Researching in Quora about the introduction of bitcoin future in Nasdaq, I found one of the most interesting and cautious answers from a expert stockbroker.
At the end of the answer, I think that it is said that we must take all the precautions and that it can be a good future, but that can also be a chaotic future. The theme here is the emotionality of the investments and how you can fall in a highly volatile market.
What I always say is in volatile markets is “the trick is not invest or not in volatile markets, is how to surf this volatile wave.”
Will Bitcoin crash once the CME group introduces Bitcoin futures?
Bitcoin futures which will be listed first on the CME and the CBOE and other listings to follow, will allow easy access to a new group of traders who already hold futures accounts. It will provide a new vehicle to short Bitcoin that wasn’t easily available before and a new set of players to play.
Bitcoin provides a fascinating trading vehicle because there are very few fundamentals. It is based on mass beliefs. This means that it will move emotionally. I have made most of my money as a professional floor trader on emotionally based market activity. This asset is ALL emotionally based and I expect some great trading opportunities.
What makes this even more exciting is that there are people who believe Bitcoin is worth “zero” and those who are “true believers.”
The answer to your questions is “WE CAN’T KNOW.” Since Bitcoin is “belief based” and emotionally based beliefs can shift in a second, predictions can’t be made.
Even my neighbors are talking about Bitcoin…exciting times to be part of a new product that has the power to shift our view of currencies world wide or the potential to collapse like tulip mania. The winners will be those who can play the emotions in the market, both long and short.
I am starting a research group of experienced traders on trading Bitcoin futures because I DO NOT have the answers to most of the questions, but DO know this is going to be crazy with very risky opportunities.
I wrote a blog on how my history of trading and developing new futures products may give us a glimpse of potential outcomes. You can read it
Rich Friesen, former Board of Directors, Pacific Stock Exchange at Pacific Stock Exchange (1986-1987)