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  • Bakkt Bitcoin Futures Volume Sets New All-Time High

    Bakkt Bitcoin Futures

    Bitcoin futures trading platform Bakkt set another all-time high for its physically settled Bitcoin (BTC) contracts yesterday.

    According to the Bakkt, 17,745 contracts changed hands – a 36% rise from the previous ATH set in July.

    After a slow start to life, Bakkt has really picked up this year and is regularly setting new all-time highs.

    However, the trading volume is still minuscule compared with the USD settled BTC futures volumes.

    Bakkt Bitcoin Futures

    What Is Bakkt?

    Bakkt is a regulated platform which offers Bitcoin trading, a custody solution, and a new Bakkt cash payments app, which lets users pay for products with Bitcoin.

    Bakkt is run by Nasdaq owners Intercontinental Exchange (ICE), and was launched in September 2019.

    It was touted as being the link between Bitcoin and the institutional investors wanting to join the Bitcoin space, and was the first platform to offer BTC futures settled in Bitcoin.

    This means that every BTC futures contract created is a BTC taken from the market, and although that is what it does, it’s fair to say Bakkt didn’t live up to expectations.

    It was slow going at first. There was little demand for physically settled Bitcoin futures, and many believe Bakkt’s poor performance led to a sell of as Bitcoin plummeted 35% within three months of Bakkt launch.

    Since the turn of the year, however, Bakkt has gone from strength to strength. Regularly surpassing its previous all-time high to yesterday’s new volume set at 17,745 contracts being created.

    That is almost 18,000 BTC taken off the market in just 24 hours. And although that’s an all-time high the US-based exchange is now taking at least hundreds of BTC off the market every single day.

    Why Doesn’t Bakkt’s Volume Impact The Bitcoin Price?

    Which way will the price go?

    Bakkt’s volume is progressing rapidly, but it must be said the volume has little effect on the BTC price.

    Firstly, BTC futures is buying and selling, and it’s not clear at first whether traders are long or short Bitcoin.

    And because Bakkt is a derivatives platform, people don’t use Bakkt to buy Bitcoin, but use it to bet on the price going up or down.

    Bakkt’s trading volume is way below that of the market leaders. Today, Binance leads the way in derivatives volume with almost $5 billion traded daily.

    Compare this with Bakkt’s almost $200m record and we can see that Bakkt has a long way to go.

    Bakkt Bitcoin Futures ATH

    Bakkt All-Time High Is Bullish

    We might not see the needle move much or at all with the Bakkt Bitcoin futures contracts, but the fact that institutional investor interest in Bitcoin is growing is wildly bullish.

    After a slow start, Nasdaq subsidiary Bakkt is now growing of some significance.

    No doubt the volume lags way behind that of the leading cryptocurrency exchanges, but we can see the apetite for physically settled BTC futures is there.

    Whether its Bakkt Bitcoin futures, or even the Bitcoin hashrate, any all-time high is bullish as it shows more interest and investment in Bitcoin.

    Added with the growing interest from institutions, we can expect not only Bakkt to grow, but the whole Bitcoin space, and who would bet against us reaching a new all-time high for the Bitcoin price by the end of the year? Not me.

    Author: Pablo Clarke


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