Could the inception of other bitcoin trading products add to liquidity or the general acceptance of bitcoin? Recently, the Commodity Trading Commission (CFTC) has designated that bitcoin is a commodity. By doing so, adding bitcoin derivatives is an attempt to regulate the bitcoin market.
Some find it strange that the CFTC has said that bitcoin , among other digital currencies, has the same properties as physical like gold or oil . It is true that there is a defined supply of bitcoin , but it is more than likely that the designation is more of an attempt to regulate than to legitimize bitcoin as a true commodity.
Furthermore, the addition of bitcoin derivatives could simply open up the bitcoin market to more traders. Because let's face it, on a day-to-day period, trading bitcoin can be a snooze-fest. With trading being as digital as bitcoin , less than five percent of are ever exercised for delivery which may lead to more bitcoin speculation.
One thing is certain: bitcoin could an alternative to traditional safe-haven assets. For the last year, I have been the only one, that I know of, that has noticed that bitcoin has been trading the inverse of the most traditional safe-haven - gold . Bitcoin's largest movements seem to stem from money flowing in and out of gold .
Unfortunately, in a crisis situation, I believe gold would win because it is tangible and that is physiologically comforting. If gold garners support from another led financial crisis, bitcoin could see dark days.
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