Running Bakkt platform was to become the event of the year, to raise quotes Bitcoin and revitalize the entire industry. That did not happen. Instead of the expected, we received, perhaps, the most high-profile disappointment of the year. Let's see what is the matter here and what to expect from the platform in the future.
Bakkt disappointed investors with low volumes
The reason everyone was waiting for the launch of Bakkt is because of the way it works. Deliverable futures for bitcoin involve the purchase of the asset itself, which should increase the liquidity of the asset, and together with it, increase its value. In theory, everything is fine, but in practice, Bakkt services were practically unclaimed.
The first days of the platform’s operation led the market into bewilderment and even depression: the total trading volume was only 71 bitcoins, or about $ 710,000. Given that the total daily trading volume of bitcoin is $ 16 billion at the moment, the volume on Bakkt amounted to only 0.0044375% of this amount.
For comparison: on the first day of trading bitcoin futures on CME, the volumes reached 5.298 BTC. Considering that the BTC rate at that time was approximately $ 13.500, the volume in dollar terms amounted to more than $ 71.5 million. As you can see, the difference is 100 times.
Based on this, an unpleasant, but very simple conclusion can be made: Bakkt was the disappointment of the year for the cryptocurrency industry, and we can feel the consequences very soon. Why did the site not attract investors and high volumes, as literally everyone expected it to be?
What to expect from Bakkt in the future?
The problem may lie precisely in high expectations. People looked at 2017 and saw how the launch of the first futures raised quotes to $ 20,000. Based on this, many thought: now the same thing is happening, and Bitcoin should again take off. But it’s not 2017 anymore, when the hype around Bitcoin was peak. Everyone was talking about cryptocurrency then, and many ran to buy BTC for fear of losing huge profits.
Now there is no hype in sight. Yes, some interest in cryptocurrencies fueled Libra , but the negative position of regulators around the world quickly cooled the fervor. Moreover, in 2017, the object of the hype was precisely Bitcoin, and not some third-party cryptocurrencies from Facebook, etc.
The result was as follows: Bakkt was launched at a time when only a few showed interest in BTC. The volumes obtained tell us that institutional investors have not come close to the platform, and retailers do not need it at all.
What will be next? Bakkt is undoubtedly the right tool for the market, but the site will have to wait a long time for demand for its services. Meanwhile, there is a very high risk of Bitcoin falling due to unjustified expectations, and the current correction can only be a light breath before a real storm. To more accurately understand the current demand for futures, you need to follow the platform for at least a month, and if the situation does not improve, we can expect a confident bear market.
Publication date 09/25/2019
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