Since launching in September, all eyes have been on Bakkt and its physically-settled Bitcoin futures contracts to see if the institutional uptake would be as significant as expected. There may have been a little too much hype, but recent spikes above $10 million in daily trading volume could mean that Bakkt is finally breaking into its stride.
Towards the end of October, Bitcoin futures contract volume hit its all-time high of $10.3 million, more than doubling its previous all-time-high of $4.8 million. On Tuesday, the $10 million mark was once again breached with the past ten days showing markedly better performances than the opening weeks of the future’s platform.
Daily summary of Tuesday's Bakkt Bitcoin Monthly Futures:
📈 Traded contracts: 1061 (+96%)
📅 Day before: 541
🚀 All time high: 1183
— Bakkt Volume Bot (@BakktBot) November 6, 2019
What has been notable, now that some time has passed and patterns are developing, is that the futures contracts are reasonably reactive to the price of Bitcoin. The first time Bakkt crossed the $10 million volume mark was when Bitcoin was pushing back towards $10,000 on Oct 25.
Bakkt Gets a Boost
Perhaps it was due to the hype over the launch of the Bakkt futures trading platform, which was intended to be the door opening for institutional investors wanting to get their hands on Bitcoin, but the performance early on was dour.
From its launch to October 23, the volume never managed to cross over $2 million in one day, in fact, at its lowest, there was trading of only $200,000. Not many were willing to guess as to why the performance of the platform was not meeting the hype generated before its launch, but more level heads called for patience.
What has now become apparent, in hindsight, is that the futures contracts were not generating much steam while at the same time Bitcoin’s price was trading fairly flat, at just over $8,000. A dip in price preceded a jump towards $10,000, and suddenly, contract volume boomed.
Tuesday’s spike above $10 million in volume was equated to 1061 contracts being traded, just 122 short of the record held by Bakkt.
These types of upticks spell good news for not only Bakkt and its platform, but for the adoption of Bitcoin by institutional investors.
The boom in Bitcoin’s price and the subsequent boost for blockchain emanating out of China appears to have put the cryptocurrency industry back on the map for investors. However, the key now for such an institutional-focused platform is whether or not it can maintain an upward trajectory through the volatility of Bitcoin’s price going forward.
Images courtesy of Twitter, Shutterstock.
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