Bank of England watches closely this fx market.

 

File: bitcoin BOE – qb14q3digitalcurrenciesbitcoin2

It’s not a currency. If it would, a street vendor would accept bitcoin in exchange of a hot dog or a cigar. It’s more like a commodity. It resembles much more to a futures contract on coffee which would expire months from now.

Questions:

1) What’s the transaction cost? How much does it cost to sell and buy a criptocurrency spot position?

2) Could we arbitrage volatility with other markets like VIX, SPY or even de Quetzal?