Cointelegraph asked a range of foreign exchange (forex) marketplaces how they thought the market in the future would cater to people’s desires to trade Bitcoin, and how it would respond to sudden changes and hidden challenges.
The exchanges responded with quiet optimism. While they were not set up to trade cryptocurrency, they incorporated Bitcoin-related options into their fiat-based services. They said that, even though the market for Bitcoin is still small, the momentum behind its continued usage means it cannot be ignored. Mark Kaye, Business Development Officer at Forex-Metal, said:
“We hope that as cryptos become more popular among the general public, so does the general knowledge about bitcoin margin trading increase among wide groups of investors, and that over time this will lead to a more active market then it is now.”
The need for popularity is difficult to appreciate from taking a look online. The Bitcoin-to-fiat exchange market has exploded over the last two years, and there is now an infinite number of options that range from world class, to run-of-the-mill, to illegitimate, creating an entire ecosystem in itself.
For traditional traders, however, Bitcoin’s entry has been remarkably slow, and the currency remains a niche curiosity, compared to the roughly US$4.5 trillion in fiat that is exchanged every day.
Yet we are already seeing trends. Bitcoin price rallies — smaller now than they once were, but no less powerful, given the more stable price overall — unsurprisingly inspire more investors to experiment with cryptocurrency. Kaye said:
“The rise of the bitcoin price and all the hype around it has ignited public interest, and we wanted to be part of it. To offer our services to people who want to trade in bitcoin as an instrument.”
The sentiment was echoed by Yoni Assia, founder and CEO of social investment network eToro. “The demand for bitcoin is correlated with the price,” Assia said. “The next rise of bitcoin will bring a lot of traders in.”
Similarly, only a small number of fiat institutions have made steps to include Bitcoin in some capacity in their operations. In addition to Forex-Metal and eToro, trading platform Beast Options and Estonian exchange Forex.ee have responded to the challenge and entered the market early.
Beast Options’ Adam Leonard recalls the pitfalls of entering the then-unknown Bitcoin market since first becoming interested in cryptocurrency in 2011.
“It was a whole new demographic to market to,” he explained. “So we did it — poorly, to be honest. We didn’t know what we’re getting ourselves into, we were advertising on Blockchain.info and the amount of volume that came in was enormous. The amount of fraud that came with it as well was enormous.”
Bitcoin has been something of a curiosity for users so far, but Leonard sees its potential for growth, and is planning to step up marketing efforts.
“I’d say [demand is] decreasing but that’s because we haven’t been marketing to crypto users, which we plan to start doing now,” he said. “For us, it’s marketing with free bitcoin as a deposit method or extra trading money if you deposit with BTC. But,” he continued:
“If you look outside our market, I don’t think anyone is properly marketing it in the digital currency industry.”
Differences of opinion abound on the subject of how to handle Bitcoin to achieve the best results. Despite the ups and downs associated with the nascent technology, early adopters remain pragmatic and even optimistic. Forex.ee CEO Vlad Karpeev explained:
“Publishing informative materials would outline the benefits and big prospects of this currency. ... It doesn’t matter if you are a student or a member of a corporation’s board. It is just a new way to make money, so why would you neglect this opportunity?!”