If you haven’t been paying attention, Bitcoin has grown quite a lot in the second half of 2017. Not just in price, but in popularity, interest and even demand. Bitcoin is also quietly gaining something far more valuable, something that has to be earned over time in the trenches of the real world thru hard-won battles and harder defeats.
The world is starting to pay attention one story at a time, one conversation at a time, as Bitcoin is gaining worldwide Respect as a medium of transaction and as a store of value.
As a show of that respect, Financiers are now able to trade and invest in Bitcoin derivatives.
On October 31, 2017, the CBOE announced a futures contract based on Bitcoin. It follows the recent move by the CFTC to begin regulation of LedgerX in facilitating Bitcoin derivatives.
The CME first resisted following suit, announcing that it was not going to follow the Bitcoin Derivatives trend. Just a few months later, they relented to “increasing client interest” and announced that they are in fact taking the Bitcoin Futures Plunge.
Now those three Financial Behemoths are in a race to be the biggest Bitcoin Futures Exchange, and it won’t take much marketing or sales effort for any of them to find interested money. There are billions of dollars sitting on the sidelines waiting to be put in the game. Allowing Financiers to participate in Bitcoin exposes Bitcoin to potential orders of magnitude of growth.
With the CFTC, the CBOE and the CME, Bitcoin is getting 3 personal introductions into the multi-trillion-dollar world of Institutional Investment, by 3 of the most respected, well-established players in the Game, all of which are vying for the attention of their new Honored Guest.
If things go well as most expect, this introduces Bitcoin to trillions of dollars which for years have been desperately seeking a better place to stay. They’re tired hanging out at the dark, depressing bar, getting drunk, whining about how the economy sucks with high unemployment, passing out, waking up feeling like shit, depressed, with no motivation to do anything but to start drinking again.
With record-low interest rates around the world for record lengths of time, environments where wealth can grow safely have been sorely lacking and sorely missed for far too long.
Trillions of dollars finally has an environment in which it can safely grow and expand. New jobs have just become available to the world’s stored wealth, which has been idle for far too many years, and is eager to get back to work.
Hedge Fund Research says that as of Jan 2017, there was just over $3 Trillion in Hedge Funds alone.
Derivatives open the way for even more wealth to get involved, in the form of Bitcoin ETFs.
Past ETF proposals have been denied, mainly because of the inherent volatility. The specific stand-out point used in the rejections is that there were no derivative instruments for Bitcoin, which are necessary to help stabilize Bitcoin’s price.
Now that Bitcoin derivatives are being successfully regulated and traded in the real-world market, there is a greater chance that a Bitcoin ETF will be approved, probably after a few months of catastrophe-free futures trading.
Financial regulators are under trillions of dollars of pressure to allow institutional money access to this new, exciting monetary enigma that is Bitcoin. The floodgates are beginning to open.
Recently, billionaire hedge fund legend Mike Novogratz said that he, “can hear the herd coming”, referring to institutional money getting into Bitcoin.
And Bitcoin can handle it.
Bitcoin is ready to absorb an unprecedented stampede of wealth into an investment vehicle that is still tiny with lots of room to grow. That’s not to say it won’t be without a few hiccups and hesitations, but with a $100 Billion market cap and 9 years of life in the real world, Bitcoin has proven that it is ready for the Big Leagues.
With the graceful, artistic execution of the soft fork into Segwit this past August, Bitcoin has seamlessly been transformed from being a deer path thru the mountains into a 10-lane superhighway with driverless cars and a high speed limit, operating accident-free, even when crowded.
With the acceptance of Bitcoin derivatives, Trace Mayer’s 6th of 7 Bitcoin Network Effects has begun. When Financiers get involved, the potential for big growth is at hand. The more Financiers start using Bitcoin Derivatives, the more powerful the Bitcoin System will become.