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With the much-anticipated Bakkt exchange now confirmed for release in September, it seems that traders are treating it like a ‘sell the news’ event.is currently trading at under the price point when the news was announced.
The cryptocurrency exchange backed by the Intercontinental Exchange (ICE), Bakkt, was supposed to be the most important news of the year. However, despite its announcement, this news seems to have had a marginal impact on the markets for now.
Recently, Bakkt was approved by the Commodity Futures Trading Commission (CFTC) and the New York State Department of Financial Services (NYSDFS). The exchange will offer live Futures contracts are literally agreements to buy or sell an asset on a future date and for a fixed price.... More trading with actual Bitcoin, a first in the United States. It will also offer other financial derivatives.
The Bakkt announcement immediately caused a Bitcoin price jump of $300, but the hype has since subsided. There are currently plenty of exchanges offering ‘futures contracts’ for Bitcoin, but Bakkt is the first which is ‘physically delivered.’ It is expected to bring in a slew of institutional investment. However, investors may also remember when futures trading first went live on CBOE and other major institutional exchanges in December 2017. It was then that Bitcoin began its legendary price decline which would continue throughout 2018.
As trader and crypto-analyst Jonny Moe (@JonnyMoeTrades) writes, Bakkt may prove to be a ‘sell the news’ event in the short-term.
— Jonny Moe (@JonnyMoeTrades) August 19, 2019
Bitcoin’s wedge on the daily has been much-talked-about, with analysts split whether Bitcoin will break upwards or downwards. Bakkt may prove to be a positive catalyst for Bitcoin in the long-term, but its effects could take close to a year to materialize properly.
Increasingly, it’s looking like ‘buy the rumor, sell the news’ is still the golden rule in the cryptocurrency market—even for Bakkt, the most important news story for Bitcoin all year.
Do you believe that Bitcoin is due for some short-term pain despite the Bakkt release? Let us know your thoughts below.
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