereum is a unique smart contract based crypto commodity system. .Ethereum code software was developed by Marc Weston. The aim of this code is to make the product profitable and anyone can use. Digital assets such as bonds, stocks, ledgers, and commodities are a few examples which have been centralized under the central government.
Bitcoin and ethereum are the two most popular blockchain protocols. Bitcoin avails 1,500pecent returns and Ethereum offers a 10,000 percent return. This attracted many investors on the financial front. Classifying digital asset is a problem for the regulators. A critic is it deals with the black money and evades taxes – is it a scam. Numerous traders had satisfaction using this software and consider it as genuine and legit.