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Paragon Investments' Futures File: Bitcoin, Cattle & Fed Chair Pick

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Bitcoin Futures on the Way

The Chicago Mercantile Exchange made a surprise announcement this week that it would begin listing a contract on bitcoin futures, giving more credibility to the cryptocurrency. Bitcoin, which is not controlled by any singular government, has seen increasing interest as an alternative to paper currencies or precious metals. Some of its appeal lies in its lack of control by governments, which also allows owners to use it with less oversight than traditional payment methods.

Many in the investing world have dismissed the currency as a fad or speculative bubble, but the adoption by the CME gives the currency more legitimacy, which helped send bitcoin to an all-time high over $7,000 on Thursday.

The total amount of bitcoin in circulation is controlled and currently is worth over $100 billion, although its price has been volatile in the past, which could make the futures contracts especially attractive to some investors.

Cattle Corralled Higher

After a wild week of massive price moves, cattle finished Friday sharply higher. December live cattle futures neared $1.28 per pound this week, the highest level since mid-June.

Prices are surging as investors flood into the market, which is forcing beef buyers to pay up for cattle.

Beef is also being supported by expensive pork prices as lean hog futures reached a three-month high this week.

Despite the big rally, market watchers are warning that the underlying demand for beef may not keep pace with the cattle prices, which could force a quick turnaround soon.

New Fed Chair Makes Markets Happy

President Trump nominated a new Chairman of the Federal Reserve on Thursday, replacing Janet Yellen with Jerome Powell.

After weeks of worrying about President Trumps pick, Powell was seen by markets as a conservative choice. He is expected to maintain the Feds current trajectory of raising interest rates in a cautious manner, rather than a more aggressive stance preferred by some Republicans.

Slower interest rate increases would be seen favorably by stock markets, which reached new all-time high levels again this week.

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About the author

With a degree in Grain Science / Management from Kansas State University, Mr. Haverkamp has worked directly with and for several corporations in research, logistics, and origination of commodity products. Among these are Continental Grain, Kansas Wheat Commission, National Livestock Association, Kice Industries, and Land 'O Lakes. Mr. Haverkamp is a regular guest analyst on both radio and television programs throughout the Midwest and also provides fundamental and technical research for Bloomberg, DTN, Dow Jones, The Wall St. Journal, CNN and CNBC as well as several other local and regional news syndicates. Mr. Haverkamp sat on the board of directors for the NIBA (National Introducing Brokers Association) in Chicago for five years and on the National Futures Association's nominating committee for one year. Mr. Haverkamp began trading in 1987 and founded Paragon Investments in 1996. 

  Mr. Haverkamp continues to provide consulting services for individual investors, livestock operations, grain processors, and individual producers as well as holding the title of CEO for Paragon.

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