As if timed for the momentous occasion of bitcoin topping $10,000, news broke Wednesday that Wall Street eminences Cantor Fitzgerald and Nasdaq Inc. will soon follow the lead of their Chicago peers CME and CBOE and offer bitcoin futures trading on their exchanges. Though not terribly surprising, the development represents the next logical step in the progression of cryptocurrencies from an unspeakable heresy to Wall Street plaything.
The problem is, we’re only, like, a quarter of the way there. At best. Look at what CME is doing: cash-settled futures. No transactions will be added to bitcoin’s public ledger, no cryptographic hash algorithms solved. Instead it’ll just be a reference rate floating somewhere a safe distance away from naturally occurring bitcoins in the wild. Futures traders won’t get true exposure to the asset, just wagers on a number that get tallied and settled at the end of the day.
Boring. Enough patting yourselves on the back with this bitcoin futures stuff, guys. It’s a necessary part of the process, sure, but it’s not really truly bitcoin. Bitcoin is placing an order and waiting 9 days for it to go through because bitcoin’s infrastructure is so fundamentally unsuited to its purpose. Bitcoin is lying awake at night wondering if the exchange holding your money will be the next to go up in smoke. Bitcoin is faith.
So who’s it gonna be? Which major bank will be the first to say damn the consequences, we’re going to make a market in this bonkers speculative bubble because that’s what the client wants and we’ll be damned if that’s not what the client is going to get?
Bankers have their obligatory objections, and they’re understandable. Bitcoin currently occupies a regulatory Twilight Zone. It’s catnip to hackers. It’s doesn’t really represent that much money. It’s plumbing consists of an invisible archipelago of private and at-times illicit operators in far-flung jurisdictions of questionable stability. Its very existence is a fuck-you to bankers. Etc.
It shouldn’t be hard to wave these all away. Who cares about the crypto-anarchist rhetoric; there’s money to be made....MUCH MOREEarlier:
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