With the ongoing volatility in the markets, the most heavily traded binary options on the Nadex exchange are, as always, on the S&P 500 and euro. The fastest-growing, however, is Nadex’s new Bitcoin binary, the first of its kind. This shouldn’t come as a surprise.

Bitcoin has gone from an obscure “cryptocurrency” that seemed to be mainly of interest to hackers and underworld types to a mainstream, accepted means of exchange. There is probably a Bitcoin ATM near you. Stockbrokers can see a Bitcoin ticker on their Bloomberg terminals now. You can use bitcoins to shop online at many of your favorite retailers. And what you buy actually shows up and everything.

Last week, a report in Wired proclaimed that 2016 will be the year that Bitcoin “goes big.” The digital currency has gone through its early growing pains, like the collapse of Mt. Gox, the world’s largest bitcoin exchange. It didn't help that one of the dark corners of the internet, Silk Road, an online eBay for illegal drugs, was shown to have relied on bitcoins to help traffickers and buyers avoid detection—until, of course, they were detected.

Exchanges run by mysterious recluses and highly sketchy criminal marketplace were not good for Bitcoin’s image as a new, secure, egalitarian, and manipulation-proof transnational currency. Regulators in various countries, especially the US, had a hard time seeing it as a real currency. It didn’t help that the developers of Bitcoin didn’t seem to want to be accepted by regulators anyway—they believe markets don’t need a government’s sanction or interference.

To begin with, Bitcoin was hard for many people to understand. It wasn’t printed by a government, but extracted by computer programs run by “miners” who sort of ran the programs night and day on multiple computers (filling their basements, running up huge air conditioning bills, straining their family relationships). The price shot up for no clear reason, then crashed, then fluctuated.

Nadex took notice once the price of bitcoins stabilized enough that a trusted international price index could be established, the Tera Bitcoin Price Index. It’s used by banks and major retailers and accurately reflects the price of Bitcoin worldwide. The Nadex Bitcoin binary option, like all binary options, is a derivative of the price movement: will the price of bitcoins be above this price at this time? Yes or no? You don’t have to own actual bitcoins or convert them to a currency. No “mining” required.

The use of bitcoins has hit a record high and more than doubled between 2014 and 2015. The more people are using bitcoins, not just speculating on their value, the more liquid and stable (not volatile) the market becomes. Bitcoin is starting to move much like any other market.

What are people using bitcoins to buy? Computers made by Dell, flights and hotels on Expedia, comforters and lamps on Overstock.com, flowers, even donations to the United Way. In other words, regular stuff.

Meanwhile, Nasdaq and other financial companies are investing in bitcoin startup Chain, to create digital currencies for use in trading stock and other securities. Others are using the blockchain computer technology that Bitcoin is based on to create their own virtual coins. The new Potcoin, for example, is to help cannabis businesses handle their transactions. We’ve traveled a long way, from the Silk Road to Main Street.

The instability in the markets is partly due to China’s devaluation of the yuan and the ripple effect on the dollar, euro, and the stocks and commodities that use those currencies to measure their value. Other Asian currencies are weakened by the one-two punch of the weak yuan and low commodity prices. And the South African rand is in serious trouble. With those old currencies in disarray, it makes sense that more people are looking at a new kind of money to solve some old problems.

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