A little while ago, the Bitcoin community was both shocked and motivated by the announcement of the New York Stock Exchange investing in Bitcoin exchange Coinbase. This move was seen by many as a “vote of confidence” from the higher-ups in the financial sector to Bitcoin enthusiasts worldwide. Just a few hours, another major story was announced, which once again shook the foundations of the current financial ecosystem.
Ever since people started realizing Bitcoin is a valuable commodity, there have been trading platforms. Over the course of more recent years, these platforms have evolved, added new features and also branched out to the trading of derivatives. A new derivative-trading platform for Bitcoin is coming, which will be created by former Goldman Sachs, BNP Paribas, Morgan Stanley and Société Générale bankers.
Not the names you would expect to build a trading platform for Bitcoin users, but this does give Bitcoin another “vote of confidence” from the financial world. This brokerage platform-to-be will specialize in futures and options which are tied to the Bitcoin price. Furthermore, both businesses and investors will be able to hedge their digital currency portfolio.
It should come as no surprise that most people are still attracted to Bitcoin because of its price volatility, as that is where the most money is to be made in both the short and long term. None of these former bankers care about the technology behind Bitcoin, or what can be done to further integrate the blockchain into everyday society. All they want to do is make even more money.
And there is nothing wrong with that, as we are all in it for personal gain in one way or another. Most of us want to see a financial gain, while others want to gain a “status” in the Bitcoin world because of their achievements. But a new derivative-trading platform for Bitcoin may attract a new crowd to our beloved digital currency, even if it is for the wrong reason.
However, not every aspect about this platform is as black and white as I am portraying. Because businesses can hedge their digital currency platform, it may convince more merchants to hold [a portion of] each Bitcoin transaction in Bitcoin value, instead of immediately converting it to their local fiat currency. Assuming at least some merchants can be swayed to do so, it would be another notch in Bitcoin’s belt.
One could even go as far as stating that derivative trading for Bitcoin will influence the bitcoin price volatility in a positive manner – reduce it drastically. Should this be the case, we may see more and more merchants and investors flocking to the Bitcoin space, which will push adoption and awareness to new levels, and create a new virtuous cycle in its own right.
Regardless of whether you think this new platform will be good or bad for Bitcoin, the fact remains that these former bankers are showing a great interest in this disruptive digital currency. And what Bitcoin really needs most right now – next to properly educating people about it – is some good press and positive media coverage.
Source : http://www.cnbc.com/id/102456187
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