Derivative Trading in Bitcoin emerges

While Bitcoin exchane prices plunged from the dizzy levels of $1342 to around $576 within a week (presently at $830)  reacting to the decision of Baidu not to accept Bitcoins, an interesting development was the development of a derivatives market in Bitcoins. has now started a derivative trading platform to buy and sell futures in Bitcoins. The website is owned by a limited company by name Pixode registered in Ireland.

It is well known in the stock market circles that “Derivatives” is a high risk investment option which thrives on the expectations of investors on how the share prices move in the coming days. Now Bitcoin (BTC) itself is a virtual currency and in a way a derivative in itself. Now the predictious trading is a derivative of a derivative and obviously the risks in derivative trading of BTC is closer to gambling.

The bids can be placed in unts of i millibitcon (0.001 BTC or about Rs 50).  No fees is charged on deposits. A “Miners Fees”  would be charged on all withdrawals amounting to 0.0005 BTC (approximately Rs 25) per transaction. Transaction fees (brokerage) would also be charged on each transactions. (exact brokerage is not clear).

At present there is no indication about the depth of the BTC Futures market. However what this development indicates is that BTC eco system is evolving in several dimensions and this is likely to provide stronger roots for BTC to survive in the long run.


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About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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