Janis is a cryptocurrency enthusiast and a bitcoin adherent. He has a background in video production, but for the past couple of years, he is a full-time crypto researcher and writer. He has a good understanding of multiple cryptocurrencies and loves to cover daily news. He considers himself a semi-bitcoin maximalist but always is open to any kind of new ideas that could be put on the blockchain. In his free time, he likes skateboarding and cars.
Bakkt Physical Bitcoin Futures platform just recently hit a new record while Bitcoin price exploded.
Recently Bakkt announced that they had set a new daily record. They traded 1,183 contracts, respectively. One contract equals one Bitcoin, which means that the total volume was around $11 million. Also, this aligned with the recent Bitcoin price surge of 40%. This set people running back to the exchanges to grab a piece of the pie.
Also, China news was a big factor in the recent surge in volume and Bitcoin price. China recently announced that they officially will embrace blockchain technology. They have lessons about Bitcoin and Ethereum on their “Get to know China Better” app.
The statistics are interesting as Bakkt’s Twitter Volume Bot, on Wednesday, October 24, reported that they have reached a new all-time high of 640 traded contracts only 85 days after the launch of the platform. Back at the time, it was the second all-time high record in a row.
ICYMI: Wednesday's Bakkt Bitcoin Monthly Futures:— Bakkt Volume Bot (@BakktBot) October 24, 2019
💸 Traded contracts: 640 (+653%) (New ATH 🚀)
📈 Day before: 85
🚀 All time high: 640
*bleep blop* tip sats: https://t.co/TF6sNUwWpO 🤖 pic.twitter.com/cUG9qzf47E
When Bakkt launched in September, on the first day it saw a volume of just 71 BTC, which was around $700,000 at that time. Experts started to draw criticism towards Bakkt as the industry had long before speculated on how the launch of Bakkt will affect the Bitcoin price. However, now we see that Bakkt is experiencing steady growth.
At the time of writing, Bakkt daily Bitcoin futures trading volume is 281 BTC which is around $2,7 million.
Also, Bakkt is soon set to launch their Bitcoin options contracts in December. That way Bakkt is looking to capitalize on Bitcoin markets and will bring more to the industry. It will be the first regulated Bitcoin options contract. It has already received the approval from the U.S. Commodity Futures Trading Commission. While customers will have the option to choose the medium of settlement, Bakkt’s options contracts will be based on the Bakkt’s Futures contracts.
Lack of Interest from Institutional Investors
Experts point out that because of the fact that Bakkt is offering physically settled contracts, this keeps the current institutional investors away from it. While at the same time, they are starting to embrace it even more and more.
As economist and trader Alex Kruger points out, traditionally these type of contracts are not very popular among institutional investors. In the traditional markets, 98% of contracts are not settled physically.
In finance, 98% of futures are not physically settled as traders do not want to take delivery, even for physically settled contracts.— Alex Krüger (@krugermacro) September 24, 2019
=> comparing Bakkt with the CME is perfectly fine, particularly so with Bakkt's monthly contract.
Another interesting fact is that when Bitcoin posts a heavy volume, exchanges tend to follow. When Bitcoin lost nearly $1,000 a day, Bakkt reported an all-time high of 640 contracts. Now, when Bitcoin soars $2,500 a day, Bakkt also posts a new all-time high of 1,183 contracts.