https://www.opalesque.com/668671/Cryptocurrency_derivatives_may_calm_volatile_coin_prices867.html Roy Niederhoffer, President of R.G. Niederhoffer, said at the roundtable that he thinks crypto derivatives will not only calm volatility in currency pricing but help to institutionalize the crypto space. "Derivatives, despite what I think the general public believes, reduce volatility in securities. We have seen this happen with the development of S&P futures as a most obvious example," he said. "Going forward I expect that we'll see a great options market develop. We'll see a yield curve develop and probably over time many other things to do with Bitcoin." Niederhoffer adds that current volatility in Bitcoin is approximately 4-5% per day, which is about where the stock market was ten years ago. "As derivatives mature, its vol. is going to drop. I think we will see more stability eventually and then it's going to be off to the races because institutions will need to have this inflation proof asset," he said.
Niederhoffer adds that current volatility in Bitcoin is approximately 4-5% per day, which is about where the stock market was ten years ago Uh, because it was the financial crisis of 2008? Not sure if that's a good comparison for his purposes.
Actually this hasn't happened yet. BTC was just as volatile AFTER the introduction of futures as before. The current cooling off of volatility is due to the string effect finishing after the big run up and blow off. As currently as 7 weeks ago BTC went from 7K to 8K in a day. That is pretty volatile in my book...
Well, there were seasonal tax implications for BTC investors, and the futures contract(s) are not physically fungible (which would have literally been the Holy Grail). Jeez, for a time I was modeling basis just in case someone introduced a fungible futures contract.
As well as that mistake. He also says the development of the S&P futures had a calming effect, but a few years after they were first developed the crash of 1987 happened.