All eyes were closely watching to see how much utilization Bakkt’s physically settled Bitcoin futures platform was met with during its launch yesterday evening, but much to the chagrin of investors who believed that it would open with massive utilization stemming from institutional investors who are interested in crypto, its Bitcoin trading volume was and still is quite low.
Regardless of its slow launch, analysts are noting that it is still an imperative development for the aggregated crypto markets, as it provides much needed legitimacy for BTC while also offering big investors a safe and easy way to foray into the markets.
Bakkt Launch Met With Low Bitcoin Trading Volume
The crypto community was met with a mixture of surprise and disappointment when Bakkt’s launch yesterday evening was met with only a handful of Bitcoins-worth of trading volume.
Although this trading volume has climbed in the time since, it is still relatively small when compared to most major cryptocurrency exchanges, but it is important to note that the long-term importance of the introduction of physically settled futures still remains intact.
Luke Martin, a popular cryptocurrency analyst on Twitter, spoke about this in a recent tweet, pointing to three primary factors that he believes make Bakkt’s launch significant.
“Bakkt =/= a Binance IEO. Bakkt allow for a few things, but none require piling in on launch. •More robust $BTC borrowing/lending markets to form •Legitimize the asset •Ease manipulation concerns (oracle risk, basis risk) •Potentially disrupt some of OTC market functions,” he noted.
Bakkt =/= a Binance IEO.
Bakkt allow for a few things, but none require piling in on launch.
•More robust borrowing/lending markets to form
•Legitimize the asset
•Ease manipulation concerns (oracle risk, basis risk)
•Potentially disrupt some of OTC market functions— Luke Martin (@VentureCoinist)
Although the platform’s short-term impact on the markets has been negligible, its long-term impact is likely to prove to be quite significant.
Will Bakkt’s Volume Gauge Institutional Interest in the Markets?
Because Bakkt’s platform has been tailored for large retail and institutional investors, analysts and investors alike can use its trading volume to decisively gauge institutional interest in Bitcoin.
Importantly, as 2020 nears and more institutions begin foraying into the nascent markets, the availability of Bakkt will likely encourage more brokers and big investors to enter the markets.
Joseph Young, an analyst and popular figure within the crypto industry, spoke about the importance of Bakkt in spite of its presently low utilization, explaining that it will likely see increased trading volume as brokers get ready to enter the crypto markets.
“Bakkt isn’t showing a whole lot of bitcoin volume on its first day of trading, no fireworks as many expected. But, Bakkt actually launching before the year’s end sets a good precedent entering 2020. As brokers get ready, it will likely see more volume,” he explained.
Bakkt isn't showing a whole lot of bitcoin volume on its first day of trading, no fireworks as many expected.
But, Bakkt actually launching before the year's end sets a good precedent entering 2020. As brokers get ready, it will likely see more volume.
— Joseph Young (@iamjosephyoung)
As 2019 drags on and the markets continue to further develop, watching to see how much trading volume Bakkt garners will likely elucidate just how interested institutions truly are in Bitcoin and the crypto markets.
Featured image from Shutterstock.