Bitcoin Plunges After Bakkt's Poor Start
30 Sep 2019 #Bitcoin
The launch of Bakkt, the Bitcoin futures trading platform, was one of the most anticipated and discussed events of the current year. Although the subsidiary of the Intercontinental Exchange (ICE) has had the platform ready in 2018, the actual launch has been delayed numerous times due to certain technical issues, but mostly because of the good old bureaucratic turmoil.
Finally, on September 22, the efforts of the team behind Bakkt have come to fruition as the platform saw its first day of operation. However, the early hours of futures trading weren’t entirely consistent with everyone’s expectations since the total trading volume during the initial 24 hours amounted to a disappointing 18 bitcoins. As the saying goes, “The mountain had brought forth a mouse.”
The first hours were the quietest
The inception of the physical Bitcoin futures trading on the Bakkt platform took place this Monday at noon. The operations that occurred during the first hour involved only 5 BTC that had been dealt at a price of $10,115 per unit. At the closing time of the first trading session, the total of 28 futures contracts had traveled between the accounts while the price of Bitcoin has already begun going south, dropping to the levels below $10K, which served as a support line over the course of the previous few weeks.
It should be noted that these stats concern only monthly futures contracts while the trading activity involving daily contracts, which were thought to be Bakkt’s chief product, has been even more sluggish. According to the stats from the official ICE website, the very first such contract had been traded only 17 hours after the opening bell, when the Bitcoin price decreased to $9,975 per coin.
This unexpectedly slow start left many crypto experts wondering whether there has been any substance behind all the hype associated with the Bakkt launch, while the price of the first cryptocurrency continued its slide downhill faster than the Olympic bobsledder.
Blame it all on Bakkt
Many commentators justified such a poor start by the fact that Bakkt provides for the delivery of physical Bitcoin, which is capable of slowing down the initial scale-up process. Others said that it’s natural for the regulated futures to display sub-par adoption at the initial stages because not many brokers are prepared to clear the futures at that point. It also could have been a matter of the common traders’ mentality - in other words, many people simply decided to refrain from dealing with Bitcoin futures during the first days. They just sat on the sidelines watching and trying to figure out their next course of action.
Others, however, laid the blame for the plunge of Bitcoin price, which, by the way, was the biggest since January 18 and constituted a whopping 18%, on the tepid start of futures trading. Bakkt was meant to attract institutional money to the crypto market, which had been reluctant to enter that space due to the predominantly unclear and inharmonious regulation. Many experts concurred that the underwhelming launch of Bakkt had prompted the collapse of Bitcoin below the customary resistance of $9000, down to $7852 from which it is currently trying to make a recovery. Certainly, such a rough start doesn’t mean that Bakkt is doomed; it proves the notion that one must buy the rumor and sell the news.
