Knowledge is power
But regardless of the tempting volatility, no sophisticated traders will jump into bitcoin without arming themselves with knowledge. It takes a time and breadth of disciplines to understand bitcoin and its many intricacies – as well as a little bit of faith. To that end, the "education" phase is well underway, in fact the CFTC (Commodities Futures Trading Commission) launched an online information portal days prior to the bitcoin futures launch. Its aim is to educate the public on digital commodities. This period of research and analysis will have many positive externalities ranging from more effective regulation to greater capital allocation efficiency within the crypto economy. So far, investing within the bitcoin ecosystem has largely been haphazard. Almost every single bitcoin company has underperformed against bitcoin itself. A greater understanding of bitcoin will foster an ecosystem that allocates capital with greater efficacy, creating the value feedback loop more prevalent in cryptocurrencies such as ethereum. Every healthy futures market needs a mixture of speculators and hedgers that hold the underlying assets. Typically for markets run by CME, this may be farmers looking to lock in the price of their harvests by short selling contracts of wheat, corn, etc. Today, the bitcoin futures market is mostly comprised of speculators, and there is a lack of natural sellers as most traders would have to naked short (short without holding bitcoin). At Interactive Brokers, precautions are so great you need five times the collateral to make a trade. For a contract of $100,000, a trader would need $500,000 as margin.