Bitcoin futures launched yesterday and I think by any measure it was a success.  The trading volume was decent and there were no technical issues.  There were a couple temporary halts, but those were due to rapid price rises not system issues.  The futures ended the day up 20%.  For those out there who still aren’t aware of the meteoric rise of Bitcoin, yes I said day and 20% in the same sentence.  This past month has been truly insane in the crypto currency landscape.

  Bitcoin in 2017     –     up 1645% year to date

Now it’s still not an open market because shorting Bitcoin futures is still very restricted and many brokers won’t allow it.  I don’t believe true price discovery can take place until you can short something easily and in volume so we’ll have to wait for things to develop further to really know where everything stands, but at least after day 1 Bitcoin has not only survived but prospered.  Of course it’s always possible that it disappears as fast as it came, but in my humble opinion I think it’s here to stay for a while.

I’m not going to dive very deep into the Bitcoin discussion just yet because full disclosure I am far from an expert on the subject.  I really only want to make one point to all those people who have asked me where I stand on the issue.

Bitcoin is not a currency, it’s a speculative asset

That’s not to say that it won’t one day become more of a usable currency, perhaps it will, but as of right now it’s displaying more speculative asset characteristics than anything else.

If people know that going in and have no misunderstanding as to what it is, then go for it and I wish you the best of luck.  Personally I’m a very analytical person and I just can’t invest in things that I can’t clearly quantify.  At this early stage, I have no idea what Bitcoin is worth and have no model or predictive edge on where it’s going.

I would just be guessing, and that’s something that I never bet money on.  The last time I was in Las Vegas I spent 6 days there and probably played casino games for less than 1 hour total.  The last time I was in Macau I didn’t even go in the casino.  Gambling is just not in my nature.  If I don’t have a statistical edge, I don’t play the game.  The only reason I used to gamble when playing golf was because I’m the one in control of my shots.

So full disclosure I’ve never owned Bitcoin, and while I never say never, there is a decent chance that I won’t in the future either.  I will very likely get into some Bitcoin futures trading  and I’ll certainly share with the community if there’s something of note.  Bottom line though I’m probably not the right person to get Bitcoin advice from at this stage.  I really do like to stay in my lane and focus on my areas of expertise.

I follow it daily with interest though and will no doubt comment from time to time.  It’s one of the most fascinating financial developments in our lifetime and I’m absolutely all in with curiosity as to where this ends up.

Is it modern day tulip mania, or is Bitcoin changing the world?


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