Bitcoin Futures: A Libertarian Takeover – Freedom Philosophy


Libertarian Takeover Month is upon us. CME Group made the game-changing announcement that they will be offering futures on Bitcoin before the end of the year.

Shortly after the announcement, Bitcoin surged to its highest price levels so far and has soared throughout the month of November – we await the month of December!

Cryptocurrency advocates were historically silenced with our cry to migrate our financial system because of the untenable nature of placing a national currency in the hands of something so volatile. The fluctuations of Bitcoin are impossible to ignore, the risk was too great.

The futures have the impact of allowing investors to hedge their positions (buy insurance) against the volatility or even invest in the volatility. The largest setback for Bitcoin has been the risk one takes, the capacity to mitigate risk has attracted investors to the cryptocurrency and the increased demand has caused a major price jump.

CME isn’t the first to market, but they are the first major institution to market, and the excitement has properly ensued.

The concern, up until this point, is the concept of a bubble – the tulip criticism.

In spite of the decentralization of currency, in spite of the emancipation from government oversight, regulation, and determination of our economy, some libertarians remain skeptical.

Their preference is for gold.

This is noble enough, throughout the millennia gold seems to return to its state of value. A Roman would likely be as excited as I am to find gold coins (unless they’re Stoic). The price of gold is predicated on gold, which is historically valuable. Compared with the price of Bitcoin, which, my colleagues argue, is predicated upon allegedly nothing.

Technically, their argument is that Bitcoin is predicated upon nothing except the use of electricity.

This is the same criticism that’s levied against the current financial system, dollars, euros, yen, etc., are predicated upon nothing. It is with this exception, dollars are actually predicated on debt – a promise to pay from the central bank; whereas Bitcoin is actually predicated upon the blockchain technology.

With respect to the concept of a bubble, the price of gold appears to be correlated with national interest rates. When rates are low, the demand for gold is high and subsequently, prices are high.

When rates are high, the demand for gold is lower and subsequently, prices are low. Given that interest rates are only just now beginning their much-needed rise, the price of gold appears to be in a deflating bubble.

Conversely, the impact that blockchain technology will have on our society cannot be properly accounted for in terms of its valuation.

Its capacity is to replace the current financial sector, which is valued at $13 trillion, while cryptocurrency is currently only valued at $328 billion.

If cryptocurrency is the future of finances, it appears to be highly undervalued.

Bitcoin selling at $10 thousand could undergo a 39x increase; prices well into the hundreds of thousands are a real possibility (though not in the near future, central banks and our governments will fight this long before a migration takes place).

Perhaps the most exciting possibility for libertarians is that gold itself, through Bitgold, is combining the two currencies.

There are endless possibilities. I know not whether or not the final currency will be Bitcoin, Litecoin, or some other contender. However, in terms of the cry for liberty, these are undoubtedly exciting times for libertarians. Futures making a migration possible put us at the forefront of a financial revolution.

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Brandon Kirby

Brandon Kirby has a philosophy degree with the University of New Brunswick. He works for a Cayman Island hedge fund service firm, owns a real estate company, and has been in the financial industry since 2004. He is the director of Being Libertarian - Canada. He is a member of the People’s Party of Canada and the Libertarian Party of Canada.