Bitcoin has been looking forward to institutional interest ever since Bakkt and the Chicago Mercantil Exchange [CME] entered the derivatives market. Despite all the noise made by Bakkt before the launch, hardly any impact was visible on the BTC market upon the launch. Rather, the CME derivatives contract that was launched after Bakkt, saw restricted but more interest than Bakkt. Bakkt has failed to contribute majorly in the BTC derivatives market and it was most visible during mid-march’s fall, fueled with volatility.
Bakkt reported a greater aggregated daily volume before 13 March, and while volume surged on other exchanges, it decreased on Bakkt’s platform. According to data provider Skew, Bakkt’s BTC futures aggregated daily volume on 11 March was $16 million that increased to $18 million on 12 March, before diving to $12 million on 13 March. The volume has been minuscule compared to other major exchanges or its institutional counterpart, which was reporting a volume of $476 million on 13 March.
On the second-highest trading day for Bitcoin on 30 April, the derivatives trading volume totaled $39.1 billion. Due to fewer products and less volume, Bakkt did not contribute majorly to this value. However, May has brought back lost interest among the institutional investors on Bakkt, along with CME. On 7 May, Bakkt daily volume grew to $33 million, which was seen once after the fall on 30 April. The Open Interest on the platform was inching closer to its all-time high marked on 14 February at $19 million. The current OI on Bakkt stood at $13 million, much higher than even before the fall in March.
The rising institutional investors could be a result of the economic fears surrounding the traditional financial market and the possibility to hedge against the risk by investing in the largest cryptocurrency. With strong bullish sentiment in the market around the upcoming block reward halving has managed to get the interest of the investors rolling, but the implications of halving are still debated. If the price of Bitcoin reacts as positively as it has been reacting before halving, Bakkt may reach its peak volume of $1.7 billion, last seen in June 2019.