Security Tokens and how it works --- A brief overview of the crypto Space

Pexel

Tokens called security tokens are a type of digital assets or crypto that represents entitlement to a particular asset such as shares in a company or other forms of investments. They are called security tokens because the comply with Securities regulations are laws of which such are seen in stocks and bonds where regulations are made exclusively by financial institutions and government in general. Holders of this security tokens are provided with specific rights and their value in terms of these tokens are exclusively derived from the underlying real-world asset.

These security tokens leverage on blockchain to secure its transactions making it transparent and efficient to avoid scams or fraud of any kind. As a security token, they must adhere to laws by governmental Securities which ensures investors protection and transparency in transactions.

These security tokens work in marvelous ways. The token has to be converted from real-world assets into digital tokens on a blockchain and this is aided by the tokenization process. This tokenisation involves selecting a real-world assets and then value it using the market value which helps us know the total worth of the asset that would be represented by the digital tokens.

After this, the issuance of tokens is done by dividing the total value bog the asset into a certain number of tokens. After this issuance of tokens, there's regulatory requirements where the process must be validated or comply with governmental authorities or securities. This enables the token to be recognised legally as a security token and that those investing in it are protected.

After all said being done, the digital token is minted on a blockchain platform. Some Security tokens we know are Ethereum and polymath exclusively.

There are lots of benefits attached to using or investing in security tokens. Investors of these security tokens have fractional ownership and improved transparency and security through Blockchain technology is built.

The market is quite friendly and has shown a measure of increase these few days that's after bitcoin had drop from $42k to $39k as expected using the past movement of the market, last bull run by this month. This happened some days back almost exactly and from past market movements, we saw that bitcoin surged from $39k to a continuous upward and downward trend without any sharp decline. This movement was around 22nd of July and lasted till August.

There was no sharp decline or dump in the market until bitcoin rose from $39k back to $42k and above. This is what happened during the month of July, last bull run year. Same is applicable today and that's what has been guiding my trading decisions. I've grown my account using this trend from $5 to $47 in a week by taking in small profits daily.

The same movement happened some days back and is repeating history. Bitcoin bounced back from $63k to $67k after the drop from $66k to $63k. Following the trend, they'll be no sharp decline in the price of bitcoin or major dump except some negative news influx the market. So our next target using this trend would be a surge to $75k before it drops to $54k again around first week of August.

This is no financial advice. It's just one of my researches. If you choose to make your decision using this, you'll have to also study the charts to avoid substantial losses.

The movement of the price of Steem has been heavily seen the following year after the bitcoin halving year, that's after bitcoin has reached it all time high.. It's not as if it won't move with bitcoin. It will move but it's movement would be slow compared to next year which is 2025. This also is no financial advice. It's an observation. The market can change

All screenshots from my binance

Disclaimer :Any financial and crypto market information provided in this post was written for informational purposes only and does not constitute 100% investment advice. It's just basic knowledge every crypto trader or investor should have