By Martin Tiller. Originally appeared on NASDAQ.

I know it isn’t logical, but when a trade goes your way initially and then falls back to even or a small loss it is more frustrating than when it just goes plain wrong from the start. There is something about missing the opportunity to make a quick profit that makes it so, and that feeling of missing out can cause you to make some illogical decisions.

When, a couple of weeks ago, I suggested buying Bitcoin against the U.S. Dollar (BTC/USD) at around $475 the market immediately made me look smart as, over the next few days, the BTC/USD rate jumped to around $520. As anybody who has ever traded anything will tell you, though, markets are fickle beasts and just as quickly as things can go your way, they can turn and go against you.

Sure enough, we are now back where we started. The question, then, is “what to do now?”

The obvious answer is “nothing”; nothing has changed regarding the long term drivers that made the trade viable in the first place and neither of the initial targets, $660 to the upside nor $390 to the downside, has been reached. The lack of follow through on that initial move up is somewhat worrying, but the formation of some pretty solid support at these levels suggests that upwards is still the path of least resistance.

The selling could be the result of profit taking or short selling, or it could just be the natural result of Bitcoin being spent as more and more merchants begin to accept it for payment. The first two would, by their nature short-lived and an increase in short interest in particular would strike me as more of a buy signal than a worry. The problem of the currency being spent and then exchanged, however, does represent a more fundamental problem that Bitcoin has.

Bitcoin’s early adopters and current users face an inherent dilemma. The very existence of an alternative, peer to peer currency represents a challenge to, and to some extent a rejection of, existing financial markets and instruments. The problem is that if the crypto-currency is to achieve the wider recognition and usage that most see as desirable it will need, at least initially, to be embraced to some extent by the very markets that it challenges. That process will almost inevitably result in some distortion of the market. Not all of that distortion, however, will be negative for Bitcoin’s value.

Yesterday ,The Wall Street Journal published a piece highlighting the possibility that there will soon be a Bitcoin ETF. The piece is concerned with pointing out the risks to potential investors, but within the generally dismissive tone is an important assumption; that the added interest that such an instrument would bring would be enormously supportive of the price. It may be anathema to some that Bitcoin will be the basis for the very kind of derivative that led them to seek an alternative to conventional markets, but that shouldn’t cloud the potential boost to the exchange rate.

The Bitcoin Investment Trust (BIT) already exists as a private fund for accredited investors and plans to go public by the end of this year. Meanwhile, the brothers Tyler and Cameron Winklevoss filed plans with the SEC for a Bitcoin ETF over a year ago, to be known as the Winklevoss Bitcoin Trust. The SEC typically takes around a year to rule on new funds, so a decision should be coming soon. That decision could go either way, but it is hard to find a logical reason for the SEC to reject both applications.

By the end of this year, then, it is likely that Bitcoin will have taken another step towards the mainstream of financial markets. That may not please some, but the prospect is enough to convince me that even though there has been some resistance on the most recent move up there is still plenty of upside to remaining long BTC/USD and keeping those initial trade parameters in place.