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Bakkt’s First Week Trading Volumes Hit Just $5 Million USD

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Bakkt

Bakkt

Bakkt, the highly anticipated Bitcoin futures contract, recorded just $5 million USD in total trading during its first week.

The long-awaited Bitcoin futures platform from The Intercontinental Exchange (ICE) launched last week to considerably underwhelming fanfare given the hype surrounding the project since it was initially announced last year. According to ICE, which is also the parent company of the New York Stock Exchange, just 623 Bitcoin futures contracts were traded during the first week of Bakkt. Each of Bakkt’s futures contracts represents one Bitcoin, so just over $5 million was traded based on Bitcoin’s current value of $8,325 USD.

Compare this with the Chicago-based CME launch in 2017, the biggest rival to Bakkt, which traded over 4,000 Bitcoin futures on September 27 alone. This represents a trading volume of $165 million with CME contracts worth five Bitcoins. Bakkt’s daily futures contracts fared even worse than the monthly one, with fewer than six being traded during the first week.

Bakkt was touted as a gateway for institutional investors to get into Bitcoin, with many analysts believing it would help build trust towards crypto trading among legacy financial institutions. While it is still early days, it hasn’t exactly panned out as analysts expected. Guy Hirsch, managing director of eToro, has urged for patience with Bakkt:

“I see the hesitance as a ‘wait-and-see’ approach more than a reaction to the structure of the offering. Crypto is still a relatively new asset class and institutions are still learning about the benefits that it offers. These sorts of offerings can often take a long time to play out and gain market share. Expect institutions to cautiously watch each other and ensure that the market infrastructure is in place before making any commitments.”

>> Ripple Transfers XRP to New Trading Address: Bad News for Crypto?

Perhaps one reason for the lack of trading volume on Bakkt is Bitcoin’s stuttering price over the last week. Bitcoin’s price tanked more than 20% from $10,026 to below $8,000 in the first seven days of Bakkt’s launch. However, some analysts have argued that the declining price is a direct consequence of Bakkt, with JP Morgan saying, “It may be that the listing of physically settled futures contracts has contributed to recent price declines, rather than the low initial volumes.”

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Bakkt Futures Monthly Trading Volume Starts to Pick Up Pace

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Bakkt

Bakkt

Bakkt, the crypto exchange platform from the Intercontinental Exchange, has seen its futures trading volume soar to 1,061 contracts, indicating that institutional investors are finally getting on board with the platform.

Since its launch on September 27, Bakkt has endured a sluggish start to life despite being one of the most highly anticipated exchange in the world of crypto this year. With just 623 futures contracts being traded in the first week, for a total value of just over $5 million USD, it appeared as though the platform was a massive flop. Bakkt had been touted as an entry point for legacy financial institutions into crypto trading, given its close associations with legacy institutions like the New York Stock Exchange.

However, the monthly trading volume skyrocketed on Tuesday to $10 million USD, the second-largest figure recorded so far, falling 112 contracts short of the peak volume of 1,183. The last time Bakkt’s monthly futures volume spiked was on October 25, the day Bitcoin pumped over 18%. This week’s spike is slightly unusual in that Bitcoin has been trading in a narrow range of $9,169.84 and $9,474.89. Despite this, Bakkt’s advocates will be happy to see growing interest from institutional investors, which is bullish for Bitcoin.

Bakkt trading volumes and Bitcoin’s value are closely linked. The slow start to life for the platform came at the same time as a downward spiral in BTC value, crashing from above the $10,000 USD milestone to below $8,000 USD over the course of Bakkt’s first weekend following its launch. Some analysts blamed the exchange’s poor start for the downward spiral; however, the roles have since reversed, with BTC value now dominating volume on Bakkt.

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Bitcoin has been in bull territory lately, after making gains last week following the Chinese Government’s relaxed stance on crypto mining. However, those gains look unsustainable, according to some analysts, who believe it could fall to below $8,500 in the near term, which could spell bad news for Bakkt.

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Bakkt’s Plans for Its Options, Cash-Settled Futures Products

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Bakkt

Bakkt

Over the past few years, a wide range of new Bitcoin-related investment products have been brought to the crypto market, and the company at the forefront of this has been Bakkt. In a new development that could also have far-reaching implications for the crypto space, the company has now gone launched its Bitcoin options and futures contracts that are settled in cash. The products have already gone live, and it will be interesting to see the sort of interest they generate.

Highly Innovative

This is a significant development for all concerned since around three months ago, Bakkt had launched the highly innovative physically settled Bitcoin futures contracts. However, the company announced that the fresh product launches are the testing grounds for other products that it is going to introduce soon. In a blog post that it had published in relation to the launch, the company stated that the physically settled contracts could eventually work as the benchmark for the other products that it has planned.

However, the company’s ambitions with regard to its status in the crypto space are unlimited. It revealed that the Intercontinental Exchange wants its products to be on the same level of influence as the International Brent Crude futures—in other words, financial products that have the capability of moving markets.

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There must be a lot of quiet optimism among Bitcoin fans with regards to this development. In the aforementioned blog post, the company stated, “By starting with the physically delivered Bakkt Bitcoin (USD) Monthly Futures, we have a benchmark contract which provides the foundation for us to develop complementary products based on the needs of our customers.”

At the end of the day, the influence of the exchange will ultimately depend on the number of customers it can attract and the sort of liquidity that it offers to traders.

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Bitcoin Futures Platform Bakkt Begins Testing Today

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Bakkt

Bakkt

It’s been a long road for Bitcoin futures platform Bakkt. The platform—developed by NYSE parent company Intercontinental Exchange (NYSE:ICE)—has faced a myriad of launch delays due to regulatory approval. It’s still waiting now, but in the meantime, it has begun testing its Bitcoin futures contracts today.

Here’s what we know.

Bakkt is Testing Bitcoin Futures Contracts

The company announced in May that it would begin testing its contracts in July. It later settled on the date of July 22, which is today. The company has not disclosed what is involved in the testing process but, according to sources, it is testing two different types of contracts today: a daily contract and a monthly contract.

Bakkt will list them, trade them, and clear them through ICE Futures US and ICE Clear US.

Until ICE receives regulatory approval for Bakkt, it cannot take the platform live. But there’s no harm in preparing for an official launch in advance.

Launch Delays

It has been almost one year since Bakkt was unveiled. The platform aims to offer potentially the first physically-settled Bitcoin futures in the US, but as stated, has had to delay its launch multiple times.

The initial launch date was set for December 2018. That date was then pushed back to January 2019. Subsequently, ICE announced an “indefinite delay” as it continued to work with regulators to secure approval.

>> How Will the Crypto Markets Perform in Coming Years?

Cash-Settled vs. Physical-Settled

Bakkt will offer US traders “access to physically-settled bitcoin futures contracts.” These differ from the “cash-settled futures contracts” that Chicago-based exchanges CME and Cboe have offered since 2017.

The difference is in what a trader will receive when the contract expires. With cash-settled contracts, traders receive the cash equivalent to the contract’s value when it expires. However, with a physically-settled contract, traders receive the underlying commodity, which in this case is Bitcoin.

Will Bakkt have to wait much longer do you think? Will the test run tell us a lot more about an official launch? What are your thoughts?

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Bakkt is All Set to Introduce Bitcoin Futures in September

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Bakkt

Bakkt

Bakkt is all set to launch its much-awaited platform for Bitcoin futures.

When cryptocurrency first grabbed the attention of the global public, it was still looked upon as a novelty and something far too chaotic to be regulated by the relevant authorities. However, much has changed over the past couple of years as a range of fresh products have been launched, and perhaps the most important one is Bitcoin futures.

Everything is on Schedule

Earlier on this year, cryptocurrency firm Bakkt announced that it was all set to launch a fully regulated Bitcoin exchange in September. Moreover, the company also stated at the time that Bitcoin futures were going to be offered in the said exchange. It goes without saying that there is a lot of excitement around this platform, and recently, the company confirmed that it is on track for the launch.

The new platform that is going to be launched by Bakkt is aiming to make an investment in Bitcoin easier for most customers. However, it should be pointed out that the primary focus for Bakkt is to attract institutional investors to the platform and if it can do that, then that could prove to be a major breakthrough for the entire crypto space.

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In addition to that, the Bitcoin futures contracts that are going to be traded on the platform are going to be settled in Bitcoin. This particular feature makes it especially advantageous for institutions that might want to avoid any kind of volatility. Over the years it has been noticed that advanced platforms often failed to meet their deadlines when it came to launches.

However, Bakkt has managed to buck the trend and announced that it is going to launch its new platform on September 23 as planned. It is a platform that could have far-reaching consequence for the entire crypto space if it does manage to attract a considerable chunk of institutional investors.

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Is the Launch of Bakkt to Blame For Bitcoin’s Price Drop?

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Bakkt

Bakkt

Bitcoin’s price tanked almost 15% on Tuesday evening to a low of $8,165 in what was just the second day since the launch of Bakkt.

The Intercontinental Exchange (ICE) launched its long-awaited Bitcoin futures trading platform on Monday, September 23 to considerable fanfare, and the entire world of crypto is even more curious to see just how much an impact it will have on the market. Just two days after the platform’s launch and the immediate effect has seen Bitcoin, and several altcoins, drop significantly. It’s similar to the movement seen directly after the launch of the Chicago Mercantile Exchange’s (CME) Bitcoin futures in December 2017, which saw Bitcoin drop from $19,000 to below $17,000 in one day.

Bakkt’s first-day volume was just 71 BTC, compared to CME’s which was 5,298 BTC, although it is worth noting that CME’s launch came right at the peak of Bitcoin mania. Some analysts are speculating that the disappointing opening of Bakkt is a signal to the crypto world that institutional investors are not as keen to get involved in crypto to the same scale as originally thought. The decline in Bitcoin is most likely a sign that the price was too high, and due for a correction.

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Despite the dipping value of Bitcoin in recent days, many analysts are optimistic about how Bakkt can contribute to cryptocurrencies in their efforts to gain traction in the mainstream. Avivah Litan, vice-president of research firm Gartner, said, “Over time, this will legitimatize the cryptocurrency trading market which could potentially have a positive effect on [b]itcoin values, especially during a global economic slowdown and negative interest rate environment as investors and traders seek alternative instruments to equity and bonds.”

Litan concluded by highlighting that Bakkt is undoubtedly a positive step forward for gaining institutional trust and interest in Bitcoin, but it does translate to a guarantee of future success, for which only time will tell.

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Bakkt to Launch Consumer Focused App in 2020 With Starbucks Trial

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Bakkt

Bakkt

Bakkt, the cryptocurrency trading platform launched by the Intercontinental Exchange, is planning to launch a consumer-focused app in the first half of 2020 to enable retail customers to make transactions with cryptocurrencies.

Consumer Adoption Ambitions

In an ambitious move to enable the widespread adoption of cryptocurrencies, Bakkt Chief Product Officer Mike Blandina said in a blog post: “We’ll be launching a consumer app to make it easy for consumers to discover and unlock the value of digital assets, as well as ways in which they can transact or track them. Merchants gain access to a broader set of customers with expanded spending power.” Balinda added that the app may support more assets than just Bitcoin (BTC), currently the only supported coin on Bakkt’s platform.

The post gave no concrete launch date; however, the international coffee chain Starbucks will be the first retailer to trial the service. When ICE, the parent company of the New York Stock Exchange, first announced Bakkt last year, Starbucks was revealed as a retail partner in a deal that will see the coffee store receive a generous equity share, despite not making a cash investment in the crypto trading platform.

>> Bitcoin Suddenly Gains Momentum: Is This a Breakout?

Bakkt Recovering From Slow Start

The launch of Bakkt was one of the most eagerly anticipated events in the crypto sphere in 2019; however, trading volumes in the early days of the platform massively underwhelmed. Just 623 Bitcoin futures contracts were traded in the first week following the launch, accounting for about $5 million USD. Comparably, Bakkt’s closest rival, the CME, traded over 4,000 contracts on September 27, at a total value of $165 million CAD.

Bakkt has since picked up from its sluggish start and is on course to treble its all-time high for trade volume after hitting new records last week. According to data from the Bakkt Volume Bot on Twitter, October 26 saw 1,183 futures contracts traded, at a total value of $11 million USD.

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Bakkt is All Set to Launch Options on Bitcoin Futures in December

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Bitcoin futures

Bitcoin futures

Over the past few years, the crypto sphere has come a long way to emerge as one of the most exciting investment options for investors, and the introduction of Bitcoin futures was one of the bigger developments in this regard. In a new development, the highly influential International Exchange (IE) has stated that it is now going to introduce options in Bitcoin.

Key Details

The service is going to be launched on Bakkt, one of its subsidiaries, and among the most popular destinations for high-level trades in the crypto space. The announcement was made by Bakkt late Thursday, and it goes without saying that it has created buzz in the market.

In the announcement, Bakkt stated that this is the first time that regulated options are being provided on Bitcoin futures. It is a significant development for investors who are interested in the crypto space.

Moreover, it is also important to note that Bakkt also serves institutional customers and is well known for its merchant services. The availability of both futures and options will make it more palatable to professional traders.

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The Chief Executive Officer of Bakkt Kelly Loeffler wrote about the development in a post on Medium. She said, “The Bakkt Bitcoin Options contract will be based on the benchmark Bakkt Monthly Bitcoin Futures contract and represents another important step in developing this asset class for institutional investors, their customers, and investors.” One of the more important features of the whole project is that customers who buy these options will also be able to settle their positions in cash if they so wish. Considering the fact that the company launched its Bitcoin futures only a month ago, it must be said that it has been quick to introduce Bitcoin options, and the introduction of the new product will ensure that more traders participate in the platform in the months to come.

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Bakkt to Acquire Loyalty Program Provider Bridge2 Solutions

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Bakkt

Bakkt

Bakkt has announced that it will acquire loyalty program provider Bridge2 Solutions in a move that could open up a trillion-dollar market for the fledgling crypto exchange, according to the CEO of its parent company, the Intercontinental Exchange (ICE).

Bridge2 is a loyalty rewards platform for merchants and financial institutions with a combined total of $60 billion worth of reward points, according to Fortune. Bakkt intends to leverage Bridge2’s existing merchant relationships to build out its own consumer app. Bridge2 also operates a pilot project called Loyalty Pay, which, when integrated with Bakkt, will allow merchants to link payment processes directly to the Bakkt app, therefore removing a 2.5% interchange fee charged by banks.

Jeffrey Sprecher, CEO of Bakkt’s parent company ICE, said during its earnings call on Thursday, “the next big hurdle for the company will be getting that app into consumer hands and we will be looking at consumer adoption more than revenue or expense. Fortunately, that company is not a big drain on us … we have a lot of financial flexibility now from the company given it has a revenue stream both from trading and from operation of all these rewards programs.”

Bakkt intends to launch the app in the first half of 2020.

The announcement comes as Bakkt prepares to enter the second phase of growth, one that is aimed at expanding consumer adoption, following a hugely underwhelming first few months of operation. Last week, it was reported that the exchange saw exactly zero Bitcoin options traded; prior to that, the last activity reported was on January 17 when 20 options changed hands.

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Bakkt’s physically settled futures contracts, which were launched in December, were also met with underwhelming volumes in the early days—a fact that was immediately unfavorably compared with the fiat-settled BTC futures on closest rival the Chicago Mercantile Exchange (CME), which first went to market in December 2017.

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Bakkt Announces Bitcoin Futures Launch Date in July

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Bakkt

Bakkt

As Bitcoin (BTC) holds resistance above $8,100 USD, more positive news has arrived to help its case. Intercontinental Exchange’s (ICE) cryptocurrency platform, Bakkt, is to begin testing its first product: physically-delivered Bitcoin futures.

The date for launch is just over one month from now, July 22nd.

Bakkt Announces First Project Launch

In a blog posted earlier today, Bakkt chief operating officer Adam White wrote:

“On July 22, two days after Apollo 11’s 50th anniversary, Bakkt will initiate user acceptance testing for its bitcoin futures listed and traded at ICE Futures U.S. and cleared at ICE Clear US.”

He furthered:

“This is no small step. This launch will usher in a new standard for accessing crypto markets. Compared to other markets, institutional participation in crypto remains constrained due to limitations like market infrastructure and regulatory certainty.”

Bakkt’s Bitcoin futures offering has seen multiple delays due to regulatory compliance. It was first announced in August 2018, and investors have been eagerly awaiting its arrival since.

In addition to announcing the date, ICE provided new details regarding Bakkt’s monthly contract, as well as specifications for its daily contract.

The key details are as follows:

  • Each contract will contain one Bitcoin. And both monthly and daily contracts will see a minimum price fluctuation of $2.50 per Bitcoin.
  • Trades may be executed at $0.01 per Bitcoin and can list for as long as 12 months for monthly contracts or 70 consecutive days for daily contracts.

Final contract settlements for both contracts will occur at the Bakkt Warehouse.

Bakkt Versus Others

As stated, ICE first announced that it would be launching physically-settled Bitcoin futures contracts in August 2018.

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Bakkt’s futures differ from other futures out there. For example, CME Group offers cash-settled contracts as does CBOE. However, Bakkt customers receive an actual Bitcoin on the contract’s expiration and not the fiat equivalent to Bitcoin’s price.

Business in Bitcoin futures has been busy; CME Group showed record high volume in May.

However, the original Bitcoin futures provider, CBOE, will cease offering contracts once its final contracts settle this month.

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