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Bakkt BTC Futures’ low volumes could be down to stiff competition

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A rise in institutional investors has fueled a lot of speculation regarding Bitcoin’s price in 2019.

ICE’s Bakkt highlighted one of the most anticipated arrivals in the BTC Futures market as it was supposed to open the floodgates for accredited investors coming into Bitcoin.

However, according to skew’s recent data, Bakkt has zero Options trade for almost 10 days at the end of January.

Such underwhelming statistics suggest that the recent Bitcoin spike may have surfaced due to retail or individual investors and according to Longhash’s recent report, Wall Street may have been quiet for Bitcoin too.

Although Bakkt is not getting the response it was hoping for after its launch, CME’s cash-settled Futures contract is certainly on a high. However, the latest surge of over 30 percent was likely due to margin trading. The post read,

“Bitcoin’s recent rally was seemingly caused by a high level of activity across leading margin trading platforms. Meanwhile, platforms like Bakkt that target accredited investors have seen low levels of activity.”

The Open Interest on BitMEX was hovering above $1 billion as well, but the fact that such high volumes had accumulated in margin trading opened up the market to severe volatility.

Bakkt’s absence with respect to Bitcoin trading volumes implied that recognized institutional investors are still skeptical about Bitcoin.

The report also suggested that Bakkt’s inability to generate substantial trade volume could be down to stiff competition in the existing market.

All the major Options platforms currently have a better Open Interest than Bakkt, including the likes of Deribit, CME, OKEx, Deribit, all platforms that accounted for $472 million out of $554.6 million in Open Interest on 21 January, largely outperforming Bakkt.

After the CME launched its own Options contracts on 13 January, the Futures market is becoming more congested. The question of whether Bakkt will continue to facilitate Bitcoin Options for institutional investors is anyone’s guess at the moment.


Biraajmaan is a full-time journalist at AMBCrypto covering the US market. A graduate in Automobile engineering, he writes mainly about regulations and its impact with a focus on technological advancements in the crypto space.
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