Bakkt began Bitcoin [BTC] futures trading on 23rd September 2019. The opening was rather dull, as it traded less than 7 Bitcoins in the first two hours. However, it began to pick up the pace by the EOD.
71 Bitcoin Contracts were traded on day one via Bakkt by the EOD. Moreover, one daily futures contract was also purchased, which closed at $9795. Analysts cited two important reasons why even the slow start is a massive win for crypto on-ramp.
First 8-Lane Highway
Bakkt contracts are regulated, insured, and are settled in Bitcoin. Hence, the ecosystem can work independently without intervention from the dollar or banks. Mati Greenspan, the Senior Market Analyst at eToro, told the media,
“If a regular exchange is the on and off-ramps to bitcoin, this is an eight-lane superhighway. You certainly aren’t going to judge how good the highway is based on how much traffic it has on opening day.”
Bitcoin price is at the edge of a bullish trend continuation or the beginning of a bearish reversal. Most traders would avoid taking either long or short positions. Jacob Canfields, a leading chart analyst, tweeted,
If @Bakkt is for institutional traders, do you think they’d just enter randomly mid-range without any sort of a proper set-up? After all, this *is* supposed to he smart money.
Retail Investors to be Included as Well
The COO of Bakkt Adam White explained in an interview yesterday on how Bakkt will provide an on-ramp for retail investors as well. As reported earlier, Bakkt is working with retail giant Starbucks to offer Bitcoin payments. However, the design of the trading platform has kept retail investors away from it.
However, White told the media yesterday that retail investors can find a way through brokerage firms. He said,
“Bakkt is really designed for the institutional trader. So this is a futures contract. That said, we expect this futures contract to trade through retail brokerages as well, so retail customers can trade this contract.”
Brokerage firms will provide a back door entry to retail investors on Bakkt.
Furthermore, while Bakkt took all the attention of trading volume, the trading volume on native exchanges was healthy as ever. While CME traded $100 million in BTC contracts on the 23rd, BitMEX “quietly traded 270,000 BTC ($2.7 billion) in the past 24 hours.” Gabor Gurbacs of VanEck tweeted,
Don’t underestimate crypto native platforms. In some respects, they are ahead of the game. Liquidity is king!
Do you think liquidity will run to Bakkt and newer platforms as well? Please share your views with us.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com