As noted earlier, with equities now a barren wasteland of volume (and liquidity), the last remaining HFT master (of whale order frontrunning) has been forced to go to those asset classes where organic flow is still abundant such as FX, courtesy of central banks engaged in global currency wars. However, HFTs realize it is only a matter of time before FX order flow also dries up as central banks take their trade away from public venues (and dark pools) and as such are always looking for new, untapped markets. One place where they are about to land according to the WSJ, with hilarious consequences sure to follow, will be the one place that HFTs should have felt at home from the very beginning: bitcoin.

As WSJ reports, some of the U.S.’s biggest proprietary HFT traders say they see potential for big profits in trading bitcoin. Translation: unprecedented volatility, which essentially crushed all interest in Bitcoin after its peak in late 2013, is about to come back with a vengeances as such conventional HFT market rigging techniques as frontrunning, momentum ignition, quote stuffing, spoofing, subpennying and everything else in the vacuum tube arsenal is about to be unleashed on the world's geekiest traders. Call it algos trading algos.

Amusingly, the WSJ says that "their involvement could help reduce volatility in the market for bitcoin, which has struggled to gain legitimacy in part because of concerns about wild swings in its price." Uhm, no: the arrival of HFT in any asset class merely assures that volatility surges to the moon, especially when it is an asset that trades without explicit central bank backing such as stocks, or FX.

Among the companies at the forefront of this move is DRW Holdings LLC, a high-frequency trading firm in Chicago founded by former options-pit trader Donald Wilson in 1992. DRW is a founding investor in a new bitcoin financial-services firm called Digital Asset Holdings that launched last month. Cumberland Mining & Materials LLC, a DRW subsidiary, has “begun to experiment with cryptocurrency trading,” DRW said. Other firms with large proprietary trading groups also appear to have an appetite for greater exposure to bitcoin.

Hilariously, none other than the Fed's own right hand trading firm, Citadel, is also entering the space:

Citadel Securities LLC in Chicago and KCG Holdings Inc. in Jersey City, N.J., were among a small group of firms that have offered bids to buy shares of the Bitcoin Investment Trust since it listed last month on the OTC Markets, a platform typically used for trading shares of smaller companies that aren’t as heavily regulated as stocks listed on exchanges. KCG spokeswoman Sophie Sohn said that in addition to the engagement with the trust, her firm is “actively exploring various opportunities related to” bitcoin. Citadel said it was not involved in Bitcoin apart from the bids offered for the trust, a spokesman said.

And here comes the strawman which has been beaten to death, yet which the HFT lobby still uses on a daily basis under the assumption it deals only and exclusively with idiots.

One persistent problem for the bitcoin market is it can be hard to trade because there aren’t enough buyers and sellers at exchanges. Executives at those exchanges have sought to persuade high-frequency trading firms to begin making markets in bitcoin, trading-firm executives said. In market making, a trading firm offers both bids and offers for an asset so that investors always have a willing party with which to trade. The trading firm tries to capture the spread between the bids and offers, buying at a slightly cheaper price and selling at a slightly higher price. Ari Rubenstein, co-founder of Global Trading Systems Inc. in New York, said his team is looking at how to trade bitcoin but is waiting for regulators to give a signal that they approve of it. “No one has an idea if bitcoin is going to take off and be unbelievable, but everyone agrees it has that potential,” he said. “But we are still weighing the risks of getting involved.”

With traditional markets already so broken, today's epic opening stock ramp - the biggest of 2015, on the worst jobs number since 2013 - being the best example, one just can't wait for the untapped hilarious opportunities that will unveil themselves when robots and computer algos start frontrunning, pardon, providing liquidity in a digital currency. Truly a match made in Skynet heaven.

Finally, since HFTs have already traded BTC in the past, and haven't been shy about it, here is an example of what bitcoin afficionados everywhere can expect.